Ten31 Timestamp 853,048
What was almost a very dark week for American politics instead finished with a major US political party officially nominating an explicitly pro-bitcoin Presidential candidate for the first time in history. Meanwhile, that same candidate selected an established bitcoin holder and supporter as his running mate, further bolstering the ticket’s potential tailwinds for the bitcoin ecosystem. At Ten31, we hold no views on any particular candidate, and we initially became interested in bitcoin partially because we recognized that the politicians and regulators that created one financial crisis after another and an ongoing fiscal catastrophe will not save us. However, the events of the last few weeks are still extremely noteworthy in what they indicate about the shifting tectonic plates beneath the nascent bitcoin industry – just a few years ago, the bitcoin network was a triviality at best and a threat at worst in the eyes of most politicians hungry for votes and power. Today, it is a headline-making voting issue commanding the attention and loyalty of candidates for the world’s most powerful office and the billionaire financiers backing them. Whether campaign promises are being made in good faith and will translate to real action is unclear – and ultimately the endorsement of any particular politician or nation is unnecessary for bitcoin’s continued growth – but this diametric shift within a single election cycle is evidence that political incentives are playing out in the ways many bitcoiners have long expected. As Coinkite Co-Founder NVK recently put it, the pandering is the whole point, and we expect we’ll see more of it, particularly as the bitcoin network continues to produce blocks every ~10 minutes even while multinational cybersecurity infrastructure and centralized payment rails sputter.
Portfolio Company Spotlight
Mempool.space is the leading explorer and analytics platform for the bitcoin ecosystem. The platform provides extensive data and tools for real-time analysis of the multi-layer bitcoin network, including granular information on the bitcoin blockchain, the lightning network, and a mining dashboard, all presented in an intuitive and sleek UI. The site allows users to easily estimate forecasted transaction fees, drill into in-depth data on both historical and forecasted blocks, explore the liquidity and connectivity of nodes across the lightning network, and much more. Users can either query data directly through the mempool.space site or choose to self-host an instance of the project on their own hardware to eliminate third-party dependencies. In addition, mempool.space has recently launched a Mining Accelerator product to help users more easily and predictably manage bitcoin’s volatile blockspace fee market, a capability that will become increasingly important as transaction fees push higher.
Selected Portfolio News
Satoshi Energy announced two definitive agreements for 327 MW of new data center capacity, brining the company’s total contracted capacity to nearly 500 MW:
Fold published a preview of upcoming upgrades to its rewards program, including in-app bill pay capabilities allowing users to reliably earn rewards on all bill payments:
Strike announced new fee tiers for US customers:
Zaprite launched a new integration with PayPal:
Media
Ten31 portfolio companies Start9, Coinkite, and Zaprite were featured in a Forbes article highlighting startups operating on a bitcoin standard.
Managing Partner Marty Bent appeared on the Medium Energy podcast to discuss bitcoin and its relationship to energy from first principles.
Market Updates
Other than the near-assassination of the frontrunner for the most powerful office in the world, the biggest headlines this week came in the realm of IT, as cybersecurity giant Crowdstrike pushed a software update that led to widespread computer crashes at banks, hospitals, airports, and more in what has been dubbed the largest IT outage in history.
Meanwhile, the Bank of England’s CHAPS system – similar to the US’s Fedwire settlement system – experienced an extended outage that led to delays in high value interbank transfers.
After months of essentially up-only price action, equity indices saw more volatility this week, as the S&P closed down a whopping 3% from its all-time highs, even as bitcoin dramatically reversed its recent selloff to close the week up nearly 20%.
In line with more dovish recent rates commentary from Federal Reserve Chairman Jerome Powell, more Fed governors indicated comfort with rate cuts in the near term this week.
As the Fed inches toward long-awaited rate cuts, the Wall Street Journal ran a piece this week on the slow-motion meltdown of US commercial real estate, in this case focusing on a large pocket of the market where defaults have nearly tripled over the past two years.
At the same time, new data out this week showed auto repossessions have increased 23% so far this year and are now up 14% vs 2019 levels.
Amid a sustained rebound in spot bitcoin ETF flows, BlackRock’s Larry Fink – an ardent skeptic of bitcoin just a couple years ago – once again took to the airwaves to extol bitcoin’s virtues, including its role as a permissionless asset outside of the traditional financial system and its protective value against fiat currency debasement.
Regulatory Update
Republican Presidential nominee Donald Trump named Senator JD Vance – a confirmed bitcoin holder – as his running mate this week. The selection represents the Trump campaign’s latest pro-bitcoin move, as Vance has frequently spoken out in favor of bitcoin and in opposition to federal overreach against bitcoin holders.
President Trump also made more positive comments on bitcoin this week, including a reference to JP Morgan CEO and longtime bitcoin critic Jamie Dimon having recently “changed his tune” on the asset (though it’s unclear exactly what this means and Dimon has not yet made any public comment to that effect).
A New York judge granted Roman Storm’s request to delay his criminal trial related to his involvement in the Tornado Cash project. Meanwhile, fellow Tornado Cash defendant Alexey Pertsev saw his request for bail denied by a Dutch court.
Switzerland passed a new law requiring the use of open source software within all government bodies.
Noteworthy
An introductory piece on Nostr and how to interact with it was featured in Forbes this week.
OpenSats announced its fifth wave of grants for projects focused on the Nostr ecosystem.
Large exchange Kraken told users it has started to receive bitcoin distributions from the trustee of the Mt Gox bankruptcy proceeding and expects payouts to be made in the next 1-2 weeks.
Travel
Ten31 Tribe Event @ Bitcoin Park, July 24
Bitcoin 2024, July 25-27
BitcoinMENA, Dec 9-10