Ten31 Timestamp 791,947
Congress’s debt ceiling brinkmanship dragged on this week, as both sides of the aisle took pains to gesture wildly at the gravity of the situation, which seems to largely amount to a negotiation over resetting baseline federal spending in 2024 all the way back to levels not seen since 2022. The drama drove bond yields much higher this week, a dynamic further exacerbated by Fed commentary pointing to the need for more rate hikes and slightly higher inflation readouts. Over the weekend, lawmakers worked out a tentative deal that unsurprisingly appears to make few substantial changes to federal spending in exchange for another couple years of can-kicking.
While politicians continue to theatrically rearrange the deck chairs on the Titanic, the bitcoin ecosystem saw some noteworthy developments this week, including Ron DeSantis’s explicitly pro-bitcoin commentary as part of his Presidential campaign announcement. The comments make DeSantis the third candidate in as many weeks to proactively project a positive stance toward bitcoin (following Robert Kennedy, Jr and Vivek Ramaswamy at the Bitcoin Conference last week). While these are just high-upside, low-stakes gestures at this point and we put little stock in the promises of politicians trying to win elections, we at least find it notable that bitcoiners have become enough of a recognized voting bloc to merit these kinds of political appeals.
Portfolio Company Spotlight
Peach is a non-custodial P2P bitcoin marketplace offering a mobile app with intuitive user flow and minimal KYC requirements based on Swiss regulations. The app matches pseudonymous buyers and sellers based on user-selected trading criteria and a reputation algorithm, then facilitates exchanges via multi-sig escrow contracts in a simple process comparable to the UX of popular dating apps. Peach aims to make private, P2P bitcoin buying easy and available to a mass market audience.
Selected Portfolio News
Start9 released its latest OS and introduced two new products – the Server One and the Server Lite – set to be released later this year:
StatMuse introduced StatMuse+, a new premium offering with enhanced features:
Mutiny released the Signet version of its wallet:
Unchained welcomed Shimon Lazarev as the company’s new Chief Marketing Officer:
Swan announced a major platform update, including a transfer of client assets to two new qualified custodians:
Media
Ten31 Co-Founder and Managing Partner Grant Gilliam published an essay recapping Ten31’s deployment of $100 million of capital into bitcoin companies and previewing some of our next steps.
Matt Odell joined Rodolfo Novak and Harry Sudock – representatives of Ten31 portfolio companies Coinkite and GRIID – on What Bitcoin Did to discuss the “Ledger Recover” controversy with Ledger’s CEO.
Strike CEO Jack Mallers sat down with Matt Odell and Adam Back on the latest episode of Citadel Dispatch.
StatMuse released its latest monthly Muse Letter, recapping highlights from the month.
Ten31 portfolio companies Strike, River, and Swan were featured in a Forbes article detailing bitcoin-only exchanges.
Marty Bent wrote a few detailed Twitter threads surveying the strategy of Ten31 portfolio company Standard Bitcoin.
Market Updates
US legislators remained committed to debt ceiling theater for another week, though appeared to be nearing a two-year deal as of Friday evening and announced a tentative agreement over the weekend.
The Personal Consumption Expenditure (PCE), ostensibly the Fed’s favored inflation measure, rose 4.4% Y/Y in April, up slightly from March’s figure, potentially complicating the FOMC’s upcoming interest rate decision in June.
Multiple Fed officials this week pointed to a likely need for additional hikes over the next couple months.
However, figures released this week point to nearly 5% Y/Y contraction in M2 money supply, the fastest slowdown since 1933. The steep contraction helped drive the largest wave of bankruptcies over a two-day period since 2008.
The week’s news drove the rates complex broadly higher, with three and six month T-bills hitting their highest yields since 2006, while yields on bills maturing in early June broke 7%.
Officials from nine Asian countries met in Tehran this week to discuss topics including officials’ growing interest in de-dollarization.
In the UK, reported inflation for April came in at 8.7%, down notably from March but above expectations, with annual food price inflation still near 20%. Yields on UK gilts pushed 55bps higher on the week, the second-largest weekly move since 2008.
Reuters reported that prominent crypto exchange Binance improperly co-mingled billions of dollars of customer funds with company revenue in 2020 and 2021. Binance quickly denied the allegation.
Regulatory Update
Florida governor and Republican presidential candidate Ron DeSantis spoke favorably of bitcoin this week, noting in a Twitter Spaces conversation with Elon Musk that US citizens have “every right to do bitcoin.”
Noteworthy
Bitcoin and lightning developer Burak – noteworthy for his multiple disruptions of LND last year – released more information on Ark, a new second layer protocol for bitcoin payments.
Bitcoin Core v25.0 was released.
Popular hardware wallet provider Ledger put plans for their “Ledger Recover” service on pause amid widespread concerns about security, privacy implications, and auditability of the feature.
But in a positive step, Ledger announced they will accelerate their roadmap for open sourcing more of the company’s tech stack.
An anonymous user on Stacker News raised concerns about the potential invasiveness of Amboss Technologies’ privacy policy.
In the latest example of anti-cash policies from world governments, India announced it would remove the highest denomination rupee from circulation later this year.
A panel overseeing credit default swaps ruled that the firesale of Credit Suisse did not constitute a bankruptcy event, leaving Credit Suisse CDS holders without any payout.
Travel
Nashville BitDevs, June 13
Nashville Investing in Bitcoin Businesses Summit, June 14
Austin BitDevs, June 15
Nashville Lightning Summit, July 13-14
BitBlockBoom 2023, August 24-27