Crypto in politics, Salesforce's slump, and Elon's revenge tour

For those who attended Consensus 2024 in Austin, we hope you had a chance to swing by the Arch events! Now let’s get into the whirlwind of a week…

This Week in Crypto

Starting as usual with ETF numbers, we were looking great until yesterday (Thursday)! A big milestone was crossed as Blackrock’s IBIT AUM exceeded that of Grayscale’s GBTC. Do not fade Larry.

On the Ethereum front, Blackrock filed an updated S-1 for its Spot ETF. We’d guess that the ETFs are trading by the 4th of July (not financial advice!).

Crypto has continued to play a role in Trump and Biden’s strategies ahead of the November election. Trump attended the Libertarian Convention and pledged his support for Bitcoin and Silk Road founder Ross Ulbricht.

• Meanwhile, The Block reported the incumbent Biden administration has been reaching out to industry leaders recently.

• This follows an overall major policy shift toward crypto - however, some feel that much more is still to be done:

On the topic of the SEC and securities, Caitlyn Jenner and other celebrities have been launching meme coins on Solana. The strange debacle led many to question whether there was a coordinated hack or Jenner was a victim to deepfakes. It turned out to be real, but the token has since plummeted, perhaps unsurprisingly.

I’ll leave you with some headlines:

• Gemini Earn users will get back $2.18B of their crypto in-kind.

• Semler Scientific acquired 581 Bitcoin ($40M) for its treasury. The stock surged 37% on the announcement.

• Terra creator Terraform Labs and Do Kwon agreed in principle to settle its fraud case with the SEC.

• Paypal launched PYUSD, it’s stablecoin, on Solana.

This Week in TradFi

Right as the markets were high off Nvidia’s monster earnings, Salesforce came in and sobered everyone up with a big miss, sending the stock down more than 20%.

• Salesforce earnings came in lower than expectations and they decreased future guidance.

• They mentioned longer sales cycles and more stringent buyer budgets as a key component for the earnings miss.

• Investors are extrapolating this performance to other tech company stocks as well.

In addition to the earnings calls, the Q1 2024 GDP Data (second estimate) and preliminary corporate profits data was released. The latest data suggests the US economy is cooling down, with a lower revision of both GDP growth and consumer spending. The US consumer income, spending, and PCE deflator data is releasing today, and we’ll wait to see whether the data stays consistent in showing the economy cooling down.

In Europe, as with the rest of the world, inflation remains top of mind. Markets are penciling in a June rate cut, but the ECB has cautioned saying that they will ease gradually and take a data-driven approach to account for inflation expectations.

• Eurozone’s CPI data is releasing today, and it will be a huge input into the expected June rate key.

In the Asian markets, growth seems to be humming along for the two largest economies: China and India.

• The IMF upgraded its forecast for China’s growth this year to 5%, given the solid Q1 growth. Note China still has much to reform in its economy to continue to track towards the 5% yearly growth, but so far so good.

• India’s economy had monstrous growth. Real GDP grew 7.6% from April 2023-March 2024. India is projecting to grow another 7% from April 2024 - March 2025.

• Japan is also set to release unemployment, CPI, industrial production, and retail sales data today. It will be interesting to see how this data plays out as they’ve started to increase rates.

Aside from the barrage of economic data constantly being released, data on central bank reserves is also one to watch to understand the ability of a central bank to support their local currency. Here’s a good read on the state of central bank reserves globally.

This Week in Tech

Another huge week in AI, with a flurry of activity! Apple has supposedly chosen OpenAI as its AI partner and will be announcing it at WWDC 2024.

• This partnership is a huge win for OpenAI, as Apple was deciding between OpenAI and Google.

• Apple has mentioned that it will still likely look to ink a partnership with Google as well, so that they have more than one partnership.

• Having AI native to the iPhone operating system will be a game-changer, as intelligence will be able to summarize missed notifications, voicemails, content, and much more.

• Siri, Apple’s voice assistant, will also be getting an upgrade with AI capabilities alongside the Photos app, Voice Memo app, and others.

As consumers, we’re very excited as this will be a step-change in the capabilities of our phones. We’ll be sure to report back with the summary of WWDC 2024 once it’s occurred.

While OpenAI leads the pack in the LLM wars, Elon Musk made a big announcement this week - a $6B fundraise at a $24B valuation for xAI, an OpenAI competitor that he’s founded.

• Elon was a co-founder of OpenAI, but things went sour between him and Sam Altman and the rest of the company when OpenAI decided to switch from a non-profit into a for-profit and take investment from Microsoft.

• xAI enters an increasingly competitive LLM race with OpenAI, Anthropic, Mistril, Llama, and others.

• xAI announced it’s latest model, Grok 1.5 earlier this year. The model is trained off of data from X, another one of Musk’s companies. This data advantage may be an edge relative to the other companies. See here for a breakdown of the main reasons why an investor participated in the xAI funding. In our opinion, nothing can beat Golden Gate Claude, though!

• Additionally, xAI is also planning to build a massive computer to train the next versions of its conversational AI. While this may seem like an incredible undertaking, one thing we’ve learned time and time again is Elon always surprises!

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

• Coreweave, a cloud AI startup backed by Nvidia, is looking to become a public company next year.

• Valar Labs raised $22M to build out its AI-power cancer care prediction tool.

• Forward, a fintech startup building integrated payments to take on Stripe, raised $16M.

• Transcend, a data privacy platform, raised a $40M Series B from Stepstone Group, Accel, Index Ventures, and more.

Arch is building a 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.