Ten31 Timestamp 800,060

This week saw a number of bearish updates across several macro indicators, including declining federal tax receipts and retail sales, as well as signs of ongoing stress in commercial real estate. The regulatory backdrop was more mixed, as the week’s most attention-grabbing political headline – Robert F. Kennedy, Jr’s plan to partially back US Treasuries with bitcoin and eliminate capital gains taxes on bitcoin if elected President – was partially offset by news that regulators in Kuwait have banned bitcoin payments, mining, and associated services, apparently at the behest of the FATF. Ten31 Managing Partner Marty Bent has written extensively about the dangers of this supranational body of unelected bureaucrats, and this week’s news out of Kuwait is a reminder of their ongoing influence. That said, it’s also yet another advertisement for the value proposition of bitcoin, a money that fundamentally transcends state or corporate control, as is this week’s ideologically motivated de-banking of prominent British politician Nigel Farage.

Portfolio Company Spotlight

Oshi provides a suite of tools for small businesses to level up their loyalty programs through the power of bitcoin rewards. Oshi allows local businesses without the reach or resources of large chains to seamlessly offer bitcoin-denominated loyalty programs, driving new customer acquisition and retention more effectively than traditional “punch-card” models that are difficult to manage and have no transferability. Through integrations with Square, Shopify, and WooCommerce, Oshi empowers local merchants to easily offer attractive bitcoin rewards to differentiate and grow their businesses.  

Selected Portfolio News

Mempool.space announced a series of updates that will roll out in the site’s next version release:

Mutiny Wallet released its first version for Android:

Strike enabled recurring bitcoin purchases directly from users’ bank accounts:

HodlHodl rolled out a redesigned UI for its lending platform:

Media

Ten31 Managing Partner Matt Odell participated in two episodes of What Bitcoin Did, one of which was recorded live at Bitcoin Park last week. 

The latest episode of the Money Matters podcast, featuring NFL running back Saquon Barkley and hosted by Strike Founder Jack Mallers, was released this week. 

Standard Bitcoin Co-Founder and CEO Tom Masiero published a piece diving into the economics and strategy behind mining bitcoin off-grid with stranded gas. 

Ten31 published an essay providing some additional detail on our investment in Nostr platform Primal. 

The Unchained blog wrote a new piece on preparing for a higher-fee environment with UTXO management. 

Market Updates

Federal tax receipts for June were down over 9% Y/Y, with LTM receipts now down over 7% for the steepest decline since spring 2020. 

US retail sales came in at 0.2% M/M, good for the third consecutive month of retail sales growth but below consensus expectations. On an inflation-adjusted basis, sales were down 2.5% Y/Y, marking the eighth consecutive annual decline, the longest streak since 2009. 

Existing home sales fell again last month for an annual decline of 19%. Despite the softening of purchases, prices remained pinned near all-time highs, keeping housing unaffordability at record levels.

Several commercial properties in Baltimore were sold at steep discounts this week, apparently the latest casualties of a deteriorating commercial real estate environment that Starwood Capital chairman Barry Sternlicht called a “category five hurricane.”

The bitcoin network’s block height crossed 800,000, meaning the next block subsidy halving is now just under 40,000 blocks (~9 months) away. 

Regulatory Update

Following his pro-bitcoin speech at the Bitcoin Miami Conference in May, US Presidential candidate Robert F. Kennedy, Jr announced a plan this week to partially “back” US Treasuries with “hard currencies” including bitcoin.

At the same event, Kennedy also announced a plan to eliminate capital gains taxes on bitcoin. 

Elsewhere in the US Presidential race, Republican candidate Ron DeSantis suggested he would ban CBDCs if elected to the office.

In an attempt to comply with guidance from the unelected bureaucrats at the Financial Action Task Force (FATF), financial regulators in Kuwait issued an “absolute ban” on bitcoin payments and mining, while also prohibiting companies from providing any bitcoin-related services. 

The SEC signaled it would appeal last week’s court ruling that Ripple’s sales to institutions did not constitute securities offerings. 

A new bipartisan bill in the US Senate seeks to place new AML requirements on so-called “DeFi” protocols. 

Noteworthy

Nigel Farage, a prominent British conservative politician and key proponent of the UK’s Brexit initiative, said he has evidence his bank account was closed several weeks ago for “personal and political reasons,” another advertisement for permissionless, apolitical  money. 

Alex Gleason, Head of Engineering at former President Donald Trump’s Truth Social, announced his resignation in order to focus on building a new Nostr-based project. 

Several bitcoin developers introduced Frostsnap, a new FROST-based project to potentially offer users better multisig UX, on-chain privacy, and lower fees. 

Nostr developer Pablo Fernandez released Nostr Data Vending Machine (DVM), which allows users to broadcast job requests that AI agents can compete to serve for a prespecified payment amount. 

Travel

• Nashville Bit Devs and Meetup, August 15-16

• BitBlockBoom 2023, August 24-27