All-time highs, China's decline, and Anthropic's latest model

Everything is up ... again

Author

Freddy Mann
March 08, 2024

For a brief few moments this week, every Bitcoin buy ever was in profit…

This Week in Crypto

Celebrations of a new ATH were short-lived this week as Bitcoin sold off almost immediately by 15%, clearing out a significant amount of built-up leverage and open interest. I’m not going to rewrite this on Friday morning when you are reading this, so don’t blame me if there’s already a new ATH by then!

Taking a glance at the ETF flows, the main highlight this week was a whopping $788M record daily inflow for $IBIT.

  • Saylor filed a senior note offering for $600M to fund yet more Bitcoin purchases. That’s looking like rookie numbers now, isn’t it?

  • Another astounding stat - the total AUM of Bitcoin ETFs has surpassed $50B, which is well over half the AUM of all Gold ETFs combined, $91B.

Bitmex Research

Few things make me more bullish than seeing men in thobes walk around El Salvador with Nayib Bukele … are the Saudis finally coming for our bags?

  • Seems like a pertinent place to link one of our favorite Bitcoin authors, Allen Farrington, and his essay Bitcoin is Halal. This is one part of his series of essays later turned into the book Bitcoin is Venice. A fair warning, the full book is very difficult, but the juice is worth the squeeze.

I wonder what they could possibly be talking about?

Elsewhere, well, everything is up. A lot. And the biggest winners were dog coins. FLOKI (+165%), PEPE (+162%), SHIB (+152%), WIF (+112%). $RBN (+98%) caught a bid ahead of the $AEVO airdrop and launch next week, for which there will be a 1:1 conversion.

We’ll finish up with a sprinkling of news:

  • BlockFi has reached a settlement with FTX.

  • It’s airdrop season:

    • SAGA announced an airdrop to TIA and ATOM stakers, amongst others.

    • Check your eligibility for the Wormhole airdrop here - many users are confused about the methodology here and awaiting clarity. Also if you bridged, remember to check both the ETH and SOL sides for airdrop qualification.

    • Kamino has announced an airdrop in April.

  • An interesting milestone was reached on Ethereum, where the re-staking protocol Eigenlayer flipped AAVE in TVL.

  • The Arizona Senate passed a resolution to consider adding Bitcoin ETF to state retirement portfolios.

This Week in TradFi

Not much new data came in on the U.S. economy this week, but all eyes will be on Friday’s (3/8) non-farm payroll numbers. U.S. equities had an impressive rally to achieve fresh record-highs this week.

In the UK, the last budget before the election came in line with expectations, with the main tax cut coming in the form of another 2% off National Insurance contributions. Not that it will do anything to stop Labour winning the next election.

In Europe, the ECB kept rates unchanged at 4.0%. However, the central bank did reduce growth expectations for the Eurozone’s GDP for 2024 to 0.6% from its previous estimate of 0.8%.

  • They also revised the inflation rate forecast to 2.3% from its previous estimate of 2.7%, which suggests rate cuts may be in the works.

In China, President Xi set out his economic plan with an ambitious target of 5% growth for 2024. He vowed to tackle the property crisis, persistent deflation, weak consumer demand, and high local indebtedness. Included in his plan is:

  • A target budget deficit of 3% of GDP.

  • 7.2% increase in the military budget.

  • $140B in ultra-long special government bonds to provide additional economic support.

China’s trade stats showed some early promise with a big rebound in exports (+7.1% YoY) and imports (+3.5% YoY) - well ahead of the Jan-Feb period's expectations. Nevertheless, 2024's growth target is a challenging target and unlikely to be achieved given the weak consumer environment, high real rates, and slowing external growth. Despite the upbeat narrative, the immediate reaction of the markets was a thumbs down; the Hang Seng Index dropped 2.6%. We are inclined to think that policy isn't anywhere near loose enough: the country's boom is over.

This Week in Tech

Most of the AI conversations have been centered around OpenAI - I mean it’s hard to stay out of the news when the company had such an unprecedented, meteoric ascent, alongside comical corporate governance disputes such as:

However, the competition within LLMs has been heating up, with many well-funded and noteworthy competitors. One competitor specifically, Anthropic, announced their latest model this week: Claude 3. Anthropic has also had a meteoric ascent:

  • Anthropic was founded by former OpenAI members and siblings, Dario and Daniela Amodei.

  • They’ve raised over $7B in the last year alone from an elite set of investors. In fact, Anthropic has done so well that it may make the FTX creditors whole, given FTX is currently selling its 7.84% stake in Anthropic as part of the bankruptcy process, delivering a whopping return.

Claude 3 is made up of three models: Opus, Sonnet, and Haiku. Anthropic claims that its most capable model, Opus, beat other industry-leading AI models, OpenAI’s GPT-4 and Google’s “woke” Gemini 1.0 Ultra in common tests used to determine an AI’s capabilities. While it still is too early to tell how this all plays out, it’ll be interesting to see which companies end up gaining the edge in the LLM war.

As usual, below are some fundraising announcements, M&A, and tech personnel changes that caught our eye:

Attention London based readers!

The Arch team will be in London 17th-20th and will be hosting a private drinks event in the Mayfair area.

Reply to RSVP!

Arch is building next-gen wealth management platform for individuals holding alternative assets. Our flagship product is the crypto-backed loan, which allows you to securely and affordably borrow against your crypto. We also offer access to bank-grade custody, trading, and staking services, powered by BitGo.

Disclaimer: None of the above is financial advice, seriously.