Ten31 Timestamp 803,113
Major traditional asset classes took another beating in the headlines this week, as ratings agency Moody’s followed Fitch’s lead from last week by downgrading credit ratings and outlooks across the US banking complex. The downgrades, which affected both small and large banks including some household names, cited “particular risks in some banks’ commercial real estate portfolios” as one factor driving the more bearish outlook, and the week offered no shortage of new data points to that effect, including major REITs halting commercial real estate lending entirely while struggling flexible office provider WeWork – which operates ~44 million square feet of space – flagged going concern risk in its latest quarterly filing.
Portfolio Company Spotlight
Strike is an emerging fintech and payments innovator leveraging the lightning network to allow consumers and merchants to send and receive payments in a wide variety of settings. Strike's offerings include a consumer app – now available in 65+ countries – for P2P payments, bitcoin purchases, global remittances, and more. Strike also offers a merchant API allowing vendors to easily benefit from lightning’s low cost, near-instant settlement. The company has one of the most robust pipelines in the bitcoin ecosystem and is set to roll out a variety of exciting new products and features over the next several years.
Selected Portfolio News
Fedi and Stakwork announced the winners of their AI hackathon:
Strike re-enabled debit card deposits to the platform:
Primal released the latest version of its Android beta app:
Mutiny Co-Founder and CEO Tony Giorgio joined the What Bitcoin Did podcast to discuss building Mutiny and the evolution of lightning.
River published a new article assessing what lightning network UX might look like in 2025.
CPI data for July came in at +3.2% Y/Y, up slightly from June but lower than consensus expectations.
Following Fitch’s downgrade of US government credit last week, Moody’s downgraded the credit ratings of ten regional US banks on the back of ongoing deposit flight and interest rate headwinds to asset values.
Moody’s also downgraded the outlook to negative for 11 larger banks, including CapitalOne, PNC, and Fifth Third. Finally, the ratings agency noted it would review ratings for six others, including State Street, BNY Mellon, and US Bancorp.
The commercial real estate market saw an onslaught of new negative headlines this week, including reports that large banks are seeing no bids for their property loan portfolios and that some of the largest REITs (including those run by Blackstone and KKR) are halting new CRE lending entirely.
Meanwhile, the latest 10Q filing for WeWork – once a ~$50 billion unicorn expected to disrupt office real estate – cited “substantial doubt” about its ability to continue operating.
Overseas, China’s largest property developer posted its worst loss since going public nearly two decades ago and pointed to very poor leading indicators. The developer’s debt is now trading at ~5 cents on the dollar, down from ~80 cents earlier this year.
Leading ASIC manufacturer Bitmain announced it would take a $54 million stake in bankrupt miner Core Scientific as part of Core’s restructuring process.
The Federal Reserve announced a new program to oversee US banks’ activity in the “crypto” space, including new guidance for banks attempting to engage with stablecoins.
Pro-bitcoin lawyer and wealth adviser Matthew McClintock published a helpful thread summarizing some concerning implications of the “Corporate Transparency Act,” which is set to go into effect next year.
Fireblocks announced the discovery of significant vulnerabilities in many prominent multi-party computation (MPC) protocols, the latest example of the broad attack sufrace created by the complexity of most non-bitcoin “crypto” custody.
Developers on the Stratum V2 team released a roadmap for the SV2 reference implementation.
The Kenyan government suspended operations of eyeball-scanning crypto venture Worldcoin and seized its orbs.