Inside Austin’s bitcoin underground
AUSTIN — There is a sort of clubhouse for Austin’s bitcoin believers on the second floor of the Littlefield Building at the corner of Congress Avenue and Sixth Street. The hideaway is at the crossroads of two worlds — the majestic thoroughfare that leads to the Texas State Capitol and the iconic, albeit notorious, stretch of bars, restaurants, and live music that define the capital’s party vibes. It’s an apt metaphor for the space itself.
The Bitcoin Commons is, at once, many things.
By day, it functions as an open plan, fluorescent-lit co-working space for the more corporate-minded bitcoin operators, but at night, it moonlights as a safe space for underground meet-ups of the industry’s rogue actors. Periodically, it plays host to conferences that draw in a mix of attendees ranging from venture capitalists to armed preppers living entirely off the grid. And on some afternoons, once happy hour hits, the kitchen at the back is retrofit with a stowaway bar.
“We also fund developers, and we help them advance their projects,” said Parker Lewis, one of the stewards of the Commons, as well as the author of a new book on bitcoin called “Gradually, Then Suddenly.”
“We help advance bitcoin through education and actually developing the monetary network, the code base, and the applications,” said Lewis, who is widely considered to be one of Texas’ de facto bitcoin ambassadors.
Francisco Chavarria was born in Mexico City and spent time in Salt Lake City, but three years ago, he made the move to Austin to be a part of a community of like-minded thinkers. His company, Yopaki, which is a neobank for bitcoin focused on the Latin American market, just won first place in a hackathon put on at the Commons.
“If you talk to other builders in the competition, a lot happens here,” said Chavarria. “There definitely is a sense of, ‘I don’t need for others to lose for me to win.’ There really is a relationship and a collaboration for bitcoin to succeed.”
“Right now it feels like we’re all winning because of the price, but those of us who have been building in the bear market, we know,” Chavarria added.
Austin’s “Bitcoin Commons” hosts regular meetups and conferences for the city’s bitcoiners.
CNBC
Bear or bull market, bitcoiners have flocked to Austin because of a combination of pro-crypto policies, abundant, renewable energy, and an ever-growing network of some of the brightest developers and miners on the planet. And even in the price doldrums, they typically bring the same level of enthusiasm to the conversation — though bitcoin’s recent stretch of record-breaking price moves has gone a long way toward boosting morale.
In March, bitcoin hit multiple, fresh all-time highs, as trader enthusiasm for the digital asset sector soared. A lot of that price run-up has to do with the record flows into the newly-launched spot bitcoin exchange-traded funds in the U.S., led by the world’s largest asset manager Blackrock and its $15.5 billion iShares Bitcoin Trust, which have helped to solidify bitcoin’s place as an asset class that’s here to stay.
Collectively, these spot ETFs have brought in around $60 billion, and in some cases, they have been breaking records for ETF flows altogether.
“The biggest driver is certainly the ETF flows, which have surpassed the expectations of all but the most bullish pundits,” said Castle Island Venture’s Nic Carter of bitcoin’s record price moves this month. “And these blockbuster flows have materialized before the major wirehouses, asset managers, and RIAs have actually approved the ETF for their clients.”
Carter added that there is also new liquidity coming into bitcoin from Asian markets via two main pathways: bitcoin’s version of non-fungible tokens known as ordinals, as well as bitcoin-issued coins called BRC20 tokens.
Underground vibes with an open bar
In the last 20 years, Austin has matured into one of the country’s leading tech centers, a trend accelerated by the Covid pandemic, which saw industry leaders migrate en masse from California.
“Bitcoin was founded in 2009. A lot has happened post-financial crisis. Austin was already emerging as a tech center, and you know, enter bitcoin, and it just became the logical home,” said Lewis, who runs business development at Zaprite, a bitcoin-native financial services firm.
It helps that Texas is a libertarian-friendly state that actively supports free market policies. It has proven to be a big draw for a group of people who think of bitcoin as a way of life — that is, a monetary network that is decentralized, borderless, and doesn’t answer to central banks or governments.
Austin’s “Bitcoin Commons” draws in an eclectic mix of people, including venture capitalists, bitcoin miners, and coders.
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Many hardcore bitcoiners ironically embrace the term maximalist or maxi as a way to self describe. In Texas, though maxis exist along a professional spectrum from venture capitalists, to miners, coders, company executives, and generalist techies, the eclectic tribe have a few things in common. Many are family-oriented, patriotic carnivores with an aversion to the overreach of government and a strong belief in the right to bear arms, among multiple other personal, individual liberties.
Bitcoin’s eponymous Austin lair, which is adorned with the Texas state flag and bitcoin memorabilia, has adopted Chatham House rules for many of its events to protect the identities of those conversing within its walls. One such meetup is the monthly BitDevs (short for bitcoin developers) gathering, where bitcoin builders, investors, and the bitcoin curious are all welcomed, so long as no pictures or videos are taken.
At these meetings, topics run the gamut, from detailed discussions about code to concerns that the Microsoft-maintained GitHub may pose a greater existential threat to the bitcoin network since much of the development work and conversations among coders happen on that platform. At one such gathering, the moderator of the two-hour session asked the room who ran a bitcoin node. More than half of the people in attendance raised their hands.
After attending multiple Austin BitDev meetups over the last three years, a few common conversation themes have emerged, including the focus on identifying threat vectors to the network and brainstorming workarounds. Beyond software, there are also concerns over hardware vulnerabilities, given that the ASIC chip used in bitcoin mining rigs are manufactured out of China, a country which has proven hostile to the crypto sector in recent years.
The “Bitcoin Commons” functions as a sort of clubhouse for the city’s bitcoin believers. It puts on a mix of programming, including conferences and hackathons, as well as hosts a co-working space by day.
CNBC
VCs flock back to bitcoin
The Commons hosted a hackathon, BitDevs, and a one-day conference dubbed the Bitcoin Takeover on the sidelines of the annual South by Southwest tech festival, which put on virtually no crypto programming this year.
Across those multiple gatherings, there was a newfound interest in talking about the burgeoning ecosystem of projects building on top of bitcoin’s blockchain, which began to heat up with the introduction of ordinals in Jan. 2023 — bitcoin’s version of non-fungible tokens.
One underrated driver of bitcoin’s recent rally is new programming innovations that may allow it to reach technological parity with ethereum. These advancements involve beefing up the bitcoin ecosystem with tools like smart contracts, which are programmable pieces of code that help to eliminate middlemen like banks and lawyers from transactions. That makes it easier for developers to create products and applications for consumers.
BitVM, for example, has a promising plan to do just that. It is ultimately trying to bring smart contracts to the bitcoin network, which has helped spur this renaissance of interest in layer two technology — that is, the startups being built on top of bitcoin’s base chain.
“I’ve never seen deal pacing move this aggressively in the bitcoin space in my entire career,” Carter tells CNBC.
Indeed, the VC appetite for these layer two bitcoin projects has been picking up in the last few months.
PitchBook says that the fourth quarter of 2023 was the first time in almost two years that deal value in the crypto sector had increased, reaching $1.9 billion — up 2.5% from the previous quarter. While still well off the 2021 high of $31 billion, funds are building back interest, and trust, in the space.
Grant Gilliam spent 15 years working in private equity in New York before pivoting to run a bitcoin VC fund called Ten31. This investment platform, which is focused exclusively on bitcoin, has invested $125 million of equity in aggregate since launching five years ago. More than $100 million was deployed in the last two years during the bear market.
“We invest across the bitcoin ecosystem across every major theme,” Gilliam told CNBC. “Anything that is relevant to bitcoin infrastructure, we like to say the picks and shovels of companies building products and services for holders of bitcoin.”
Gilliam, who spent a few years commuting from New York to Austin every month for the BitDevs meetup, said that some of the layer two bitcoin investments are more hype than substance, but he’s still bullish overall on the deal space.
“There’s been a lot of L2 hype lately, mainly driven by the ordinals, and inscriptions, developments or innovations, if you want to call it that,” Gilliam said. “There’s a lot of activity in that right now, but we haven’t been as focused on that. It’s our firm view that the ordinals will prove to be a passing fad.”
Gilliam says that Ten31 is focused on basic building blocks of the ecosystem, such as companies that are providing financial services, which could be custody trading and lending, or projects that are working to scale the lightning network.
Lightning, with is the layer two payment technology meant to realize bitcoin’s original vision of being peer-to-peer cash continues to struggle with the issue of reaching scale. Developers tell CNBC that a lot of engineering work remains to close that gap.
The Boys Club put on its own Austin summit on the sidelines of SXSW with programming on the new internet, crypto, and digital culture.
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Bitcoin-halving country
“Number go up” is a big mantra among bitcoiners, but as the community evolves, so too does the thinking about the price of the coin.
“Price is really an output of many inputs of human beings, building tools to make bitcoin both more secure and a greater utility,” Lewis said. “Price is the best indicator of more people coming to the conclusion that bitcoin is money, and it’s a better store of value, so it is very relevant.”
Every four years, bitcoin undergoes a market making event known as the halving. It cuts the production of new bitcoin in half, and it has typically come before a major run-up in the price of bitcoin.
Miners from around the world flocked to Texas when China banned the practice in 2021, attracted by the abundant renewable energy and a grid that’s friendly to flexible buyers of power — both ideal conditions for miners.
In April, however, the profits for these bitcoin miners will be cut in half.
For some, it may prove an Armageddon-level event. Others have braced for impact by swapping out their fleet of machines for more efficient rigs. The price run-up in bitcoin has also helped to give some of these companies a buffer in their profit margins.
West Texas miner Jamie McAvity has 60 megawatts at his mining site. It runs on a part of the grid that is 90% powered by a mix of solar and wind power.
“If you’ve been in for more than one cycle, you have situated yourself in a place where you can resist the halving to the best of your ability,” McAvity told CNBC at Austin’s Bitcoin Commons.
McAvity, who previously worked for ten years as a trader on the floor of the New York Mercantile Exchange, added that ETF flows have helped to change the pricing dynamics for the world’s largest coin.
“The spot ETF inflows are so massive that reducing the available supply of newly mined bitcoins from 900 to 450, is probably going to be immaterial relative to that,” he said.
“But who knows, the ETFs could cool off for a while, and it’s hard for someone to credibly say that a reduction in supply is not going to change the market price equilibrium, because that’s a fundamental principle of market economics,” he added.
Altcoin mania
A ten minute walk west from the Bitcoin Commons is the Austin Proper Hotel, a five-star establishment where the lighting is intentionally dim to strike a certain mood. Here, the Boys Club, a popular and buzzy, female-led organization which self-describes as a “social collective bringing new voices to the new internet” put on its own crypto conference on the sidelines of South by Southwest.
The Boys Club caters to a more blockchain agnostic crowd, where the focus is less on exclusivity to one coin or chain — and more about borrowing the best features from across the ecosystem to solve problems in the real world.
CNBC caught up with Micha Benoliel at the one-day summit. Benoliel built Nodle, a decentralized wireless network that’s now getting into the business of using the blockchain to battle AI-powered deepfakes.
“Blockchain is the only way to make a record that is immutable, and is going to prove the time at which this photo has been taken, or video, and also to help you prove the location and other elements that are going to reinforce that proof, so it creates a real immutable proof of authenticity,” he said.
The Boys Club put on its own Austin summit on the sidelines of SXSW with programming on the new internet, crypto, and digital culture.
CNBC
The one-day popup event gathered together more of a web3 crowd to talk about everything from the latest trends in tokenization to the resurgence of on-chain meme culture.
Similar to other bull runs in the price of bitcoin, some altcoins have seen a meteoric rise alongside blue chip names in crypto, because they’re seen as a comparatively cheaper buy.
Dogecoin, a meme-coin that was started as a joke, now has a market cap of nearly $25 billion, placing it in the top ten most valuable cryptocurrencies on the planet. Boden, a coin named after President Joe Biden, saw a run-up of more than 800% in a six-hour window after Super Tuesday, and the newly popular DogWifHat is collectively worth more than $2 billion.
Typically, this is the bellwether of a peak bubble moment, but analysts say that despite frothy conditions, this bull run is different to past cycles.
The price of bitcoin is cyclical, and it sees price run-ups roughly every four years. Each time, the price floor is higher. What’s also a departure this time around is the fact that institutional money is here in a way that it hasn’t been during past bull runs.
Fundamentals in the crypto market are playing a big role, as well.
In a note from JPMorgan on Mar. 15, analysts credit ether, the world’s second-biggest crypto token by market cap, for being a significant driver of crypto’s recent gains, including Coinbase‘s stock price rise. Ether has rallied nearly 50% so far this year, recently breaching the $4,000 price level and outpacing bitcoin’s returns, before paring back some gains.
“While the focus of the cryptocurrency marketplace has been the net new money going into U.S. spot Bitcoin ETFs and the positive impact on Bitcoin token prices (here, the spot Bitcoin ETF and its ultimate launch in January has driven the cryptoecosystem over the past several months), we see impact of ETH appreciation also as particularly meaningful,” JPMorgan wrote.
Regulators in the U.S. remain a universal concern for the crypto sector, especially amid reports of the Securities and Exchange Commission probing crypto companies building on the ethereum network.
Still, many in the space, including coders and investors remain optimistic.
Ethereum, the blockchain that underpins ether, underwent a major upgrade on Mar. 13 dubbed Dencun. Developers told CNBC it was expected to slash transaction fees by up to 90%. That is game-changing not just for the end-users, but also for the coders building apps on top of ethereum.
Base, crypto exchange Coinbase’s self-built layer two network, is ethereum-based and allows developers to more easily build decentralized apps. Coinbase’s Base lead, Jesse Pollak, anticipates this will open the door to applications in both the gaming and decentralized social media arena now that it is no longer nearly as cost prohibitive to build these types of programs.
“The thing that is happening with Dencun is we’re going to create a whole new kind of storage on ethereum that’s purpose built for Layer 2s like Base,” Pollak told CNBC.
“That means that right now we pay a ton to ethereum, and we’re going to pay a lot less, which is going to lower the fees for everyone. Because ethereum is basically going to build a product purpose built for us,” continued Pollak.
Chris Dixon, crypto chief at venture firm a16z, echoed that sentiment, noting that part of their portfolio is focused on these startups.
“The core idea is that if you build a social network, or a game or a financial service, on top of the blockchain, it has all sorts of benefits where the money and control flow out to the users and the creators that access the network, as opposed to the companies that control it,” said Dixon. “In the same way that steel was a better way to build bridges and buildings than wood was in the Industrial Revolution, blockchains are a building material.”
Tesla is telling new Model S and Model X buyers that they won’t have access to Steam gamin inside their electric vehicles.
Even though Tesla has been investing heavily into integrating video games into its in-car entertainment system, it still surprised many when Tesla said earlier this year that it planned to go as far as integrating Valve’s Steam, an online video game store and distribution platform, in its vehicles.
Steam has such a large library of games, including high performance games that haven’t been integrated into Tesla vehicles before.
In late 2022, Tesla officially launched its Steam Beta native app in new Model S and Model X vehicles.
However, we now learn that Tesla is dropping the feature. The automaker wrote to people taking delivery of new Model S and Model X vehicles:
Tesla is updating the gaming computer in your Model X and your vehicle is no longer capable of playing Steam games. All other entertainment and app functionalities are unaffected.
It doesn’t sound like current owners are affected by the change.
Tesla has been known to drop existing apps in new vehicles while keeping them vehicles already delivered, like the Disney Plus app.
Electrek’s Take
I’m not so surprised. While it was an interesting idea, I’ve always maintained that if you want to game inside your Tesla, you’re better off with a mobile gaming device, whether it be a gaming laptop or Steam Deck or something like that.
Some games are enjoyable inside the Tesla, but it is a limited gaming rig. Maybe it is because it is a car.
I assume that Tesla saw that very few people were using Steam inside its vehicles and dropped it.
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Environment
Toyota preps first electric pickup, the Hilux BEV, following BYD Shark PHEV truck launch
Following the launch of BYD’s first pickup, the Shark PHEV, Toyota is testing an all-electric Hilux BEV model. Toyota is preparing to produce its first electric pickup in Thailand by the end of next year.
Toyota to launch its first electric pickup in Thailand
As one of the top-selling pickups globally, the Toyota Hilux is the perfect model to go all-electric. It’s already sold in 180 countries and regions with a wide-reaching market of buyers.
Toyota has been teasing an all-electric version for some time. Although its first “electrified” Hilux Hybrid 48V was introduced last December, it still has a 2.8L diesel engine for a modest 5% fuel efficiency improvement.
The automaker even unveiled a hydrogen fuel cell Hilux prototype last year, so where is the all-electric version?
Speaking to reporters at the Bangkok International Motor Show in March, Toyota Thailand president Noriaki Kamashita confirmed the Hilux EV would roll out by the end of 2025.
“Our intention is to be producing the Hilux BEV over here,” Pras Ganesh, executive vice president of Toyota Motor Asia, confirmed to Reuters this week.
Although the first electric Toyota pickup will be aimed at the Thailand market, Toyota is considering exporting the model, according to Ganesh.
Toyota is still working out the kinks ahead of its debut.”The more range I have to put on it, the more battery I have to put on it, which means the weight of the vehicle also becomes significantly heavier, which means the loading can be much less,” Ganesh explained.
“So is it going to meet the customer’s usage needs?’ is always our biggest issue. We are always trying to understand what they do.”
BYD, Chinese automakers are taking over
Meanwhile, Chinese rival BYD launched its first pickup this week. BYD introduced the Shark, a plug-in hybrid pickup with 100 km (62 mi) NEDC all-electric range. Combined, the Shark PHEV can travel 840 km (522 mi) NEDC range.
BYD launched the Shark in Mexico but plans to take the pickup globally. Available in two versions, the GL model starts at $53,400 (899,980 pesos), while the GS costs $58,100 (969,800 pesos).
According to BYD, the Shark’s fuel consumption (7.5L per 100 km) is 40% lower than that of a full gas-powered engine truck.
At 5,457 mm long, 1,971 mm wide, and 1,925 mm tall, the BYD Shark is a direct rival to Toyota’s top-selling Hilux pickup (5,325 mm long X 1,855 mm wide X 1,815 mm tall).
Electrek’s Take
After traveling across Thailand for my honeymoon over the past few weeks, I can confirm that Toyota Hilux models are everywhere. Japanese automakers like Toyota and Honda are still the most popular on the road.
Having said that, BYD and other Chinese automakers like MG and GWM are making a strong push. Most of the Grab (Thailand’s Uber) that I took were electric MG or BYD vehicles. The most popular models during my travels were the MG4, BYD Atto 3, Ora Good Cat (and Funky Cat), and BYD Dolphin. I also saw a bunch of Teslas and a handful of Volvo EVs.
I even saw a bunch of them on the smaller, less developed islands. Signs everywhere (Airports, highways, markets, etc.) were promoting BYD, MG, XPeng, and other Chinese EVs.
BYD was Thailand’s best-selling EV brand last year, with the Atto 3 being the top-selling electric model. Over 19,200 were delivered, and you can start to see the shift.
Meanwhile, Toyota’s sales are down over 25% in Thailand this year (133,406) after falling another 32% in March.
After breaking ground last March, BYD is expected to finish construction on its first car plant in Thailand. Once up and running, the plant is expected to produce 150,000 vehicles a year as BYD looks to grow its brand in the region.
Toyota will need to hurry to keep up with Thailand’s rapidly evolving auto market, or it risks falling further behind BYD, MG, and GWM.
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The first model of NIO’s new low-cost Onvo brand, the L60 electric SUV, could lead to a sales surge, according to at least one analyst. Aimed at Tesla’s best-selling Model Y, the NIO Onvo L60 could boost sales to over 20,000 per month as an even more affordable ($30K) option.
NIO’s new $30K Onvo L60 could lead to a sales surge
After launching the first EV under its new mass-market Onvo brand this week, starting at $30,500 (219,900 yuan), NIO’s new electric SUV is already attracting analysts’ attention.
In a statement sent to investors overnight, Deutsche Bank (via CnEVPost) analyst Wang Bin’s team said: “Onvo L60 SUV will officially start delivery in Sep. 2024, and the company is targeting Onvo L60 monthly delivery volume of ~10,000 units.”
However, the analyst agreed NIO’s previous target of 20,000 deliveries per month is doable. “Thus we think Nio’s expectation of monthly >20,000 unit delivery is achievable with boost from Onvo.”
At 4,828 mm long, 1,930 mm wide, and 1,616 mm tall, the Onvo L60 will directly rival the Model Y (4,750 mm long X 1,921 mm wide X 1,624 mm tall).
A true Tesla Y rival?
Starting at $30,500 (219,900 yuan), NIO’s new electric SUV undercuts the Tesla Model Y in China. Tesla’s base RWD Model Y starts at $34,500 (249,900 yuan) with up to 554 km (344 mi) CLTC range.
| NIO Onvo L60 vs Tesla Model Y trims | Range (CLTC) |
Starting Price |
| NIO Onvo L60 (60 kWh) | 555 km (341 mi) | 219,900 yuan ($30,500) |
| NIO Onvo L60 (90 kWh) | 730 km (454 mi) | TBD |
| NIO Onvo L60 (150 kWh) | +1,000 km (+621 mi) | TBD |
| Tesla Model Y RWD | 554 km (344 mi) | 249,900 yuan ($34,600) |
| Tesla Model Y AWD Long Range | 688 km (427 mi) | 290,900 yuan ($40,300) |
| Tesla Model Y AWD Performance | 615 km (382 mi) | 354,900 yuan ($49,100) |
The new NIO Onvo L60 gets over 1,000 km (+621 mi) CLTC range with the top-of-the-line 150 kWh version. However, the base L60, starting at $30,500 (60 kWh battery), gets up to 555 km (341 mi) range.
Tesla’s Long Range AWD Model Y starts at $40,300 (290,900 yuan) with up to 688 km (427 mi) range, while the AWD Performance model costs $49,100 (354,900 yuan).
NIO says its new electric SUV has better energy consumption than the Tesla Model Y (12.1 kWh/100km vs. 12.5 kWh/100km) under the same CLTC conditions.
Bin’s team expects NIO to launch six new vehicles next year, generating 300,000 in sales. That would be 25,000 unit sales per month, including NIO’s new Onvo brand.
New EVs to accelerate growth
NIO CEO William Li and Alan Ai, president of Onvo, revealed the brand’s second model will be a larger (six or seven-seater) electric SUV. According to CarNewsChina, the second Onvo EV is expected to launch in 2025.
In addition to the two new Onvo EVs, Bin’s team expects four new NIO brand models to roll out next year: the ET9 Sedan, ES8 SUV, and ES7 SUV, all based on its new NT 2.0 platform.
“As a result, we forecast Nio’s total 2025 sales volume to increase 62% YoY to 300,000 units,” the note read. The breakdown includes 200,000 NIO brand models and another 100,000 in Onvo sales.
NIO delivered 15,620 vehicles last month, up 135% YOY, with the EC6 (+53%), ES6 (+48%), and ET5 (+52%) all seeing double-digit month-over-month gains.
NIO management told the media this morning that the the development of Onvo’s second EV is almost complete and deliveries will begin next year.
“If the product is done right, a single model could sell enough, as Tesla BYD has proven,” Li said. BYD recently launched its own Model Y competitor, the Sea Lion 07, starting at 189,800 ($26,250), undercutting both rival EVs (Check out BYD’s Sea Lion 07 here).
What do you you think? Can NIO’s new Onvo brand match Tesla’s or BYD’s sales? Drop us a comment below to let us know your thoughts.
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