Ten31 Timestamp 779,525
Various latent impacts of last year’s “crypto” meltdown continued to bubble to the surface this week. Most notably, Silvergate Bank, one of the only institutional-grade banking partners to the digital asset industry and an outsized casualty of November’s FTX collapse, made waves in the market with a going-concern warning related to the fallout from industry volatility and the burden of growing regulatory activity. At the same time, the volume of regulatory headlines remained fairly robust, as SEC representatives made new comments about Binance.US’s trading of unregistered securities, and three senators sent an open letter to Binance accusing the exchange of illegal activity and demanding more disclosure.
This week also saw multiple updates on the CBDC front. The South Dakota state legislature passed a bill that appears to help prepare the legal groundwork for CBDC acceptance as part of interstate commerce, and similar bills are under consideration in over 20 states. Meanwhile, the US Treasury Department detailed steps it’s taking to further investigate the process for implementation of a central bank digital currency. The ongoing fallout from capital misallocation to “crypto,” accelerating regulatory ire resulting from that fallout, and the gradual but steady push toward centralized financial surveillance continue to point to the importance of the sound bitcoin-exclusive infrastructure Ten31 is investing in.
Selected Portfolio News
Coinkite announced a strategic partnership with popular mobile wallet Nunchuk:
Coinkite also released a new firmware for the Coldcard Mk4:
Swan launched its IRA product:
Mempool.space made improvements to the way “effective fee rates” are displayed for CPFP transactions:
Bitcoin Magazine released the fifth episode of Freedom Money with Matt Odell, featuring a discussion with Jewher Ilham, an advocate for the Uyghur community in China.
Grant Gilliam and John Arnold published an essay evaluating the implications of the growth of generative AI and its likely synergies with bitcoin.
Coinnkite co-founder and CEO NVK joined a ReasonTV discussion on the future of Nostr.
Cathedra executives Rete Browning and Isaac Fithian joined TFTC for a deep dive into the engineering behind bitcoin mining.
Matt Odell made an appearance on the Canadian Bitcoiners Podcast.
Unchained Capital’s Cam Stromme recorded a discussion at this year’s NAPE Summit.
Unchained also released a video discussing key considerations for bitcoin inheritance planning.
Start9 CEO Matt Hill joined the Pleb Underground show to discuss Nostr, the Embassy Pro, and more.
The US 10 year Treasury yield broke 4% for the first time this year as rates across the government bond complex continued a sharp reversal of early-year declines.
Silvergate Bank’s stock declined over 57% on Thursday after the bank delayed its 10K filing and warned that recent crypto volatility and regulatory scrutiny leave it at risk of being “less than well capitalized.”
Following the announcement, Coinbase, Circle, Galaxy Digital, and other firms in the “crypto” ecosystem cut ties with Silvergate.
Over the weekend, Silvergate discontinued its SEN Network for 24/7 settlement between institutions.
Meanwhile, popular exchange Kraken reduced the scope of its relationship with Signature Bank and will no longer allow deposits or withdrawals associated with Signature as of March 30.
On the macro front, the Case-Shiller Home Price Index continued to roll over in February, returning to approximately pre-COVID levels with multiple cities showing negative results for the first time in over 10 years.
At the same time, commercial landlords showed growing signs of stress, as two major funds defaulted on mortgages. Nearly $100 billion of commercial real estate debt will come due over the course of 2023.
Tech layoffs declined M/M in February but were still well ahead of December’s figure and in line with much of 2H22.
German consumer price inflation for February came in at 9.3% Y/Y, above expectations and up slightly from January’s figure. Broader Eurozone inflation figures were down slightly M/M, though core inflation was up and above expectations.
The South Dakota state legislature passed a bill that appears to redefine the legal definition of money in interstate commerce to specifically exclude bitcoin while laying the groundwork for a state-issued digital currency (e.g. a CBDC). Similar bills are under consideration in 21 other states.
US Treasury Undersecretary Nellie Liang detailed steps the department is taking to evaluate the implementation of a CBDC.
The Financial Action Task Force (FATF), an unelected international bureaucracy, added South African and Nigeria to their “grey list” of nations that allegedly need to increase their “anti-money laundering” regulations, which will likely have negative ramifications for capital flows into both countries.
At a bankruptcy hearing for Voyager Digital, an SEC representative commented that the agency believes Binance is operating an unregistered securities exchange in the US.
Three senators wrote a letter to Binance calling it a “hotbed of illegal activity” and requesting further disclosure from the exchange.
SEC Chairman Gary Gensler noted in public remarks that many “crypto” exchanges are unlikely to meet the standards of “Qualified Custodians.”
Nigerian investor and bitcoin activist Abubakar Nur Khalil published a piece in Forbes detailing how the breakdown of the Naira currency is driving more bitcoin adoption in his home country.
Block released new details on the hardware wallet and mobile app it’s developing for accessible bitcoin self-custody.
Both TBD (part of the Block organization) and Breez announced new Lightning Service Provider (LSP) infrastructure aimed at extending a mass market lightning experience to more businesses and end users.
Jack Dorsey posted a 10 bitcoin bounty for a permissionless GitHub alternative based on the Nostr protocol.
Gibraltar-licensed private bank Xapo Bank announced a partnership with Lightspark to integrate lightning payment functionality for purchases of up to $100. The integration makes Xapo the first fully licensed private bank to offer lightning payments.
Meanwhile, the Biden Administration executed its first veto against a bill that would restrict retirement fund managers from making investment allocation decisions based on ESG priorities.