Ten31 Timestamp 869,572
It was an undeniably monumental week for bitcoin, as the election of former President Donald Trump – whose campaign rhetoric, policy platform, and close advisors have all been decidedly pro-bitcoin – sent the price to a new all-time high of ~$77,000. Most notably, the President-elect has championed the notion of the US building a “strategic bitcoin reserve,” and various reports point to his cabinet selections leaning heavily in favor of bitcoin, which would represent a marked departure from the adversarial stance taken by the previous administration. We stress that it remains very early and politicians have a long track record of disappointing their constituents, so no bitcoin holder, company, or advocate should count any chickens just yet. However, the fact that bitcoin has gone from an irrelevant curiosity to a key voting issue and geopolitical talking point in the span of just a few years is remarkable and should not be understated. The mainstreaming of the apex predator of money appears to be proceeding more quickly than even many of bitcoin’s most vociferous believers expected, and this trend should have substantial positive consequences for the bitcoin ecosystem to the extent it proves durable. It is incumbent upon all bitcoin advocates and organizations to maintain vigilance and ensure that any legislation passed by the incoming administration and Congress appropriately respects citizens’ inalienable property rights, but the current trends for this nascent ecosystem look resoundingly positive after this week.
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
Strike launched a new auto-withdrawals feature:
Media
Ten31 managing Partner Marty Bent appeared on the Bitcoin Frontier podcast to discuss the recent ECB research paper on bitcoin, Ten31’s strategy, and more.
Ten31 Principal John Arnold published a brief summary of potential tailwinds to the bitcoin ecosystem from this week’s election results. The Ten31 team also discussed this topic in depth on the latest episode Bitcoin Alpha.
Fold CEO Will Reeves and Marketing Lead Brian Harrington discussed how they use Fold to maximize their bitcoin exposure.
Market Updates
Former President Donald Trump won the 2024 US Presidential election by a substantial margin, joining Grover Cleveland as the only US President in history to win a second, nonconsecutive term.
Trump’s victory was paired with a “Red Wave” sweep of Congress as the Republican Party looks set to take control of both the House and Senate, potentially reducing friction for Trump’s policy agenda (for better or worse).
Markets generally responded with resounding optimism to this week’s election outcomes, as the S&P500 finished the week up 5% and hit the 6,000 level for the first time.
The 10 year US Treasury yield spiked dramatically on the news, touching 4.5% for the first time in months as investors grappled with likely increases in deficit spending and potentially incremental inflation. The benchmark yield settled back at pre-election levels to close out the week.
Despite markets rallying to all-time highs once again, the Federal Reserve’s latest FOMC meeting delivered another 25bps cut to the Federal Funds rate, as expected. Unlike the prior meeting’s results, the vote for a cut was unanimous this time around.
Federal Reserve Chairman Jerome Powell dismissed the notion that President-elect Trump might attempt to remove him from his seat, arguing that this would not be legal and would violate central bank independence.
The Bank of England moved in lockstep with the Fed’s decision, cutting its own policy rate by 25bps but raising its inflation forecast and leaving open the possibility of slower cuts from here.
Meanwhile, the USDJPY exchange rate, which had climbed substantially through October, gapped higher on the US election news. The closely-watched currency has now largely round-tripped the dramatic strengthening that set off August’s violent unwind of the yen carry trade.
Bitcoin extended its recent run all week, including a spike on election night that culminated in a new all-time high of ~$77,000 on Friday.
Spot bitcoin ETFs also extended their remarkable run since launching in January, as the vehicles took in nearly $1.4 billion on Thursday alone, their largest inflow day since inception.
Bitcoin network hashrate continued its parabolic move as well, pushing close to 800 EH/s as mining difficulty reached a new all-time high of over 100 trillion.
Regulatory Update
Wyoming Senator Cynthia Lummis reiterated her call for a strategic bitcoin reserve, a proposal she initially introduced at the Bitcoin 2024 Conference in July. The full text of the proposed bill can be found here.
The Bitcoin Policy Institute published a detailed research paper on the rationale for and potential objections to the US putting this plan into action.
Early reports have suggested President-elect Trump’s cabinet appointees are likely to be less hostile toward (and in many cases proactive advocates of) bitcoin. Noteworthy examples include potential Treasury Secretary nominee Scott Bessent, who has spoken favorably of bitcoin in the past, and Tennessee Senator Bill Hagerty, a possible Secretary of State nominee who has made several appearances at Nashville’s Bitcoin Park.
Senator Sherrod Brown, a longtime occupant of Washington and one of the most aggressive opponents of bitcoin and “crypto” more generally, lost his Senate seat this week due partially to a large fundraising push by a pro-bitcoin PAC.
On a more discouraging note, Roman Sterlingov, allegedly the operator of the Bitcoin Fog mixing service, was sentenced this week to 12.5 years in prison.
Noteworthy
UK pension advisor Cartwright announced the first UK pension fund has allocated 3% of its $65 million asset base to bitcoin.
The New York Federal Reserve published a paper calling out the growth of “extend and pretend” measures in the US commercial real estate market, noting in particular the risk of an expanding maturity wall set to expire over the next several years:
Institutional investment advisor Canterbury Consulting – which advises clients with assets of ~$45 billion – published a detailed primer on bitcoin and its role in a diversified portfolio.
Deutsche Telekom, Europe’s largest telecommunications provider and parent company of T-Mobile, announced the launch of a bitcoin mining pilot project as part of a grid balancing strategy in Germany.
The Chairman of Rockefeller International published an op-ed in the Financial Times arguing that the recent US economic boom is largely a mirage that has not benefited the majority of Americans.
Tad Smith, the former CEO of prominent auction platform Sotheby’s, advocated for bitcoin’s unique properties as a store of value in a recent interview.
Block, the bitcoin-adjacent parent company of Cash App and Square, reported that it will increase focus on its bitcoin mining and Bitkey products while shutting down TBD, its division focused on decentralized web applications.
Travel
SatsConf, Nov 8-9
Austin BitDevs, Nov 21
BitcoinMENA, Dec 9-10