Ten31 Timestamp 914,493
It was, to say the least, a somber week for the US. We’ll leave the political and psychosocial commentary to other venues, but we can’t help but think that the swelling undercurrent of unrest on display this week highlights, among many other things, the danger inherent in a “K-shaped” economy where younger generations increasingly feel their parents’ standard of living slipping away, all while an increasingly concentrated base of existing asset owners watch their equity portfolios and Zillow valuations continue to soar. This dynamic was ironically and sadly thrown into stark relief this week by the release of massive downward revisions to recent employment estimates and stubbornly high consumer inflation, all alongside stock indices pumping to new all-time highs (complete with Larry Ellison making $110 billion overnight) as the Fed tees up a resumption of rate cuts next week. Distributed, censorship-resistant technologies like bitcoin and Nostr are merely tools and are far from the only solutions to the underlying malaise infecting much of the population, but we believe and hope they can serve as both a foundation for a more honest and sustainable financial system, as well as a powerful check on those who would seek to express their dissatisfaction by replacing free and open speech with the veto of violence.
Portfolio Company Spotlight
Zaprite is a bitcoin-native payments gateway and invoicing platform providing sleek solutions for checkouts and payments flows denominated in both bitcoin and fiat. Zaprite’s software tools allow for seamless payments experiences for end users while providing critical reporting and accounting infrastructure to merchants using the platform. The company offers a growing suite of invoicing and checkout flows; integrations with Strike, Coinkite, Unchained, IBEX, and many other bitcoin-native providers; as well as popular fiat-native payment options including Stripe, PayPal, WooCommerce, and more.
As the world’s largest investor focused entirely on bitcoin, Ten31 has deployed $200 million across two funds into more than 30 of the most promising and innovative companies in the ecosystem, and we expect 2025 to be the best year yet for both bitcoin and our portfolio. Visit ten31.xyz/invest to learn more and get in touch to discuss participating.
Selected Portfolio News
Strike launched a new integration with Bitkey, Block’s popular hardware wallet:
Strike also eliminated fees on its “pay me in bitcoin” direct deposit feature:
Zaprite rolled out a new Event Tickets product offering an integrated and smooth ticketing flow:
Zaprite also announced a new integration with Coinkite’s Coldcard hardware wallets:
Media
Ten31 Managing Partner Marty Bent joined the Coffee and a Mike podcast to discuss the underlying economic malaise not captured by many macro aggregates.
Market Updates
The rate-cut narrative was firmly preserved this week, as closely-watched inflation updates were either soft or in line with expectations. The Producer Price Index was well below consensus, declining 0.1% M/M in August (though key energy input costs are clearly making a move higher).
Meanwhile, CPI was as expected, though the metric is still pushing 3% with many key categories of basic goods printing double-digit annual price growth.
On the labor front, the latest annual revision to non-farm payrolls through March 2025 showed the largest absolute downward revision on record, surpassing both last year’s similarly massive decline and the previous record set during the depths of the last major US recession.
Equity indices, however, were up all week on the softer data, with both the S&P500 and Nasdaq closing the week at all-time highs – just in time for the Fed to cut rates at next week’s FOMC meeting!
Investors are now pricing in a 25bps cut this coming week with near certainty (as well as an outside chance of a 50bps cut), while longer term forecasts suggest roughly 6 more cuts over the coming year.
On the geopolitical front, reports this week suggested the Pentagon is increasingly advocating for the US to focus exclusively on its sphere of influence in the Western hemisphere, the latest signpost signaling a potential ongoing “decoupling” between the East and West.
That idea was further validated this week by President Trump putting pressure on the EU to levy 100% tariffs on China and India in retaliation for their interactions with Russia. European Commission President Ursula von der Leyen acknowledged in response that “battle lines are being drawn” for a reshaping of global trade and diplomacy.
China, for its part, proposed new rule changes to better facilitate gold imports and exports as it continues to diversify away from USD rails and reserves on the margin, even while it grapples with plans to potentially bail out highly indebted local governments to the tune of more than $1 trillion.
To the extent the US is indeed attempting a forced decoupling, that agenda may soon face a challenge in the Supreme Court, where the legality of the President’s justification for tariffs as an “emergency” measure will soon be evaluated. Treasury Secretary Scott Bessent suggested this week that the federal government would be liable for as much as $1 trillion in refunds to importers if the Court overturns the tariffs.
Elsewhere in Trump’s many judicial entanglements, a federal judge blocked the Trump administration from firing Fed Governor Lisa Cook over accusations of mortgage fraud. Of note, Reuters unearthed a document this week that seems to challenge the administration’s allegations against Cook.
More positively for the administration’s attempt to gain more influence over the Fed, the Senate Banking Committee advanced Stephen Miran’s nomination to the Fed’s Board of Governors. Miran is now one vote away from filling the Board’s vacant seat.
Commerce Secretary Howard Lutnick indicated the long-anticipated IPO of Fannie Mae and Freddie Mac will happen “sooner than people think” and potentially as early as later this year. As discussed previously in this newsletter, this IPO would be a significant and interesting source of “budget-neutral” funding for the federal government.
Regulatory Update
The US Senate’s latest “crypto market structure bill” includes even more forceful protections for non-custodial software developers than had been initially proposed in the Blockchain Regulatory Certainty Act. The latest version of the bill would retroactively amend existing laws to explicitly include a “control” requirement in the definition of money transmission.
However, much more dystopically, the Treasury Department’s FinCEN Chairman indicated this week that the organization is working on new rules to expand the Patriot Act to further infringe on financial privacy, not only by cracking down on “mixer” services but labeling many elementary and innocuous bitcoin best practices (even single-use addresses) as “primary money laundering concerns.”
An Iowa Congressman called for a federal investigation into potential national security risks posed by Bitmain, the world’s largest producer of bitcoin mining ASICs.
The latest Congressional appropriations bill formally directs the US Treasury to submit a report on the mechanics of a strategic bitcoin reserve within the next 90 days.
Meanwhile, Patrick Witt, the Trump administration’s new digital assets advisor, reiterated that establishing a strategic bitcoin reserve remains a top priority for the White House.
Noteworthy
The moving average of bitcoin’s total network hashrate crossed firmly above 1 zetahash this week, an all-time high equivalent to one sextillion hashes per second.
A major vulnerability to NPM, a highly popular and widely deployed JavaScript tool, was subject to a major vulnerability this week that exposed a wide variety of internet-connected crypto wallets to address poisoning attacks, highlighting again the benefits of bitcoin security tools like offline hardware wallets and multi-signature quorums.
Bitchat (a new communications app introduced by Jack Dorsey that employs both bluetooth mesh networks and Nostr) was heavily leveraged in uprisings against the incumbent government of Nepal this week.
Cantor Fitzgerald announced a new investment vehicle combining elements of both gold and bitcoin’s performance.
Stablecoin giant Tether announced USA₮, a GENIUS-compliant version of its leading stablecoin for use in regulated US markets.
Travel
Bitcoin Park Custody & Treasury Summit, Sep 17-18
Bitcoin Park Imagine IF Summit, Sep 19-20
Portfolio Company Retreat, early October