BTC Breaks, Fed Cuts, and Oracle Deal

We can all breathe a sigh of relief this week - Bitcoin is back up, and the Fed is on track for rate cuts next week.

This Week in Crypto

Bitcoin price broke $114,000 as $757M in ETF inflows followed signs of cooling U.S. inflation.

• Producer price index numbers came in lower than expected due to declining service costs.

• As of this morning, Bitcoin was sitting at a little over $115K, as traders position for potential rate cuts.

Everyone’s favorite meme coin may have just become…legitimate?

• The Rex-Osprey DOGE ETF launched yesterday, becoming the first U.S. ETF built purely around a speculative memecoin. 

• DOGE surged to around $0.25, with volume above 1.5B tokens. 

Cboe Global Markets announced it will launch 10-year continuous futures contracts for Bitcoin and Ether on November 10.

• Unlike traditional futures that expire regularly, these continuous contracts let investors hold positions for up to 10 years with daily funding rate adjustments. 

The Solana community approved the Alpenglow upgrade, which will slash transaction finality from over 12 seconds to just 150 milliseconds.

• The upgrade means faster confirmations, stronger performance, and new possibilities for DeFi and gaming applications.

This Week in TradFi

U.S. consumer prices rose more than expected in August, while the annual increase in inflation was the largest in seven months, though these numbers will not prevent an interest rate cut from the Fed next week.

• The Consumer Price Index rose 0.4% last month after increasing 0.2% in July. 

• Concern about a softening job market will keep the Fed on course to resume interest rate cuts next week. 

  • Investors expect 25bps rate cuts at each of the Fed’s three remaining policy meetings this year. 

• Wall Street indexes opened more muted today after seeing record highs in the previous session - though they remain on track to log gains this week.

  • The Dow fell 0.07% this morning at open, the S&P rose 0.05%, and the Nasdaq rose 0.16%. 

• An increase in U.S. Treasury Bill issuance in recent months has reduced liquidity in the financial sector, increasing investor concerns that funding markets could face a September squeeze. 

  • That could potentially create ripple effects through markets by reducing demand for assets like stocks and corporate bonds.

On the international front:

• London stocks were mixed today but set for weekly gains, as markets priced in the likelihood of U.S. rate cuts. 

  • The FTSE 100 was up 0.3% this morning and was set for its second straight weekly gain.

• European shares slipped today, weighed down by a drop in healthcare stocks.

  • The STOXX 600 was down 0.2% as of this morning, with healthcare stocks down 0.6%.

• French inflation is down to 0.8% in August, down from 0.9% in July.

• And German inflation rose to 2.1% in August, with German consumer prices rising by 1.8% YoY in July.

• India’s retail inflation increased to 2.07% in August, as food prices crept up. 

• Pakistan’s central bank is expected to keep its rate steady on Monday, with floods ravaging farmland and threatening fresh food inflation.

• Gold prices rose today, holding close to record highs hit earlier this week.

  • Spot gold was up 0.4% this morning, close to Tuesday’s all-time-high of $3,673.95.

  • U.S. gold futures were also up 0.4% this morning.

This Week in Tech

The Federal Trade Commission announced yesterday that it’s launching an inquiry into seven tech companies that make AI chatbot companion products for minors.

• The companies are Alphabet, CharacterAI, Instagram, Meta, OpenAI, Snap, and xAI.

• The FTC is hoping to learn how these companies are evaluating safety and monetization of chatbot companions, and how they try to limit negative impacts on children and teens. 

• OpenAI and Character.AI currently face lawsuits from the families of children who died by suicide after being encouraged to do so by chatbot companions.

• Even with guardrails in place, users have found ways to bypass safeguards. 

OpenAI and Oracle have agreed to a massive cloud computing deal.

• Oracle signed a deal with OpenAI for OpenAI to purchase $300B worth of compute power over a span of five years. 

• OpenAI would start purchasing this compute in 2027, according to the Wall Street Journal.

• This would be one of the largest cloud contracts ever signed.

Klarna’s IPO on Wednesday raised $1.4B, largely for existing investors.

• The fintech company sold shares at $40, above its announced range of $35-$37, coming out of the gate with a $15B valuation.

• Shares immediately popped, opening at $52, and then settling to around $46 mid-day.

• Of the 34.3M shares Klarna sold, only 5M were sold by the company. The rest were sold by existing investors.

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

• Perplexity has raised $200M at a $20B valuation.

• Vimeo will be acquired by Bending Spoons, one of Europe’s largest mobile app developers, in an all-cash deal valued at about $1.38B.

• AI gaming startup Born raised $15M to build social AI companions that combat loneliness. 

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.

Disclaimer: None of the above is financial advice, seriously.