Ten31 Timestamp 847,038
A positive jobs headline on Friday (albeit with some less encouraging details under the hood) wasn’t enough to offset the deluge of worsening employment and output metrics that hit the wire throughout the week. Fed estimates for Q2 GDP, manufacturing ISM, the unemployment rate, and job openings all ticked in the wrong direction, with new analysis suggesting the past year’s job gains have likely been materially overstated. Meanwhile, global central banks including the ECB began their first planned benchmark interest rate cuts this week, even as the ECB simultaneously raised its inflation forecast and the Federal Reserve’s latest internal model shows consumer price inflation above 2% through 2027. Inflows into spot bitcoin ETFs continued their hot streak this week, delivering their second-best day since inception as bitcoin’s price broke the $71,000 level for the second time in the past month.
Portfolio Company Spotlight
Giga Energy is a bitcoin miner and energy infrastructure provider focusing on stranded energy and waste gas opportunities. The company helps oil and gas producers use bitcoin mining to optimize production and monetize gas resources that would otherwise be wasted, through both proprietary mining deployments and the provision and operation of tailored power generation equipment including generators, data centers, and electrical infrastructure. Giga sits at the forefront of the convergence of the energy production and bitcoin mining industries, a trend we expect to gain significant momentum over the coming decade.
Selected Portfolio News
Unchained surpassed $700 million in cumulative bitcoin-backed loan originations with zero loan losses, an unsurpassed track record in the industry:
Unchained also announced the launch of Unchained Signature for business, a white-glove service tailored to enterprise accounts:
Media
Zaprite Head of Business Development and Ten31 Advisor Parker Lewis joined the What Bitcoin Did podcast to discuss the evolution of bitcoin’s economic incentives.
Unchained Co-Founder Dhruv Bansal led a discussion with bitcoin analyst Dylan LeClair at a recent Unchained Signature client event.
Strike Founder and CEO Jack Mallers participated in a panel on financial freedom at this week’s Oslo Freedom Forum.
The research team at Mempool.space published a report delving into the intermittent phenomenon of empty blocks on bitcoin’s blockchain.
Market Updates
A week filled with updates pointing to a fundamental slowdown in the US economy kicked off with the Atlanta Fed’s GDP forecast plunging to just 1.8% for Q2 (after sitting at >4% just a few weeks ago).
Meanwhile, the latest US manufacturing ISM reading slowed for the second consecutive month to 48.7 (vs consensus of 49.6) as new orders declined by the most in two years. Construction spending also unexpectedly slowed.
Continuing a pattern that has played out for much of the past two years, GDP figures for the first quarter of this year were also revised down to 1.3% (vs 1.6% previously).
More concerningly, new research from Bloomberg this week suggested that monthly nonfarm payrolls numbers might have overstated actual job growth by ~730,000 last year, with hiring potentially turning negative in October. The analysis also suggests job growth has been below 100,000 per month this year, well below headline levels.
That report provided interesting context for this month’s latest NFP report released on Friday – the headline figure of +272,000 for May was better than expected, but the gain was once again entirely due to part-time employment, and the unemployment rate broke 4% for the first time in over two years.
At the same time, job openings continued to decline to the lowest level since February 2021.
Despite the negative data points on output and employment, the Cleveland Fed’s latest forecast points to only very slow incremental progress on price inflation, with the metric not expected to reach the Fed’s 2% target until mid-2027.
After over a year of investor hand-wringing about the slow-moving trainwreck of office real estate, the Wall Street Journal ran a piece this week highlighting growing stress in the multifamily segment of the US commercial property market.
Overseas, various central banks began to cut their benchmark interest rates as expected this week. Both the Bank of Canada and the ECB made their first 25bps cuts, and the ECB notably did so while also raising its inflation outlook.
Inflows into spot bitcoin ETFs re-accelerated this week, with Tuesday seeing the second-highest daily inflow since the vehicles’ inception. Elsewhere, various countries including Thailand and Australia approved and launched their first spot bitcoin ETFs this week.
Regulatory Update
After first setting up its donation flow through Coinbase Commerce – which no longer supports bitcoin – Donald Trump’s presidential campaign began accepting donations in bitcoin over lightning this week.
Republican Senator Ted Cruz posted a tweet about running a few personal bitcoin miners.
Noteworthy
CoreWeave – one of the largest providers of Nvidia GPU hosting – announced a partnership with public bitcoin miner Core Scientific for Core to host 200MW of HPC compute resources at its sites. CoreWeave also made an unsolicited $1 billion takeover offer for Core.
The Human Rights Foundation announced 13 new grants to various bitcoin projects including OpenSats.
Semler Scientific, the publicly traded medical technology company that revealed a bitcoin treasury strategy several weeks ago, announced it had purchased 247 additional bitcoin and filed a shelf registration for up to $150 million to purchase more bitcoin over time. SMLR stock is up nearly 40% since announcing the strategy last month.
Prominent event ticketing platform Ticketmaster underwent a massive data breach that exposed personal data of up to 560 million users, the latest example of the risks of centralized repositories of sensitive user information.
The bankruptcy trustee for defunct fintech infrastructure provider Synapse reported an $85 million shortfall between what Synapse’s partner banks are holding and what depositors are owed.
Travel
Austin BitDevs, June 20
Bitcoin 2024, July 25-27
BitcoinMENA, Dec 9-10