Nashville baby, Market Tumbles, and Tech Drama

Super grateful to all the readers who came to say Hi yesterday in Nashville! Hope to see more of you there today and tomorrow!

This Week in Crypto

There’s a lot to cover this week!

Firstly, there are now two sets of ETF flows to report on, following the launch (finally) of the ETF this week. Long-time readers will recall the BTC and ETH ETFs going live was one of our predictions for 2024 in January. Here are the numbers, going forward, we will likely only include the more interesting of the two, for brevities sake.

Bitcoin posted two monster days last Friday and this Monday, perhaps in response to rumors Trump is to announce plans for a strategic Bitcoin reserve in Nashville.

Meanwhile, ETH enjoyed a heavy volume on opening day, but the price has not performed as emphatically. Not to fear for those who have heavy ETH bags though, as a similar story played out for Bitcoin previously:

Apologies for the link-heavy edition, however, Bitcoin Nashville is in full swing. RFK had some interesting comments on his Bitcoin position (why Mike Majlak is sitting next to him, I do not know), and the rest of the conference is hotly anticipating a Trump speech later today.

• Imagine telling the 2012 version of yourself that Donald Trump was running for his second Presidential term and promising to use taxpayer money/printed money (they’re the same thing) to buy Bitcoin. Imagine being bearish. Imagine selling.

Oh, and just to top it off, mass adoption continues:

I’d say the rest of the year looks pretty bullish! Expecting many more announcements to come out of Nashville, we’ll have a proper round-up next week, so stay tuned!

This Week in TradFi

The tech sector-led equity market rout and Biden standing down for re-election fought for top billing. They both of course matter for markets given the contagion impact of stock market weakness on almost all other asset classes.

• We saw a material pullback across the board with Tesla recording its largest one-day loss (over 12%) since 2020.

• Alphabet Q2 earnings also disappointed.

• Ford tumbled 17% intra-day while GM and Stellantis also toiled on the back of industrywide disappointing earnings and much uncertainty relating mainly to EV models (subsidies, profitability, sales targets, and the like).

On the data front, we had to wait until Thursday for anything meaningful.

• We got that with a 2.8% annualized GDP growth rate in the second quarter against expectations of 2%. 

• That's double the rate recorded in Q1 (1.4%). Consumer spending ratcheted higher to 2.3% in Q2 from a rate of 1.5% in Q1.

• That was enough to help markets recover some of the massive losses from Wednesday's session where the Nasdaq saw its largest one-day reversal since 2022.

The Chinese were busy cutting key rates again - by 20bp on the one-year loan rate - having cut the short-term rate earlier in the week.

• The cuts were in excess of what the PBOC usually does and were made on a day other than the 15th of the month. Car trading subsidies were also announced. Trouble in China?

• Most likely now publicly being recognized (on the back of the epic property bust and shattering in consumer confidence), with the spate of stimulus measures - and especially following an underwhelming market response to the Third Plenum.

This Week in Tech

Right off the heels of OpenAI’s announcement last week, Meta launched the best open-source models yet, Llama 3.1. There are three different models, 8B, 70B, and 405B parameter models, with the largest model rivaling GPT 4o and Claude 3.5 Sonnet. It’s impressive to see how fast the gap between closed source and open source is shrinking!

OpenAI still remains in the news with the launch of their new AI-powered search engine, SearchGPT. In other news, fintech has a new unicorn, Aven, which announced a $142M raise at a 1B valuation. They are a consumer lending company that offers a credit card combined with a home equity line of credit (HELOC). Rohit Mittal had a great breakdown on their unit economics and valuation multiple:

Another week with drama on tech Twitter. This time, it’s Parker Conrad & Paul Graham vs David Sacks, and it’s about what happened at Zenefits 8 years ago. Why use Netflix when you have Tech Twitter?

This week’s fundraising announcements, M&A, and tech personnel changes that caught our eye:

• After years of trying, Revolut finally receives a UK banking license.

• Wiz walks away from Google’s $23B acquisition offer.

• Astranis raises $200M to build out a next-generation satellite program.

• Saronic raises $175M to build military drone boats.

• Harvey, the legal AI company, raises $100M at a $1.5B valuation.

• SOC 2 & Compliance startup, Vanta, raises $150M at a $2.45B valuation.

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.