Bitcoin miners lose $8B in 24 hours in wider market selloff

The stock market took a hit yesterday, with AI growth stocks in particular suffering as investors worry about sustainable valuations and ROIs. The jitters infected bitcoin and its cohort of bitcoin miners / AI-miner hybrids, with public companies in the sector getting bludgeoned with double digit drops on the day. - link

OUR TAKE: First, we liquidate the bears; then, we liquidate the bulls.

Thursday’s market action was abrasive — and maybe even a bit depressing — but what did investors expect after some of these stocks returned 100%, 200%, even 500% YTD before the rally deflated?

In fact, even despite yesterday’s brutal bloodletting, many of these stocks are still up fabulously year-to-date.

Still, the selloff is forcing the market to take a good, honest look at itself. Professional investors know its a bubble, asset managers/financial advisors know its a bubble, most retail investors are starting to recognize its a bubble (if they don’t already).

It feels like everyone is waiting for some event or crisis to spook the market and unwind the whole thing. Hard to say if yesterday’s scare signals we’ve reached this point, but the data show there’s at least some cause for concern.

Recent research from Mckinsey & Company estimates that worldwide data center CAPEX will total $6.7 trillion between now and 2030. Meanwhile, JPMorgan research argues that AI data centers will need $650 billion in collective annual revenue to eke out a 10% return on CAPEX spend by 2029.

Taken together, the two forecast project a grim view of the immediate ROI of the AI boom. Investors are taking notice and taking money off the table, but as I led this take, “The market can remain irrational longer than you can remain solvent.”

Case in point, famous Doctor-turned-investor Michael Burry of Big Short fame closed out his hedge fund, Scion Asset Management, this week.

Some took the move as a sign of defeat, while others (and I’m inclined to this view) took it as Burry admitting the market is too decoupled from reality for him to confidently trade.

He was notably early to the Mortgage-Backed Security short dramatized by The Big Short, the trade that would make him rich and famous.

Now, Burry is going to take his capital to a private account where he can be alone with his shorts and tell the rest of the market how wrong they are.

He very well could just be early, and this could be a temporary blip before we see the real market top. But the cracks are starting to show, and at least on Thursday, no assets were safe.

-CMH

Cash App and Square roll out Bitcoin payment integrations

Jack Dorsey’s Block rolled out a major bitcoin integration across its platforms. Square merchants can now choose to accept bitcoin using the Lightning Network, even if they don’t personally hold bitcoin. Meanwhile, Cashapp added over “150 new features” mostly centered around Bitcoin and stablecoins. - link

OUR TAKE: My initial take was that this announcement was mid. The more I look at it, the more I think this is my Dark Horse for the most important Bitcoin adoption story of the year.

Hear me out.

Historically Bitcoin users have been obsessed with user-led adoption. Basically go out and ask your local bodega to integrate some confusing, clunky Bitcoin point of sale.

We’re 16 years into this strategy and I am pretty sure fewer merchants accept Bitcoin today than did 8 years ago.

Square is merchant-led adoption. Merchants are incentivized to jump through the small hoop to add Bitcoin payments because A) it doesn’t cost them anything & B) it probably saves them money.

VISA, Amex, etc charge anywhere in the range of 2% - 5% every time you swipe your card at a merchant. The Bitcoin integration effectively waives those fees. So the merchants will actually want this feature out of personal financial interest.

Customers don’t have to have bitcoin either. Square/Cash App handwaves everything away and just “runs” Bitcoin under the hood.

Many Bitcoiners have speculated about this 

I think perhaps the reason why I was initially unimpressed is because I, like many Bitcoiners, have a bit of disillusionment from the last 5 or 6 times we were on the cusp of this merchant adoption.

I have to think that the fading optimism around Strike, the early Lightning excitement, and even the scaling wars took a lot of the wind out of the Bitcoin-as-a-medium-of-exchange enthusiasts.

But the numbers don’t lie: Cashapp has 55 million users, Square has 4 million merchants. That’s basically like the entire country of South Korea all getting Bitcoin on their phones overnight.

Hard not to be bullish!

-CBS

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Market makers Jane Street, Susquehanna increased IREN stake before October price run-up, filings show

A November filing details market maker firm Jane Street and Susquehanna taking positions in Bitcoin miner-turned-neocloud IREN prior to the October price run, according to purchases  September 30. Jane Street held a 6.7% position while Susquehanna held a 7% percentage - link

Czech central bank buys $1 million in bitcoin, other crypto assets for testing

The Czech National Bank (CNB) made its first-ever purchase of digital assets, creating a $1 million test portfolio to study the operational and regulatory implications of blockchain-based investments.- link

Tether unloads 20% of its stake in bitcoin miner Bitdeer

Stablecoin issuer Tether has trimmed its holdings in Bitcoin miner and AI data center firm Bitdeer (Nasdaq: BTDR) by some 7.7 million shares for $166 million in gross earnings since the April peak holding, recent filings show. - link

Strive raises $149.3 million in oversubscribed SATA IPO, buys 1,567 Bitcoin

Bitcoin asset treasury firm Strive (NASDAQ: ASST) said Monday it raised $149.3 million after completing an upsized and oversubscribed initial public offering of its Variable Rate Series A Perpetual Preferred Stock, SATA. - link