Bitcoin to $78K, Nvidia Stumbles, and OpenAI Scales Up

Yeah. It’s bad.

This Week in Crypto

I believe Tuesday saw the largest ever ETF outflow with over a yard sold. The boomers are capitulating their bags. Almost $3B has left the ETF complex over the past week, almost entirely offsetting Strategy’s 20k BTC buy and then some.

Looking at the high time frame picture, Bitcoin broke down from its 90-110k range and hit a low of $78k last night - prices not seen since the election in November. Gold and Equities also sold off amid macro fears over slowing consumer and government expenditure and sticky inflation, exacerbated by tariffs.

Bitcoin, however, has exhibited strong beta to the downside with most positive catalysts having already played out. The only remaining one is a potential SBR currently under discussion - it looks unlikely to happen in the first 100 days with polymarket placing this at 10% odds.

As briefly mentioned last week, Bybit suffered a staggering $1.5 billion hack, the largest in crypto history, with Ethereum stolen from its cold wallets by the North Korean Lazarus Group. Bybit has promised to reimburse affected users and is collaborating with authorities to trace the hackers, though the incident has further rattled an already volatile market. Some of the key findings from the post mortem are below:

In other news, the Arch team has been out in full force this week at Bitcoin Investor Week - if you are around today at the conference centre please drop us a note to meet in person!

Other highlights:

• Sen. Lummis says Washington is 'on the precipice' of stablecoin and crypto regulation bills

• Franklin Templeton seeks SEC approval for a Solana ETF involving staking

• OKX settle for $504M with the DOJ

This Week in TradFi

We’ll try to keep things calm after you’ve no doubt panicked over the crypto section. On the domestic front:

• U.S. stock indexes are up slightly today after a volatile week, with key inflationary data coming out today. We’ll report on the specifics next week, but the Personal Consumption Expenditure index comes out today and is expected to show that prices increased around 2.5% last month YoY vs. 2.6% in December. Traders continue to expect a 25bp rate decrease in July, but this of course hinges on a decent inflation report and the ongoing tariffs talks. 

• Speaking of a volatile week, the S&P 500 and Nasdaq ended down yesterday, especially impacted by Nvidia. Nvidia stock dropped 8.5% after the company gave a weaker-than-expected quarterly forecast for gross margin. Chipmakers Broadcom dropped more than 7% and Advanced Micro Devices dropped 5% as well. Nvidia is now down almost 20% since its record-high on January 6. 

• Jobless claims were also released yesterday - the number of Americans filing new applications for unemployment benefits saw the largest increase in five months last week, likely a result of snowstorms across the country. 

• U.S. economic growth also slowed in the fourth quarter (this is the second GDP estimate for Q4), with GDP increasing at a 2.3% annualized rate, vs. 3.1% in July-September. Government spending and exports were revised upwards, but consumer spending and investment were revised downwards. Consumer spending, which makes up more than ⅔ of the economy, grew at 4.2% last quarter, matching estimates.

On the international front:

• European shares continue to decline today, after President Trump said his proposed tariffs on Mexico and Canada would go into effect next week. STOXX 600 was down 0.4% as of this morning. 

• For once, some moderately good news out of Germany? The country’s unemployment rate rose less than forecast in February - the number of unemployed people increased by 5,000, much less than the Reuters estimated 15,000. The seasonally adjusted job rate remains steady at 6.2%. 

• French inflation has dropped below 1% for the first time in four years last month, ending the month at a 0.9% increase YoY - the last time the country reported an inflation rate below 1% was in February 2021. This was fueled (haha) by a big drop in energy prices - as well as a slowdown in service price increases.

• And India’s economy expanded 6.2% in the October-December quarter, led by increased government and consumer spending. The country expects continued acceleration this quarter as well. India remains the world’s fastest growing major economy, but 6.2% is still relatively soft compared to India’s typical rate of growth. Recent policy changes should have economic growth picking up more through the rest of the year.

This Week in Tech

OpenAI announced yesterday that it’s launching GPT-4.5, the company’s largest model to date. 

• GPT-4.5 was developed using the same techniques as before - increasing computing power and data during the model’s unsupervised learning phase. In every iteration before this, scaling up the computing power led to massive strides in performance. 

• However, the model is very expensive to run - the current price is $75/million input tokens and $150/million output tokens. GPT-4o, for context, costs $2.50/million input tokens and $10/million output tokens. 

• GPT-4.5 outperformed GPT-4o, o1, and o3-mini on OpenAI’s SimpleQA benchmark, and the company says GPT-4.5 hallucinates less frequently than other models. 

• On the SWE-Bench Verified benchmark, GPT-4.5 matches the performance of 4o and o3-mini but underperforms compared to deep research and Claud 3.7 Sonnet. 

• The organization says that GPT-4.5 is “at the frontier of what is possible in unsupervised learning”, matching what Ilya Sutskever said in December that “we’ve achieved peak data” and “pre-training as we know it will unquestionably end”. 

OpenAI plans to combine its GPT series with its o reasoning series, beginning with GPT-5 later this year.

Nvidia has officially fallen out of the $3T market cap club after stocks dropped following the company’s earnings report. 

• Shares dropped 8.5% yesterday following Nvidia’s quarterly earnings report, erasing $273B in value and dropping the company’s market cap to $2.94T.

• Revenue jumped 78% YoY, up to $39.3B. Data center revenue increased 93% to almost $36B. 

• The company’s not worried, though. They stated that Q1 of FY26 will be strong, and that they had solved their production issues for their Blackwell chip. 

• Other chip stocks also fell, with Advanced Micro Devices down more than 13% since the start of the month. 

• Nvidia is still the second most valuable company, behind Apple and ahead of Microsoft.

And a little drama for you. A demo from Optifye.ai, a member of YC’s current cohort, sparked backlash and caused YC to delete the video off their socials. 

• Optifye is building software to help factory owners know who’s working and who isn’t in real-time, with AI-powered security cameras on assembly lines. 

• You can watch the demo here, where the founders pretend to be garment factory owners and hone in on workspace 17 on line 6 as a low-performer on a hypothetical assembly line.

• The clip immediately sparked a ton of controversy, with X users calling the company “sweatshop software”. 

• YC deleted the demo video from its socials, but it’s unclear what, if anything, will come from the backlash beyond this.

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

• Stripe announced a tender offer for employees and shareholders, valuing the company at $91.5B. 

• Bridgetown Research raised $19M from Lightspeed and Accel to deploy AI business research agents. 

• AI-driven full stack platform Lovable raised $15M in a pre-Series A round led by Creandum.

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.