Saylor buys $1BN BTC & New Open-AI model

This Week in Crypto

It’s two weeks running now and the crypto news has been rather dry. However, there was a late saving grace!

Thank God for Michael Saylor as he helped us recover $58,000. This was a much-needed bid as a glance at either the BTC ETF flows shows volume is still somewhat lacking:

I’m not even going to bother posting Ethereum flows as nobody needs that negative energy today.

You know that very little happened this week when headlines include things that did not happen, rather than things that did happen.

• For instance, the Trump-Harris debate passed without mentioning crypto.

Given the dearth of other things to talk about, I’ll talk about ourselves instead. We’ve launched a referral program! Simply visit your dashboard on the web app and generate your unique link in the bottom left corner. Earn a minimum of $100 and up to $1000 paid in stablecoins immediately at the time of origination (seriously, there is no catch):

P.S. If someone forgot to use the link - they can send us an email with their referrer name we will credit their account!

This Week in TradFi

U.S. markets continue to expect a 50bp rate cut next week, despite some rockiness from Wednesday’s inflation report. 

• The Labor Department report showed that inflation in August declined to its lowest level since February 2021, with CPI increasing by 0.2%. That put the 12-month inflation rate at 2.5%, down 0.4% from July. However, core CPI, which excludes food and energy, increased 0.3%, slightly higher than the 0.2% estimate. Traders overreacted slightly, and the futures market started leaning towards a 25bp cut instead. 

• However, yesterday it was reported that initial jobless claims increased to 230k, up 2000 from last week, which increased the odds again that the Fed would cut rates by 50bp. 

• The dollar fell today and gold hit a record high as investors went back to expecting a 50bp rate cut (anyone else want to get off this seesaw?).

• Hopefully after next week’s rate cut - regardless of whether it’s 25 or 50bp - we can finally stop writing about rate cuts.

On the international front: 

• The European Central Bank reports that inflation looks good, and they expect to reach their 2% inflation target by the end of the year. Inflation fell to 2.2% in August, the slowest pace since July 2021.

• Growth continues to lag, particularly in Germany, pointing to incoming rate cuts from the other side of the pond as well. 

• Meanwhile, the Bank of England will likely keep interest rates steady at 5% next week, with wage growth slowing and the economy stagnating. Markets currently price a ~20% chance that the bank cuts rates by 0.25bp. 

India’s central bank chief reports that the country’s growth potential is 7.5% or higher, up from the bank’s initial full-year forecast of 7.2%. Indian industrial output is up 4.8% YoY in July, and retail inflation remains below 4% for the second consecutive month.

This Week in Tech

We don’t need to tell you (but we will anyway) that some of the biggest news in tech this week is that OpenAI has released their new model o1 (Strawberry for short).

• o1 has already sent ripples through the tech world, with users reporting massive improvements. The model spends extra time essentially fact-checking itself, which allows it to avoid many of the pitfalls older OpenAI models have fallen for (like the infamous “how many Rs are there in strawberry?”). 

• Noam Brown, a research scientist at OpenAI, says the model is trained with reinforcement learning, which teaches the system “to ‘think’ before responding via a private chain of thought”. 

• So far, only ChatGPT Plus and Team users can use o1, while Enterprise and educational users will receive access next week. 

• The model also currently can’t browse the web or analyze files, but the team says that’s coming. It’s also 3x the cost of 4o right now, at $15/1M input tokens and $60/1M output tokens.

In news that shocked the tech world, Klarna is shutting down its SaaS providers and replacing them with internally-built AI.

• Klarna is an e-commerce payments processor, with more than 150M users. Last year their losses totaled almost $250M, and this year at the halfway mark they reported a net loss of $320M - possibly driving these changes. 

• So far, Klarna has stopped using Salesforce (although does anyone really know what Salesforce does?) and HR hiring platform Workday. However, the company has said this is only the beginning, and they plan on automating many more tools. 

• This isn’t their first foray into AI tools. In February of this year, Klarna unveiled an AI-powered customer service assistant, saying it could do the work of 700 customer service agents. 

• However, many folks in the tech world are very skeptical that this is a good idea. Tools like Workday, though they may seem simple on the face, have decades of data, processes, and tested workflows built into them. And that doesn’t even begin to cover the much more complicated Salesforce platform. It seems unlikely that Klarna’s engineering team can quickly spin up alternatives without massive gaps in systems coverage or tons of money poured down the drain. 

• We’ll be watching, though, and we’re prepared to eat crow if we’re wrong!

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

• Reversion, which develops carbon-negative power plants, has raised a $62M Series A with a $100M backlog of orders.

• Former Alphabet president Sergey Brin is back and working at Google on various AI projects.

• The entire team at Annapurna Interactive, the video game publishing division of Annapurna Studio, has resigned following a dispute in negotiations to spin off as an independent entity. 

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.