Ten31 Timestamp 870,579
Bitcoin continued to shine this week, punching through the $90,000 level for the first time on its way to a new all time high above $93,000. The orange coin has now established a market cap exceeding all but six other assets on the planet and officially flipped silver this week, surpassing the precious metal with a multi-millennia history after only 16 years in operation. In line with Ten31’s long-held thesis, bitcoin has left not just traditional asset classes but also would-be cryptocurrency competitors in the dust, and we expect this trend to continue as more massive institutions and high-net worth buyers pile into bitcoin exposure and governments trend toward embracing rather than attacking it. On the latter point, this week showed further evidence that the incoming US administration is likely to be at least ambivalent and potentially actively promotional toward the bitcoin ecosystem, as a litany of President-elect Trump’s cabinet appointments have a public history of either owning bitcoin or viewing it positively. While legacy markets were somewhat jittery this week on less dovish commentary out of various Fed officials and this dynamic may lead to some near-term price gyration in all assets, the fundamental setup for bitcoin and the companies building on it going into 2025 continues to look better than at any prior point in the nascent network’s history.
Portfolio Company Spotlight
OpenSecret – formerly known as Mutiny – offers a suite of security tools to provide private encryption by default to protect both end users and app developers. The company’s platform offers solutions for private key management, encrypted data syncing, confidential compute, and private AI applications that will all become increasingly necessary as the volume of data shared between users and their applications grows and the resulting cost of data breaches – which already drive losses of ~$15 billion per year – continues to increase.
Selected Portfolio News
Strike launched its referral program for markets outside the US and EU:
Strike also added support for two-factor authentication:
Fold now allows users to easily send gift cards:
Mutiny announced a rebrand as OpenSecret and a shift in focus to providing tools for app developers to easily integrate encryption and privacy protections by default:
Media
Ten31 Managing Partner Matt Odell joined a conversation with Edinburgh-based coworking space Bitcoin Works to discuss venture investing in bitcoin.
Coinkite Co-Founder NVK appeared on the Investor’s Podcast to dig into the latest in hardware, bitcoin security and more.
Unchained Co-Founder Joe Kelly discussed his experience building Unchained and the company’s roadmap on the Bitcoin Frontier podcast.
Unchained VP of Enterprise Sales Trey Sellers joined the Bitcoin for Millennials show to discuss how bitcoin fits into the FIRE framework.
River published a report on the emerging “dual money era” wherein bitcoin and the US dollar will coexist and serve different roles for some period of time.
Market Updates
Bitcoin maintained its post-election momentum this week, jumping up to another new all-time high of ~$93,500 before closing the week just below that level.
With a total value of just over $1.8 trillion, bitcoin has now overtaken silver and Saudi Aramco to become the world’s seventh largest asset by market cap just 16 years since its inception.
Spot bitcoin ETF inflows continued to blow the doors off as well, as BlackRock’s IBIT took in over $2 billion on the week, helping to push the vehicle to $40 billion in AUM just two weeks after hitting $30 billion.
Institutional investors appear to be boosting allocations to bitcoin ETFs, as the latest 13F filings showed a new $92 million IBIT position at BlackRock and over $700 million of total exposure at Goldman Sachs.
The CFTC issued new guidance that should further clear the path for spot bitcoin ETF options, which were approved by the SEC last month.
On the macro front, CPI for October came in at +2.6% Y/Y, in line with expectations but a slight uptick vs last month’s number, while Core CPI remained comfortably north of 3%. Both figures appear to have moderated or reversed recent downtrends.
After cutting the benchmark Fed Funds Rate by another 25bps last week, Federal Reserve Chairman Jerome Powell suggested this week that the central bank is “not in a hurry” to lower rates further.
Boston Fed President Susan Collins also indicated another rate cut in December is “not a done deal,” and a speech by Dallas Fed President Lorie Logan posited that the “neutral rate” may be higher than market consensus and possibly close to where the Fed Funds Rate is today. The overall tenor of this commentary pressured equity indices in the back half of the week.
But even with some incremental jitters in the stock market, the S&P500’s CAPE ratio – a modified P/E ratio which measures price divided by a 10-year moving average of inflation-adjusted earnings – reached 2021 levels this week, good for its second-highest reading in 100 years.
The 10-year US Treasury yield pushed back toward multi-month highs this week, though the rate has not yet broken the 4.5% level even as the market digests President-elect Trump’s policy and spending agenda.
Regulatory Update
It was a busy week for regulatory headlines favorable toward bitcoin, as the incoming Trump administration named a variety of cabinet appointees with a history of either bitcoin ownership or public advocacy.
Most notably, Trump’s nominees for Attorney General, Secretary of Defense, Director of National Intelligence, and special envoy to the Middle East have documented positive historical associations with bitcoin.
Meanwhile, Scott Bessent and Howard Lutnick – two notably pro-bitcoin public figures – lead Polymarket’s odds to lead the Treasury Department (albeit on low volume).
Senator Cynthia Lummis continued to publicly advocate for a Strategic Bitcoin Reserve in a new interview with Bloomberg.
At the local level, Pennsylvania became the first state to consider its own bitcoin strategic reserve, with state representative Mike Cabell introducing a bill to the House that would direct up to 10% of the state’s reserves to bitcoin.
Eighteen states filed suit against the SEC and its Chairman Gary Gensler this week, alleging the agency has engaged in regulatory overreach in its treatment of the digital assets industry.
The same day, Gensler published a somewhat cryptic letter that seemed to hint at his impending resignation.
Elsewhere, Italy walked back its proposal to significantly increase its capital gains tax on bitcoin and other cryptocurrencies.
Noteworthy
The Bitcoin Policy Institute published a paper surveying the legal mechanisms by which the federal government could institute a strategic bitcoin reserve.
A Managing Partner at R360, a “community for centi-milionaires,” took to CNBC this week to promote the firm’s bullish view on bitcoin. Notably, she indicated they recommend their extremely wealthy clients hold bitcoin directly rather than through an ETF.
The European Central Bank quietly made some noteworthy revisions to its research paper last month that argued in favor of laws to hinder bitcoin adoption.
Tether launched its Wallet Development Kit, an open-source toolkit allowing developers to create self-custodial wallets supporting bitcoin and USDT.
Travel
Austin BitDevs, Nov 21
Nashville BitDevs, Dec 10
BitcoinMENA, Dec 9-10