Ten31 Timestamp 804,225

Bitcoin volatility reared its head again this week after several months of sideways or up-only trends. While macro signposts have been flashing warning signals for much of the summer (many of which we’ve mentioned in prior editions of the Timestamp), both domestic and international data points seemed to trend more definitively bearish this week, as US Treasury yields reached highs not seen since 2007 and a slew of headlines out of China pointed to quickly deteriorating financial conditions. Bitcoin’s break to the downside may foretell near-term drawdowns elsewhere in the market – as has been the case with previous drawdowns – but despite the price swings and macro uncertainty around the world, block production continued uninhibited, with bitcoin network hashrate once again marching toward an all-time high. 

Portfolio Company Spotlight

Zaprite is a bitcoin-native invoicing platform providing sleek, non-custodial solutions for checkouts and payments flows denominated in both bitcoin and fiat. Zaprite’s software tools allow for seamless payments experiences for end users while providing critical reporting and accounting infrastructure to merchants using the platform. The company currently offers integrations with Stripe, IBEX, Zebedee, and more, and will roll out connections to Strike and Unchained next week. 

Selected Portfolio News

Ten31 Advisor Parker Lewis and Will Cole joined Ten31 portfolio company Zaprite as Head of Business Development and Head of Product, respectively:

Media

Unchained was featured in a USA Today profile focusing on the company’s differentiated collaborative custody and lending model. 

Parker Lewis made an appearance on the What Bitcoin Did podcast to discuss topics including the potential impact of a BlackRock spot ETF approval. 

Ben Carman, co-founder of Mutiny Wallet, wrote a case study on the team’s use of Lightning Dev Kit (LDK) in building Mutiny. 

Market Updates

A flood of negative updates and data points poured out of China this week following a steady trickle of concerning signs over the past few months.

Country Garden, the largest commercial property developer in China, sought to delay payment on notes owed to onshore investors for the first time. Evergrande, another massive Chinese property developer that has been in dire straits since fall 2021, filed for Chapter 15 bankruptcy protection in New York. 

Meanwhile, Zhongrong Trust, one of the largest Chinese trust companies and real estate lenders with over $100 billion in AUM, missed dozens of payments to several counterparties and reportedly has “no immediate plans to make clients whole.”

Elsewhere, bank lending in China was down 90% M/M in July to levels not seen since 2009, and foreign direct investment into the country declined to the lowest level in nearly 20 years. 

In response to growing signs of economic instability, China’s central bank cut several benchmark interest rates while the government suspended reporting of unemployment data (which had surpassed 21% for the 16-24 y/o cohort in June). 

Across the world, Argentina’s presidential election yielded a surprising result, as  explicitly pro-bitcoin libertarian candidate Javier Milei unexpectedly won the country’s primary election. Milei has called central banking a “scam” and has vowed to shut it down and emulate El Salvador’s model if elected. 

Argentina raised its benchmark interest rate by 21 points and devalued the peso by another 18% overnight in response to the election result. 

Back in the US, the 10-year Treasury yield pushed past its local peak from last fall, reaching its highest level since 2007. 

The latest Fed minutes from the central bank’s July meeting, however, point to a potential for still more rate hikes as officials worry about sticky price inflation. 

Noteworthy

OpenSats announced its latest round of grants for bitcoin and Nostr projects, including support for Fedimint, BDK, LNBits, and more. 

Twitter appears to be preparing additional tiers of identity verification for “premium” users, once again underscoring the importance of Nostr. 

Travel

• BitBlockBoom 2023, August 24-27

• Minneapolis Bitcoin Meetup, August 30

• TABConf, September 6-9

• Nashville Bit Devs and Meetup, September 12-13

• Utah Portfolio Company Retreat, October 2023