Ten31 Timestamp 778,258
Following several weeks of escalating regulatory pressures on the “crypto” industry discussed in recent issues of the Timestamp, the space got a bit of a breather this week, with the only notable update on this front coming in the form of a court’s ruling that the popular NBA Top Shot NFTs may constitute securities. Meanwhile, the Federal Reserve, FDIC, and OCC issued a joint statement reiterating that financial institutions are “neither prohibited nor discouraged” from providing services to “crypto” clients or customers from any specific industry, prompting some relief among industry participants; however, it remains to be seen how much this update really means given similar language was used in a statement made by the same group in January this year shortly before the recent increase in regulatory scrutiny.
Elsewhere, higher than expected personal consumption expenditure (PCE) inflation data spooked markets, as the Fed pivot watch continues to be the only trade in town for traditional finance. While we continue to believe that the US’s fiscal reality dictates monetary policy will have to ease one way or another at some point, we remain more focused on the impressive resilience of the bitcoin network, which once again dynamically and organically adjusted to transaction demand to clear an 80+ block, multi-week backlog without any central coordination or board of governors.
Selected Portfolio News
StatMuse released its latest monthly newsletter, highlighting the platform’s first month with more than 40 million searches and a variety of other impressive updates:
River Financial’s lightning nodes surpassed 1.5 million cumulative transactions routed:
Media
Bitcoin Magazine released the fourth episode of Freedom Money with Matt Odell, featuring a discussion with Abubakar Nur Khalil of Recursive Capital and Qala.
Unchained Capital CEO Joe Kelly made an appearance on the Texas Blockcast to discuss Unchained’s history and vision.
Unchained published a piece discussing considerations around using a living trust for bitcoin inheritance.
Ten31 portfolio companies Hodl Hodl and Peach were featured in a Bitcoin Magazine roundup of the best P2P exchanges.
Market Updates
The bitcoin network saw an upward difficulty adjustment of nearly 10% this weekend. Meanwhile, demand for new inscriptions has started to decline notably since the peak of the frenzy several weeks ago.
The personal consumption expenditure (PCE) price index ticked up 0.6% M/M and 4.7% Y/Y in January (+0.6% and +5.4% including food and energy), above consensus expectations.
Markets sold off on the headline as Cleveland Fed President Loretta Mester said the data suggested the Fed would need to “do a little more” with rate policy.
Goldman Sachs projected the Fed will likely hike rates another 75bps over the next several months and does not anticipate any rate cuts during 2023.
The 10-year Treasury yield continued to climb higher, reaching its highest level since the start of 2023. Seven-year notes priced at a 4.06% yield at this month’s auction, up 55bps from January and the highest figure on record for that maturity.
Iraq’s central bank announced on Wednesday that it planned to allow trade with China to be settled in yuan for the first time; however, whether this arrangement applies to trade in oil is unclear.
Regulatory Update
In the wake of growing fear about regulators de-banking and otherwise handicapping “crypto” companies, the Federal Reserve, FDIC, and OCC issued a joint statement reiterating that banking organizations are “neither prohibited nor discouraged” from serving customers in any particular industry. This language echoes a statement made by the same group at the start of 2023.
SEC Chairman Gary Gensler once again reiterated sentiments he’s expressed several times previously, noting that “everything other than bitcoin” in crypto looks like a security.
House Majority Whip Tom Emmer introduced a bill called the CBDC Anti-Surveillance State Act, which seeks to prohibit the Fed from issuing CBDCs directly or to use CBDCs as instruments of monetary policy.
A New York court ruled that Dapper Labs’ NBA Top-Shot NFTs may qualify as securities.
The SEC and New York regulators objected to Binance.US’s $1 billion offer to purchase assets of bankrupt “crypto” lender Voyager Digital, as the terms of the deal may require violations of US securities law.
A US District Court denied the Federal Reserve’s motion to dismiss a case brought by bitcoin-focused Custodia Bank regarding the Fed’s denial of a master account to Custodia.
Noteworthy
Cloud mining platform BitFufu launched a marketplace for Antminer discount coupons issued by Bitmain.
Bitcoin Core maintainer Marco Falke announced his decision to step away from the role, leaving four individuals with official duties as maintainers.
Nostr participation continued to grow impressively, as pubkeys producing content surpassed 2.5 million.
Paxful CEO Ray Youssef published a piece on Nigerians’ need for bitcoin amid a months-long shortage of physical cash.
BlueWallet announced it would sunset its custodial LNDHub lightning node on April 30th and encouraged users to migrate to other wallets or a self-custodied BlueWallet setup.
CashApp users bought over $7 billion of bitcoin on the app in 2022.
Travel
Austin Ten31 Tribe event, March 16
Austin BitDevs, March 16
Austin Bitcoin Takeover, March 17
Bitcoin 2023, May 18-20
Nashville Ten31 Tribe event, June 14
Nashville Lightning Summit, July 13-14