Ten31 Timestamp 809,281
Markets shook off much of the optimism that had built up during the summer this week on the back of Fed commentary indicating interest rates would stay higher than previously expected through 2024. The S&P continued its largest drawdown since March, while the 10-year US Treasury yield reached highs not seen since before the Great Financial Crisis. That said, while traditional asset classes have had a rough few weeks, traditional asset managers have only continued to show more interest in offering bitcoin products to their clients, the latest examples of which came this week in the form of new bitcoin custody and investment funds from Deutsche Bank and Nomura. While we don’t expect these vehicles or the many forthcoming ETFs to be the long-term future of institutional interaction with bitcoin, the steady drumbeat of growing interest in bitcoin from legacy financial service players even amid tepid bitcoin price action and wobbly macro indicators serves as one more recent indicator of bitcoin’s staying power.
Portfolio Company Spotlight
Unchained is a bitcoin financial services platform offering a suite of products to consumers and enterprises for securing and managing bitcoin holdings through a multi-signature, collaborative custody model. Unchained’s infrastructure allows users and institutions to hold 2 of 3 keys in a multi-sig quorum, remaining in full control of their bitcoin while leveraging Unchained for backup signing and technical support if necessary. The platform eliminates the issue of counterparty risk inherent in traditional financial products without turning users into single points of failure through key mismanagement, theft, etc. Unchained offers a variety of additional financial services on top of its custody platform, including bitcoin-backed lending, trading, IRA and inheritance products, and many more to come.
Selected Portfolio News
Start9 added packages for Stable Diffusion and FreeGPT to its marketplace, allowing users to privately host their own AI image generator and chatbot:
Mutiny Wallet now allows users to set “budgets” for Nostr zaps, automatically approving zaps below a specified threshold to improve zap UX:
Ten31 Advisor Parker Lewis wrote an essay on bitcoin’s path to becoming the world’s prominent medium of exchange and unit of account.
Unchained published two new blog posts, one comparing various common approaches to bitcoin self-custody and another discussing the importance of Unchained’s approach to bitcoin-collateralized lending.
As expected, the Federal Reserve held its benchmark interest rate steady at the central bank’s latest FOMC meeting, but pointed to the potential for one more additional hike this year, as well as fewer rate cuts than previously expected in 2024.
Markets broadly sold off following the Fed’s decision and updated commentary, with the yield on 10-year US Treasuries touching 4.5%, a new post-2007 high.
Credit card losses also made new post-2007 highs, rising to over 3.6% at a pace not seen since the Great Financial Crisis.
Average US gas prices continued to climb this week, reaching YTD highs at just over $4/gallon. Meanwhile, UAW strikes spread to more facilities this week, including GM and Stellantis locations in 20 states.
A week after massive asset manager Franklin Templeton joined the race for a bitcoin spot ETF, Deutsche Bank announced it would begin offering bitcoin custody and related services to its clients.
Meanwhile, the digital assets arm of Japanese bank Nomura launched a new bitcoin fund for institutional investors.
The head of crypto enforcement at the SEC warned the agency will likely continue bringing new charges against “DeFi” projects and crypto exchanges (beyond just Coinbase and Binance) that it sees as violating securities regulations.
The US House Financial Services Committee passed Congressman Tom Emmer’s CBDC Anti-Surveillance Act, which seeks to prevent the Federal Reserve from issuing a CBDC to individuals or using such a tool to conduct monetary policy. The bill will now move to a vote among the broader House of Representatives.
The UK parliament passed the long-debated Online Safety Bill, a piece of legislation with an appropriately Orwellian title that will likely require communications platforms to build backdoors in their services and make additional government-directed moderation decisions in the name of enhanced safety for minors.
Bitmain announced its new Antimner S21 family of bitcoin miners, which boast improved nameplate hashrate and efficiency metrics.
Square announced its parent company CEO (and noted bitcoin advocate) Jack Dorsey would assume the chief executive role at Square.
The protracted Mt. Gox bankruptcy case was extended once again this week, with the deadline for payouts to creditors pushed back by another year to October 2024.
The Wall Street Journal published an in-depth article on the headwinds affecting major Chinese property developer Country Garden and the Chinese real estate market at large, which could have significant implications for the broader Chinese economy.