Ten31 Timestamp 740,232

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Jun 10, 2022

The Oslo Freedom Forum (OFF) took place on May 23-25th. Several members of the Ten31 team attended and took in a wide array of talks and presentations from activists, dissidents, and former political prisoners from authoritarian regimes around the world, including China, Syria, Belarus, and Russia. While not focused on bitcoin specifically, the event underscored the pivotal role bitcoin can play in supporting people and groups fighting for basic liberties in countries where they would otherwise have very limited or nonexistent funding options due to sanctions, financial repression, or state censorship.

Sergej Kotliar, CEO of Bitrefill, noted after the event that the real value of the Forum for bitcoiners wasn’t showing bitcoin to the OFF, but showing the OFF to bitcoiners. As a testament to this idea, Jack Mallers announced a $100,000 donation to the Human Rights Foundation (the parent of the OFF) in support of continued development of BTCPay Server, which will help to further empower activists in the many countries struggling under authoritarianism.

Another program focused on promoting the global reach of bitcoin, Mi Primer Bitcoin, will be hosting a graduation ceremony in San Salvador on June 25th for its first class of students receiving their Bitcoin Diplomas, which certify the students’ fluency in the use of the Bitcoin network. Ten31 portfolio company IBEX Mercado, a co-sponsor of the event, is offering to pay almost all expenses for members of the Ten31 Tribe to attend the ceremony. Space is limited, so please get in touch with Grant or Jonathan soon if you’d like to join.

Fund II New Investments

Cathedra Bitcoin (TSX-V:CBIT), a publicly traded bitcoin mining company with a differentiated off-grid mining strategy, raised C$6,450,000 via a non-brokered investment, with Ten31 acting as one of two participants. The company will use the proceeds to expand the rollout of its mobile rovers that can easily move between energy sources to seek out and leverage the cheapest power. Cathedra has 231 PH/s deployed across the US today and expects to reach 725 PH/s by year-end.

Selected Portfolio News

Cathedra Bitcoin announced 1Q22 earnings and provided an update on mining operations. The company generated $3.1mm in revenue (as compared to $0.7mm in the prior-year period) and ended the quarter with 187 PH/s deployed (a figure that had increased to 231 PH/s as of June 6). Cathedra announced it had sold 235 of its bitcoin to help fund repayment of outstanding equipment loans, and the company will now operate unencumbered by debt obligations through what could be a prolonged downturn for bitcoin miners.

Media

Rabbit Hole Recap: Jack Mallers joined Matt and Marty on May 27 to recap the Oslo Freedom Forum.

Closing the Loop: Alex Leishman, CEO of River Financial, joined John Vallis on the Closing the Loop podcast to discuss River and the growth of bitcoin-native financial services.

Market Happenings

Luna Foundation sold 80,000 bitcoin as part of its failed attempt to defend the UST peg. As of mid-May, the foundation’s remaining bitcoin reserves were approaching zero.

El Salvador hosted a delegation of central bankers and financial authorities from 44 countries to discuss financial inclusion and the country’s bitcoin law. The group included central bankers from 32 countries and financial officials from 12 more.

The Russian finance ministry noted the country is considering using digital currencies for international settlement.

Treasury Secretary Janet Yellen concedes inflation will not be transitory. Secretary Yellen pins the error on “unanticipated and large shocks” to the economy.

Regulatory Update

Senators Lummis and Gillibrand introduce a bill with new proposals for regulatory and tax treatment of bitcoin and other digital assets. Key provisions of the bill include the elimination of capital gains reporting for gains <$200 and the designation of the CTFC as regulatory authority for any digital assets deemed to be commodities.

New York state legislators pass a bill to institute a moratorium on proof of work mining not powered by “renewable” energy. The measure, which still needs to be signed by Governor Kathy Hochul, would enact a two-year moratorium and make New York the first state in the US to impose such a ban.

The Biden administration is expected to propose new policy recommendations around mining energy consumption. This would be one of the first such studies to result from the President’s Executive Order in March regarding the “responsible development” of digital assets in the US.

German Federal Ministry of Finance issues a nationwide crypto tax guide. Among other updates, this guidance would allow individuals to sell bitcoin (or ether) tax-free after a one-year holding period.

Noteworthy

Texas Pacific Land Corp announces a new bitcoin mining venture in partnership with JAI Energy and Mawson Infrastructure. The partnership will develop and operate up to 60 megawatts / 2.0 EH of bitcoin mining capacity across multiple sites in TPL’s portfolio.

Block publishes survey data on bitcoin’s perception around the world. The report suggests people around the world are considerably more familiar with bitcoin than any other cryptocurrency and that lack of knowledge is the primary governor on adoption.

FRED posts an article evaluating the price of eggs in bitcoin. Questionable arguments aside, the post is notable as it inaugurates a new FRED dataset in which bitcoin is used as a unit of account.

Cambridge releases its latest update on global mining distribution; some analysts argue the data are flawed.

Coinbase updates language in 10Q to more fully reflect that customers would be unsecured creditors in a bankruptcy.