Ten31 Timestamp 810,326
A flood of additional signals of entrenched (and decidedly non-transitory) inflation hit the wire this week, including oil prices making new YTD highs (and getting closer to levels not seen since the US aggressively drained its Strategic Petroleum Reserve last year), record-low housing affordability, and growing upward pressure on wages for domestic auto manufacturers. Meanwhile, government bond yields around the world continued to skyrocket, including new post-2007 highs for most long-dated US issues; at one point in the week, the 10-year yield – generally viewed as the benchmark “risk-free” rate for capital allocation around the world – was up as much ~60bps just since the start of the month. All this was the backdrop to the US national debt surpassing $33 trillion (after eclipsing $32 trillion just a couple months ago) and the federal government coming up on the precipice of yet another performative shutdown. But other than that, markets were generally quiet this week.
Portfolio Company Spotlight
Ten31 led a $3 million funding round for AnchorWatch, a provider of bitcoin insurance policies powered by innovative use of Miniscript. The company’s Trident Vault platform leverages bitcoin’s native properties to offer bitcoin holders an intuitive, enterprise-grade collaborative custody solution that allows for highly composable and dynamic custody schemes, all with the backing of regulated insurance products that further mitigate risks of theft, key mismanagement, natural disasters, and more. Trident was designed with distributed teams and complex workflows in mind, and AnchorWatch’s embedded property insurance offerings are set to unlock further bitcoin adoption among various enterprises and institutions of all sizes. Trident Vault is currently available for testing in an open beta.
Selected Portfolio News
StatMuse recorded its highest daily unique user count in company history this week:
Fold launched “Category Boosts,” which allow cardholders to benefit from additional rewards across selected categories:
Strike updated the layout and features of its enterprise dashboard:
River’s Lightning platform launched support for LNURL payments:
Media
Ten31 Co-Founder and Managing Partner Jonathan Kirkwood published an essay delving into some of the businesses and services that are effectively making bitcoin even more scarce than many appreciate.
The latest episode of the Money Matters podcast, featuring Dr. Paul Saladino and hosted by Strike founder Jack Mallers, was released this week.
StatMuse released the latest update of its monthly Muse Letter.
Will Cole, Head of Product at Zaprite, appeared on the Stephan Livera Podcast to discuss the ways Zaprite is helping to drive greater merchant adoption of bitcoin.
Mutiny published an overview of the company’s path to improving payment reliability.
Market Updates
The Personal Consumption Expenditures (PCE) index – the Fed’s preferred metric for assessing consumer price inflation – came in at +0.1% M/M in August, slightly below consensus expectations. However…
Signals of entrenched price inflation abounded throughout the week, as oil hit new YTD highs and housing affordability reached new all-time lows.
New upward price pressure also continued to emerge from the labor market, as the UAW expanded its weeks-long strike to new Ford and GM plants, affecting another ~7,000 workers on top of the 18,000+ already on strike. The US has now lost the most workdays to strikes and walkouts in over two decades so far this year.
Meanwhile, the US’s national debt eclipsed $33 trillion for the first time this week, including a spree of $100 billion of new borrowing over just five days.
Amid the recent flood of new debt issuance, US Treasury Department officials made renewed references to plans to engage in government bond buybacks to “boost market resilience” as mark-to-market losses on outstanding US Treasuries continued to widen to historic levels.
That set of headlines collectively helped push the US 10-year Treasury yield above 4.7%, a new post-2007 high (before it retrenched some later in the week), an apparently mystifying development to some Fed officials.
Overseas, the Japanese yen continued to weaken, pushing past lows set last fall. On Friday, the Bank of Japan surprised markets with another round of unscheduled government bond purchases.
Elsewhere, the Bank of England announced plans for a permanent lending facility for non-bank financial institutions (like the pension funds that nearly collapsed in the wake of rising rates last year).
Cryptocurrency platform Ripple announced it would not move forward with its previously announced plans to acquire embattled custody and exchange provider Fortress Trust.
Regulatory Update
A bipartisan group of Congressmen sent a letter to the SEC arguing that pending spot bitcoin ETFs should be approved immediately. However, ahead of a looming government shutdown, the SEC again delayed the process for several outstanding ETFs.
In his latest Congressional testimony, SEC Chairman Gary Gensler once again reiterated his view that bitcoin does not constitute a security under the Howey Test.
Chase’s operation in the United Kingdom announced it would decline any outgoing payments “related to crypto assets.”
Noteworthy
Bitcoin Core developer James O’Beirne published a proposal for a broad covenant soft fork that would enable elements of BIP-118, BIP-119, and BIP-345.
Block published the latest iteration of its global bitcoin sentiment survey.
The Wall Street Journal published a piece delving into recent dysfunction and turbulence at Binance.
CNBC wrote a profile covering the growth of bitcoin mining activity in Texas.
The Human Rights Foundation announced new donations totaling 19 bitcoin to 15 projects around the world.
Travel
Utah Portfolio Company Retreat, October
Pacific Bitcoin, October 5-6
Nostrville @ Bitcoin Park, November 8-10