Ten31 Timestamp 850,105
It was a tough week for bitcoin (which dropped to ~$60,000 on consternation around Mt Gox distributions), the Japanese Yen (which broke another key level and hit a 40 year low), and the US administrative state (which was dealt a major blow by the Supreme Court’s decision to overturn the Chevron deference doctrine). However, it was a strong week for the Ten31 portfolio, as CleanSpark, one of the largest publicly traded miners in the US, announced its acquisition of GRIID in a transaction that will significantly expand CleanSpark’s power capacity. Elsewhere, Strike marked its latest major international milestone with its launch into the UK, a huge new market for the company’s broad suite of bitcoin services. The Ten31 team has worked closely with both companies on these milestones and is excited to see the results of our collaboration come to fruition. We take pride in our close relationships with founders and look forward to continuing to provide industry-leading support to the blue chip companies that partner with us as bitcoin adoption expands.
Portfolio Company Spotlight
GRIID is a bitcoin mining company with a differentiated strategy of vertical integration to secure low-cost power and enhanced control over its operations. Founded in 2018, GRIID currently operates across four active sites in the US, with a substantial pipeline of additional buildouts to take place in the near term. GRIID seeks to directly negotiate power contracts as close as possible to the source of generation, with a primary focus on nuclear and hydroelectric power assets. GRIID’s strategy drives both highly competitive power costs and greater control over site build outs and daily operations, all of which are critical to long-term success in bitcoin mining.
Selected Portfolio News
CleanSpark announced an agreement to acquire GRIID Infrastructure for an enterprise value of $155 million:
Strike announced the launch of its full suite of services in the United Kingdom:
Strike also added new payment UI options:
Coinkite announced its latest firmware update for the Coldcard Q, which adds new NFC capabilities and other enhancements:
Media
Strike Founder and CEO Jack Mallers appeared on Bloomberg TV to discuss Strike’s launch in the UK.
Satoshi Energy Co-Founder and CEO joined Ten31 Managing Partner Marty Bent on the TFTC podcast to discuss the energy industry’s growing alignment with bitcoin.
StatMuse released its latest monthly Muse Letter, highlighting its major interface upgrade and more.
Market Updates
After months of consternation about the growing stickiness of price inflation and the complicated path to rate cuts, Federal Reserve Governor Michelle Bowman suggested this week that she expects no cuts this year and could even see more hikes if inflation remains elevated.
Later in the week, May’s reading for core PCE – the Fed’s favored measure for inflation – printed at +0.1% M/M and 2.6% Y/Y, in line with market expectations but still well above ostensible Fed targets and recent historical trends.
But it’s not all bad news, as new Fed research published this week suggests inflation is actually good for efficiency, building on the work of prominent labor economist Michael Scott.
Many other developed economies have continued to see entrenched inflation as well, with Canada reporting an unexpected reacceleration of its consumer price index to nearly 3% this week.
US new home sales continued to sputter in May, with the metric declining more than 11% (vs expectations for flattish growth) and marking the slowest month since November. That said, US home prices have continued to push higher despite stagnating new sales and aggressive rate hikes, as the Case-Shiller home price index printed another all-time high for the month of April.
Overseas, the closely watched USDJPY exchange rate broke through the 160 level for the first time in nearly 40 years less than two months after a $60 billion currency intervention by the Bank of Japan. Finance Minister Masato Kanda suggested he was “seriously concerned” about the move, potentially signaling more interventions still to come.
Bitcoin briefly dipped below $60,000 this week, partially driven by news that long-defunct exchange Mt Gox will finally begin paying out creditors next month, which could drive some sell pressure on the margin as the group is set to collectively receive 142,000 bitcoin (~$9 billion).
Regulatory Update
United Kingdom Prime Minister Rishi Sunak floated the idea of cutting off access to financial services for UK residents who opt out of the country’s proposed “national service” program, the latest reminder of the vulnerabilities inherent to permissioned payment networks.
US Congressman Matt Gaetz introduced a bill to allow federal income tax to be paid in bitcoin, an option we imagine would see little uptake in practice but which signals the continued growth of bitcoin’s mindshare among regulators.
Just a week after dropping its lawsuit against Ethereum development group Consensys regarding Ethereum’s status as an unregistered security, the SEC filed a new lawsuit against Consensys related to the organization’s operation of the MetaMask wallet.
The new lawsuit also alleges that popular “staking” services in the Ethereum ecosystem (which runs on a “Proof of Stake” consensus mechanism) constitute securities.
Noteworthy
Julian Assange, founder of WikiLeaks and proponent of bitcoin as far back as 2011, struck a plea deal in his protracted espionage case that allowed him to go free in Australia after more than a decade fighting US extradition attempts.
The US Supreme Court overturned a decades-old ruling that previously gave federal agencies broad authority to enact regulations without explicit Congressional approval, a decision that could have broad implications for the overall regulatory backdrop in the US.
Travel
Ten31 Tribe Event @ Bitcoin Park, July 24
Bitcoin 2024, July 25-27
BitcoinMENA, Dec 9-10