Bhutan buys Bitcoin, Rate Cuts, and Return to Office!

This Week in Crypto

The big news this week is really in the TradFi section. If you’ve been reading the previous editions, nothing here will come as a major surprise to you.

It’s been a week of respite in all, with a number of positive developments! The main one being that the price is sitting comfy at $63,000.

Firstly, the ETF volume has picked up, with some nice-looking flows. That being said the recent IBIT numbers are slightly perplexing:

• However, ETH flows remain virtually nonexistent and ETHBTC sinks to new yearly lows.

With the rate cuts comes increased global liquidity - i.e. money printing. This is the Bitcoin thesis in a single graphic - infinite Fiat, finite BTC.

Some notable buyers were revealed this week too:

• Obviously big Mike bought more ($450M) - because you know, the Pope is still Catholic. The numbers are slightly confusing on this front as the madman is issuing convertible notes faster than we can keep track, we’ll have to wait for Q3 earnings for clarity.

• The buyer you may not have had on your bingo cards was Bhutan, who announced $780M of holdings as proceeds from Bitcoin mining. They own more than El Salvador and are in 4th position on the government holdings table.

• Cathedra Bitcoin, a Bitcoin miner, announced a pivot away from mining toward data centers using the proceeds to buy on the open market.

This segways nicely into another piece of news - something that will likely go down as Bitcoin Lore - as Drew Armstrong of Cathedra Bitcoin assisted Former President Trump in purchasing burgers with Bitcoin on the Lightning Network at Pubkey in New York.

By the way, in case you missed it, we have a killer offer available for all new borrowers:

This Week in TradFi

Did anything notable happen in TradFi this week? We’ve been struggling to figure out what to write about.

Kidding, obviously. The long awaited rate cuts are finally here. 

• The Fed cut rates by 50bp! That’s it, that’s the bullet point.

• Rate cuts come after labor market and inflation woes have finally started to lessen. Policymakers believe that unemployment will be at 4.4% by the end of the year (up only 0.2% from current levels). Additionally, the Fed stated that they have confidence that inflation is moving steadily towards the target of 2%.

• Meanwhile, consumer confidence is at historically low levels (even with the slight uptick we’ve seen recently). Consumer confidence (and therefore consumer spending) needs to go up, which should be aided by the rate cuts. 

• The Gold and the S&P reached a record-high following the news, though, naturally, futures fell slightly.

• Fed Chair Jerome Powell implied massive rate cuts like this aren’t in the plans for the rest of the year, so expect 25bp rate cuts in November and December.

Do take the widespread bullish fervour with a grain of salt though…

Across the water:

• UK debt has now hit 100% of its GDP for the first time since the 1960s, when the UK was dealing with the financial repercussions of World War II.

• The Japanese government reports that the economy is in moderate recovery. They stated that private consumption, more than half the economy, showed a moderate increase and consumer spending on services is also up slightly. The bank will hold rates steady this month but indicated that they may increase rates later this year. 

• The South Africa central bank has joined the party, cutting rates for the first time in more than four years. The South African Reserve Bank lowered its lending rate to 8% from 8.25%, after inflation fell to 4.5%, in the middle of the bank’s target range. 

This Week in Tech

A quieter news in tech this week, but no worries, we found some content for you anyway.

Sam Altman is leaving the OpenAI safety committee, which will now become an independent board oversight group chaired by Zico Kolter, Carnegie Mellon professor. 

• This comes after rumors that Altman opposed AI regulation and many notable departures who were concerned with OpenAI’s focus (or lack thereof) on safety.

• The oversight group includes Quora CEO Adam D’Angelo, retired Army General Paul Nakasone, and former Sony EVP Nicole Seligman, all of whom are currently on the company’s board of directors. 

• The group will receive regular briefings from the OpenAI safety and security teams and have the power to delay releases until any safety concerns are addressed.

• However, it’s unclear if this group will actually be effective - ex-OpenAI board members wrote in an op-ed in May that they don’t think OpenAI can hold itself accountable. They wrote, “We believe that self-governance cannot reliably withstand the pressure of profit incentives”. 

And Amazon is mandating a 5-day return to office starting in 2025. 

• For almost a year and a half, Amazon’s RTO policy has been that employees must come into the office at least three days a week. 

• Only extenuating circumstances allow employees to work from home, such as sickness or childcare. 

• This is the strictest policy of any major company yet, with Salesforce and Disney requiring four days a week and Apple requiring three. 

• Stanford economics professor Nick Bloom, who has done quite a bit of research on post-COVID remote work behavior, writes that he believes this will lead to a jump in quit rates, and it’s likely that Amazon will reverse the decision. 

• Anecdotally, we’ve seen many LinkedIn posts and Tweets about people already ready to quit Amazon. However, the team here at Arch does indeed come to the office five days a week, so who’s to say which method is correct.

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

• Fathom, an AI notetaking startup, has raised a $17M Series A led by Telescope Partners.

• Cisco is laying off 5,600 employees, around 7% of its workforce.

• Generative AI company Typeface has acquired Treat, an AI company that creates personalized photo products, and Narrato, an AI-powered content creation and management platform.

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.