Ten31 Timestamp 858,256
The upside-down world of traditional finance continued to operate on its normal course this week, as the pronouncements of a few technocrats at a luxury retreat drove a return to borderline all-time highs in equity indices even as historical employment numbers were revised downward substantially and housing continued to struggle. Federal Reserve Chairman Jerome Powell stated unambiguously that “the time has come” for a shift in monetary policy due to a clearly cooling labor market, a statement investors read as the all-clear for monetary loosening – which may or may not be a bullish near-term indicator for asset prices. Regardless, consensus has clearly shifted back toward the expectation of a goldilocks landing, with equity market volatility compressing at the fastest rate in history just a couple weeks after one of the most severe implosions in recent memory. As the banking cabal was convening in Wyoming, the Ten31 team spent the week on its own, much higher-signal trip to Riga for the Nostriga and Baltic Honeybadger conferences, where we and our portfolio companies led various panels on the rapid development of the Nostr and bitcoin ecosystems, many of which can be found linked below. As global central banks struggle to deal with the unwinding of the latest long-term debt cycle, it remains clear to us that the tools for a better system are being built at an encouraging and accelerating pace.
Portfolio Company Spotlight
Primal is a first of its kind application for the Nostr protocol that combines a client, caching service, analytics tools, and more to address several unmet needs in the nascent Nostr ecosystem. Through the combination of its sleek client application and its caching service (built on a completely open source stack), Primal seeks to offer an end-user experience as smooth and easy as that of legacy social media platforms like Twitter and eventually many other applications, unlocking the vast potential of Nostr for the next billion people. Primal also offers an integrated wallet (powered by Strike BLACK) that substantially reduces onboarding and UX frictions for both Nostr and the lightning network.
Selected Portfolio News
Unchained launched new self-service options to streamline new users’ onboarding experience:
Zaprite added support for recurring invoices:
Media
Fold Founder and CEO Will Reeves appeared on What Bitcoin Did and The Investor’s Podcast to discuss Fold’s evolution and roadmap as the company prepares to go public.
Will also joined Ten31 Managing Partner Jonathan Kirkwood and Battery Finance CEO Andrew Hohns for a discussion at Bitcoin Park during last month’s Bitcoin 2024 conference.
Ten31 Managing Partner Matt Odell hosted a discussion with Twitter and Block founder Jack Dorsey at the Nostriga conference.
Matt also joined Ten31 Managing Partner Marty Bent for a discussion on funding Nostr projects and developers.
Strike founder Jack Mallers and Primal founder Miljan Braticevic led a panel at Nostriga on building bitcoin tools for the Nostr ecosystem.
Miljan also gave a presentation on openness as Nostr’s killer feature at the conference.
GRIID CSO and Ten31 Advisor Harry Sudock joined the What Bitcoin Did podcast to discuss the latest in the bitcoin mining landscape.
Ten31 Principal John Arnold published a new piece delving into bitcoin’s performance as Ten31’s hurdle rate.
AnchorWatch Co-Founder and CEO Rob Hamilton appeared on the Bitcoin Review podcast to discuss recent bitcoin security updates.
Hoseki Founder and CEO Sam Abbassi gave a talk at the Bitcoin 2024 conference on the importance of proof of reserves.
Market Updates
In what has become something of a formality, the Bureau of Labor Statistics revised down historical nonfarm payrolls data again this week, this time reporting that the US added 818,000 fewer jobs than initially reported for the 12 months through March 2024, the largest downward revision since 2009.
Right on cue, the minutes from the last Federal Reserve meeting in late July suggested most participants now expect an easing of monetary policy at the central bank’s September meeting.
Hotly anticipated remarks from Fed Chairman Jerome Powell at the group’s annual Jackson Hole retreat confirmed as much, as the world’s most powerful lawyer noted that “the time has come for policy to adjust.”
Powell was particularly unambiguous about the labor market cooling the Fed is seeing, noting that the backdrop is now worse than pre-COVID.
Despite the poor signals on the underlying economy, markets broadly rallied on confirmation of near-term cuts, with the S&P500 closing Friday just below all-time highs (having bounced nearly 10% just two weeks after early August’s Japan-induced meltdown) and the US 10-year Treasury yield pushing against multi-year lows.
Also at the retreat, Chicago Fed President Austan Goolsbee made the encouraging comment that the normal rules of monetary policy transmission “maybe don’t apply exactly right now.”
After sequentially declining for almost every month this year, US existing home sales rose slightly M/M in July, though this figure was below consensus and still good for the metric’s 35th consecutive Y/Y decline, the longest such streak since 2009.
Despite a flagging sales backdrop, the share of US homes valued at more than $1 million reached a new all-time high last month and is nearing 10%.
Regulatory Update
The US Treasury Department formally withdrew a proposed rule from 2020 that would have mandated strict (and likely unenforceable) Know Your Customer requirements for “unhosted” cryptocurrency wallets.
Elsewhere, the Treasury and Federal Reserve indicated this week that they would seek to clarify the legal meaning of “money” to shore up application of the Bank Secrecy Act to transactions involving convertible virtual currencies.
Democratic Presidential candidate Kamala Harris confirmed this week that she supports President Biden’s latest proposed budget, which would look to levy a tax on unrealized capital gains for households with net worth exceeding $100 million. No word yet on whether Vice President Harris will also support cash payouts for unrealized capital losses.
Meanwhile, Vice President Harris’s campaign unsurprisingly excluded any mention of bitcoin from its platform (in contrast to President Trump’s platform released several weeks ago).
Noteworthy
The CEO of Texas’s ERCOT grid system appeared on CNBC to discuss the rapid growth of bitcoin mining and HPC compute loads within the state.
OpenSats announced a new long-term support grant for prolific Nostr developer Vitor Pamplona.
The bitcoin network surpassed 94% issuance of bitcoin’s total supply this week. Less than 1.3 million new bitcoin remain to be issued through 2140.
Travel
Austin BitDevs, Sep 19
BitcoinMENA, Dec 9-10