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It was a big week for the US stock market, as speculators held their breath in anticipation of the latest quarterly earnings report from GPU behemoth Nvidia, one of the few titanic companies holding markets aloft as equity indices have continued to make successive new all-time highs this year. Despite some severe jitters early in the week, bulls lived to fight another day as Nvidia posted blowout earnings that sent its already stratospheric market cap soaring past $2 trillion, surpassing the GDP of most countries on earth. While we’re bullish on the potential of AI and take no view on Nvidia’s valuation, this increasing reliance on a concentrated set of tech behemoths to serve as the de facto savings and retirement account for the developed world gives us pause and is the latest illustration of bitcoin’s potential as a unique, de-financializing force set to eat much of the store of value market. 

It was an equally big week for scions of traditional finance objecting to that thesis. CNBC’s Andrew Ross Sorkin led the way by informing viewers that bitcoin cannot, in fact, be a good store of value as its price doesn’t stay the same over time (Sorkin was presumably thinking of famously stable stores of value including gold, the S&P 500, and real estate). Elsewhere, the European Central Bank took to Twitter once again to denigrate bitcoin as “costly, slow, and inconvenient,” an interesting argument given that bitcoin is already facilitating trillions of dollars of volume annually and doubling the total annualized transactions processed by Fedwire after just fifteen years of bootstrapping with no downtime, government support, or centralized direction. As savers and investors worldwide keep looking for better ways to outrun monetary dilution and the bitcoin network keeps trustlessly producing a new block every 10 minutes, we’re happy to continue taking the other side of the ECB’s bet.

Portfolio Company Spotlight

Coinkite develops and manufactures consumer tools for interacting with bitcoin, including the Coldcard – a highly secure hardware signing device that sets the standard for private key custody – physical bearer instruments (Opendime and Satscard), an NFC-enabled card for signing transactions (Tapsigner), the upcoming Q hardware wallet and Satslink device, and much more. The company’s product portfolio balances security with usability and includes some of the most widely used products in the bitcoin ecosystem among both consumers and institutions. 

Selected Portfolio News

Coinkite published the source code for its upcoming Coldcard Q device:

Primal launched the latest version of its iOS app, which now includes an upgraded wallet and several other new features:

Mempool.space added new audit features for the Liquid Network sidechain:

Media

Mutiny Wallet Co-Founder Ben Carman joined the Stephan Livera Podcast to discuss Mutiny’s latest updates and roadmap, as well as potential changes to bitcoin and lightning over time.

Market Updates

The market continued to get more skittish about the path to long-anticipated Fed rate cuts this week, as the minutes from the latest FOMC meeting pointed to most officials remaining concerned about “moving too quickly” with monetary easing. After pricing in multiple rate cuts before June, investors are now baking in no cuts until later in the year. 

Despite growing unease around a near-term Fed pivot, stock indices were still able to recover to yet another set of all-time highs late in the week on the back of a monster Q4 earnings report from Nvidia, which added one whole Bank of America to its market cap on Thursday for the largest single-day gain in equity value on record. 

However, the surge in headline index values masked a continuing decline in stock market breadth, which is now at its most concentrated level since 1931. 

US government bonds, meanwhile, generally ended the week unchanged following a very weak auction of new 20 year issues. 

Over in the section of the economy not (explicitly) dedicated to financial engineering, construction of new homes in the US declined by nearly 15% last month, sharply deviating from a recent uptrend and reaching the metric’s lowest record since April 2020. 

Elsewhere, the Wall Street Journal reported that Americans’ share of disposable income dedicated to food has spiked to a decades-long high, including 20-year highs for non-discretionary grocery spending.  

Overseas, Chinese stock indices staged a small recovery this week after a months-long rout that has led to substantial intervention on the part of financial regulators and the PBOC.

Regulatory Update

US House Majority Whip Tom Emmer sent a letter to the Office of Management and Budget this week sharply criticizing the Department of Energy’s recent authorization of an invasive “emergency survey” of bitcoin miners in the US. 

Shortly thereafter, large public miner Riot Platforms and several bitcoin mining activist groups filed a civil action against various federal agencies in opposition to this proposed data collection scheme. Late Friday, the DOE responded by agreeing to temporarily suspend its survey efforts. 

Overseas, the Nigerian government – currently struggling with the hyperinflation of its local Naira currency – took new steps to restrict access to major cryptocurrency platforms including Binance, Coinbase, and Kraken. The move comes less than two months after the Nigerian Central Bank lifted its ban on cryptocurrency trading. 

Noteworthy

Reddit, a highly popular online forum and content aggregation site, announced in the S-1 filing for its upcoming IPO that it has invested a portion of its cash reserves into bitcoin. The news follows a similar headline about VC giant Founders Fund from last week, and we expect this decision to become increasingly common over the next several years. 

A trove of new correspondence between pseudonymous bitcoin creator Satoshi Nakamoto and early adopters Adam Back and Martti Malmi was released this week. 

Coinbase Commerce removed support for layer-one bitcoin payments, though the company said it was continuing work on integrating lightning payments. 

Travel

• Ten31 Tribe Event & Bitcoin Takeover (Austin, TX), March 14-15

• Bitcoin Asia Conference, May 9-10

• Bitcoin 2024, July 25-27