Ten31 Timestamp 826,568
The Ten31 team spent most of the week at Nashville’s Bitcoin Park for the 2024 Energy and Mining Summit, where over 150 industry participants gathered to discuss all facets of the rapidly growing bitcoin mining ecosystem. Despite nationwide inclement weather, the Summit was packed with engaged participants from every corner of the industry and included high-signal contributions from public company leaders, innovators in mining technology, key regulators, and executives from the energy and power space (including representatives from many Ten31 portfolio companies). The event was appropriately timed given the cold snap that affected most of the country this week, as bitcoin mining curtailment and demand response programs once again helped to offset some of the electrical grid strain resulting from this weather in several parts of the country. This dynamic was not lost on many of the regulators and utility operators in attendance, and perhaps the key takeaway from the week was that mining is becoming more mainstream and only continuing to get more intertwined with energy and power production, a trend we expect to escalate over the next decade.
Portfolio Company Spotlight
Satoshi Energy provides market-leading services and analytics for behind-the-meter data center development projects bringing together bitcoin mining operators and power producers. The company offers plug and play power contracts and project monitoring services, as well as cutting edge tools for sites to manage credit exposure and real-time settlement of invoices. With nearly 2GW of projects under development and a growing suite of products and services, Satoshi Energy is pioneering the accelerating convergence of power production and bitcoin mining.
Selected Portfolio News
Strike published a 2023 year in review and overview of its 2024 roadmap:
Media
Zaprite Head of Business Development and Ten31 Advisor Parker Lewis joined ARK’s Bitcoin Brainstorm podcast to discuss bitcoin’s outlook for 2024.
Will Cole, Zaprite’s Head of Product, appeared on the Bitcoin Frontier podcast to dissect the future of bitcoin payments and Zaprite’s role in enabling that trend.
Coinkite Co-Founder and CEO Rodolfo Novak discussed some of the latest technical developments in bitcoin on The Investor’s Podcast.
Unchained published an updated blog post delving into recent court cases affecting bitcoin IRAs and highlighting why Unchained is the best destination for bitcoin IRA clients.
Market Updates
The yield on benchmark 10-year US Treasuries increased over 20bps on the week, pushing over 4% again for the first time since late last year.
Even with yields moving higher, the S&P 500 index reached new all-time highs, breaking levels not seen since just before the Fed began its latest tightening cycle.
In the latest iteration of mixed messages coming out of the Federal Reserve, Fed governor Chris Waller suggested the central bank has “no reason to move as quickly or cut as rapidly” as in prior cycles.
Amidst a wave of new use of the Fed’s BTFP facility by banks apparently looking for an arb play rather than emergency funding, the US’s comptroller of the currency indicated this week that regulatory agencies are developing new rules to force banks to tap the Fed’s discount window more frequently.
US industrial production for December came in slightly up M/M, though production for Q4 fell 2-3% on an annual basis. Meanwhile, the Empire State manufacturing index plunged to its lowest level since May 2020.
New data out this week showed US existing home sales for 2023 clocked in at the lowest level in nearly 30 years.
On the back of rising tensions around key shipping lanes in the Red Sea, worldwide freight costs are going parabolic once again after cooling off from the supply chain snares of 2020-21.
Roughly a week after the SEC finally approved nearly a dozen spot bitcoin ETFs, total inflows (net of substantial selling from Grayscale conversions) surpassed $1 billion, with BlackRock and Fidelity each exceeding $1 billion of flows into their vehicles. Volume also ticked up substantially for the ETF complex in the back half of the week.
As a cold snap hit much of the US this week, bitcoin miners in Texas once again curtailed operations as part of demand response and ancillary service programs to help maintain local electrical grid stability.
Regulatory Update
The EPA laid out a new proposal for “methane fees” to be levied on oil and gas producers that exceed specified levels of allowable methane emissions. Fees would run from $900-1,500 per ton and would further incentivize energy companies to explore integrating bitcoin mining, which is uniquely suited to capture and monetize these emissions.
The US Treasury Department and IRS announced that the public would not be required to report cryptocurrency transactions in excess of $10,000 (which would have been the case under new provisions that took effect on January 1) until a public comment period has been completed.
The European Union reached a provisional agreement on new rules that would force stricter KYC/AML requirements on “crypto asset service providers.”
Nasdaq released its 2024 Global Financial Crime Report, which notably includes no mention of bitcoin despite growing unfounded noise out of Capitol Hill on bitcoin’s supposed link to crime and terrorism.
Noteworthy
Luxor published its 2023 bitcoin mining year in review.
TechCrunch ran an article this week highlighting concerns that new generative AI applications could make KYC policies “effectively useless.”
Travel
Austin BitDevs, February 15
Nashville BitDevs and Meetup, February 20-21