Ten31 Timestamp 807,176

The gradual mainstreaming of bitcoin was on display this week. In Texas, bitcoin mining once again exhibited its potential to be a powerful tool for promoting and maintaining grid stability, as miners including Riot Platforms — one of the largest publicly traded miners in the world — made available over 80,000 MWs (enough electricity to power ~100,000 homes for a month) in response to the grid strain of Texas’s late-summer heat wave. Meanwhile, regulators finally updated critical accounting guidance to allow corporations to more accurately reflect the value of bitcoin held on their balance sheets, potentially paving the way for more institutional treasuries to hold bitcoin as a reserve asset. While our optimism around bitcoin has never relied on an expectation that legacy institutions will become hodlers or cypherpunks overnight, we are also not surprised that large energy and financial players are progressively coming to understand bitcoin’s benefits, and we believe we’ll see many more headlines like these over the coming decade. 

Portfolio Company Spotlight

GRIID is a bitcoin mining company pursuing a differentiated strategy of vertical integration to secure low-cost power and enhanced control over its operations. Founded in 2018, GRIID currently operates across four active sites in the US, with a substantial pipeline of additional buildouts to take place in the near term. GRIID seeks to directly negotiate power contracts as close as possible to the source of generation, with a primary focus on nuclear and hydroelectric power assets. GRIID’s strategy drives both highly competitive power costs and greater control over site build outs and daily operations, all of which are critical to long-term success in bitcoin mining. 

Selected Portfolio News

Unchained welcomed Vinayak Gurjar as its new Chief Financial Officer:

Mutiny added a feature allowing users to seamlessly port their Nostr follows as a “contact list” to create a social payments interface similar to popular apps like Venmo:

Media

A variety of portfolio companies gave presentations or participated in panels at recent conferences including BitBlockBoom in Austin and Baltic Honeybadger in Latvia. Some highlights included:

• Unchained Co-Founder and CSO gave an insightful talk on bitcoin’s origins.

• Ten31 Advisor and Zaprite Head of Business Development Parker Lewis spoke on the world’s path to convergence on bitcoin. 

• River research analyst Sam Wouters delved into the company’s latest insights on the lightning network. 

• HodlHodl and Debifi Founder Max Keidun made several announcements about upcoming changes and new products at HodlHodl. 

Samourai Wallet’s pseudonymous founder joined the Chris Blec podcast to discuss the state of privacy technology in the wake of the Tornado Cash developer indictments. 

The latest episode of ARK Invest’s Bitcoin Brainstorm podcast featured an in-depth discussion on bitcoin’s convergence with AI between Paul Itoi of Stakwork and Kody Low of Fedi.  

Ten31 Managing Partner Marty Bent and Zaprite Head of Product Will Cole appeared on the latest episode of Jimmy Song’s podcast. 

Unchained published an informative article on the mechanics of partially-signed bitcoin transactions (PSBTs) and their potential future applications. 

Unchained CEO Joe Kelly was quoted in a Business Insider article on bitcoin.

Market Updates

Bitcoin mining’s potential to augment electrical grid stability was again on display over the last few weeks, as the strained Texas grid system benefited from miner participation in ancillary service and demand response programs. In particular, Riot Platforms announced it had provided over 84,000 megawatt hours of energy to the market in August as part of these programs. 

Riot’s VP of Research Pierre Rochard provided a helpful overview of some of the program’s details. 

Growing pressure on commercial real estate was highlighted again this week by an extensive article in the Wall Street Journal covering US regional banks’ outsized exposure to the category, which has ballooned by over $1 trillion in the past 8 years.

Saudi Arabia extended its 1 million barrel per day cut to oil production through the end of the year, as the US’s crude oil reserves fell again to nearly a 40-year low.

Ripple Labs, developer of the Ripple cryptocurrency network, announced it would acquire Fortress Trust, a custody and exchange backend provider established in 2021 by the former founders of defunct custodian Prime Trust.  

Regulatory Update

After years of lobbying by industry participants including MicroStrategy’s Michael Saylor, the Financial Accounting Standards Board (FASB) updated its accounting guidance for bitcoin held on corporate balance sheets. 

Under the new rules, companies holding bitcoin can recognize quarterly increases in bitcoin’s fair market value when reporting financial statements, as opposed to the prior treatment, which required companies to report impairments but did not allow for recognition of gains. 

The Federal Reserve’s Vice Chairman Michael Barr suggested a US CBDC is still “a long way off.”

US Senator Ted Cruz, who has historically positioned himself as an advocate of bitcoin, made more positive comments about bitcoin this week.

Noteworthy

BTCPay Server announced a partnership with Spiral and the Lightning Development Kit (LDK) team to develop and launch a BTCPay app, which aims to be a more user-friendly,  non-custodial merchant app for accepting bitcoin and lightning payments. 

Heritage Foundation economist EJ Antoni published a thorough and bearish review of recent US employment statistics. 

An anonymous developer published a proposal for Joinstr, a coinjoin implementation leveraging the Nostr protocol as a communications layer. 

Travel

• Nashville BitDevs and Meetup, September 12-13

• Global Bitcoin Summit @ Bitcoin Park, September 14-16

• Utah Portfolio Company Retreat, October

• Nostrville @ Bitcoin Park, November 8-10