Hello and welcome to Alts Cafe 👋 coming at ya a day later than usual due to MLK Day yesterday.
From today, you’ll only see topics you’ve told us you want to know more about.
Highlights from the full issue:
- Macro: Consumer credit card trends are not looking good
- Real Estate: Rates finally dipped back below 7%
- Startups: Layoffs haven’t slowed down much
- Private Equity: Brookfield raises $30 billion
- Crypto: Spot ETF Trades Begin
- NFTs: Polygon keeps crushing it
- Art: Russian Oligarch sues Sotheby’s
- Vintage Autos: Hertz sells 20,000 EVs
- Coins: Gold coins are having a moment
- Farmland: Hydroponics go viral
- Luxury: Louis Vuitton dives into Men’s Jewelry
- Wine and Spirits: $2.8M Whiskey
- Film & Music: CD sales actually increase?
- Precious Metals: Nickel shorts are at all-time highs
- Collectibles: LeBron signs with Fanatics
- Websites: A 6-figure bet pays off
Let’s go.
Wyatt
Table of Contents
Macro View
Bullish News
- U.S. unemployment claims fell to 202,000, a 3-month low.
- Moody’s upgraded Turkey’s economic outlook to positive.
- The ASEAN region’s GDP increased to USD 3.6 trillion in 2022 from USD 1.6 trillion in 2009.
- The IMF forecasts robust growth for Sub-Saharan Africa in 2024.
- Six of the top 10 global economies in terms of GDP growth are expected to emerge from the region.
- December’s wholesale prices unexpectedly dropped 0.1%, marking another potential sign of easing inflation.
- Economist Nouriel Roubini (usually a Doomsdayer) foresees a strong 2024 for the US economy
Bearish News
- The Federal Reserve says they will maintain high interest rates “for some time.”
- U.S. banks are increasing reserves for loan defaults, expecting profit drops up to 25% for Citigroup and 23% for Bank of America.
- California faces a $68 billion budget shortfall, prompting calls for a fiscal emergency declaration.
- The U.S. federal deficit grew 52% to $129 billion in December, with interest costs on public debt at $119 billion.
- Consumer borrowing increased by $23.75 billion in November.
- U.S. consumers are increasingly using BNPL, with a 32% rise in average payments.
- Revolving credit balances spiked 17.7%.
- The global economy is set for the weakest growth in 30 years, creating challenges for developing economies.
What are the odds?
Get $25 to play around with using this link.
What are we doing?
ALTS 1 Fund news:
We’ve finalised the acquisition of a significant bundle of major artworks.
Real Estate
Bullish News
- LondonMetric Property acquired LXI REIT for £1.9 billion, giving shareholders a 9% premium.
- US mortgage rates dropped below 7% in December, the first time since August.
- December saw a 15.9% rise in U.S. luxury home listings compared to last year.
- Boston plans to add 3,000 public housing units, the first major expansion in 40 years.
- Arizona announced $89 million for affordable housing, aiming to build 2,200 homes and support the homeless.
Bearish News
- Metropole faces foreclosure on Fifth Avenue after defaulting on a $215 million loan.
- China’s REIT market continues to tumble.
- U.S. office vacancy rates are expected to reach 19.8% in 2024, up from 18.4%.
- Only 4% of CEOs are prioritizing a full-time return to the office.
- Natural disasters caused $250 billion in global losses last year.
- Only $95 billion of these losses were insured.
- Home insurance is going up 42% in North Carolina.
How to invest in real estate right now:
It’s still not too late to short all the office REITs.
Startups
Bullish News
- Sequoia Capital returned $10 billion to investors in 2023.
- Zendesk acquired Estonia-based AI startup Klaus, enhancing its customer service suite.
- Blockchain gaming company Spielworks acquired Wasder, which does something with gamifying a social network.
Bearish News
- Layoffs continue…
- Unity Software cut 25% of its workforce, reflecting tech sector challenges.
- Flexe slashed 38% of its workforce, signaling industry shifts from growth to cost-cutting.
- Sisense, once a unicorn, halved its workforce since 2022, cutting 60 more jobs.
- Asia’s venture funding hit its lowest level since 2015.
- Latam also has taken a hit, hitting a 5-year low.
- Twilio’s CEO Jeff Lawson stepped down, amidst ongoing unrest from activist investors.
- The meat alternatives market struggles, with Beyond Meat’s sales down 31% and stock down 94% over three years.
- Revolut faces a class action lawsuit in Illinois for alleged biometric data misuse, affecting over 10,000 users.
- Lucid Motors delivered only 6,001 vehicles in 2023, missing its target despite new model launches.
- Carta decided to close its liquidity services business.
How to invest in startups right now:
Found or invest in an AI startup in Estonia. Seriously.
Private Equity and Private Credit
Bullish News
- 79% of private equity firms plan to increase acquisitions in 2024, up from last year.
- Lots of sponsors raising record amounts for new funds:
- Blackstone’s Private Equity Strategies Fund raised $1.29 billion.
- Apollo Global Management Inc. plans to raise $2 billion for a secondary credit investment fund.
- Lexington Partners raised $22.7 billion, exceeding its target for secondhand private equity stakes.
- Brookfield raised a record $30 billion for its flagship infrastructure fund.
- Oliver Wyman analysts predict a promising future for private credit, expecting the Basel III Endgame regulations to drive further growth.
Bearish News
- PE companies, realizing their acquisitions have to make money if they want a decent exit, are scouring LinkedIn for chief commercial and revenue officers.
- The Bank of England warned of risks in the private financing sector, facing scrutiny as cheap funding ends.
- Apollo wound down its Asia real estate equity business.
- US private equity and VC-backed company bankruptcies spiked by 174% to 104 in 2023.
- Private equity exits have hit a new low.
- Hedge funds are challenging private equity in distressed company control.
How to invest in PE and Private Credit right now:
Start applying for CRO and CCO roles.
Crypto
Here’s what you need to know:
Bullish News
- Off the back of the ETF approval, Bitcoin briefly reached $49,000 before vomiting back 20%.
- The bull case shows $100 billion inflows and $100k BTC.
- Upbit secured a Major Payment Institution license in Singapore, signaling growth in Southeast Asia.
- Binance Pay’s transaction volumes increased by over 71% in 2023.
- DeFi Technologies acquired Anthony Pompliano’s Reflexivity Research, expanding into crypto research for over 55,000 investors.
- Cardano (ADA) saw 38% wallet growth last year, outperforming Bitcoin, Dogecoin, and XRP.
Bearish News
- Coinbase is keeping its fees high despite lower-cost spot Bitcoin ETFs becoming available.
- CertiK, a crypto-security firm, suffered a Twitter breach.
- Fraudsters targeted Wise Lending with a flash lending scheme, making off with 177 ETH (~$464,000).
- Exchanges are delisting privacy coins like Zcash and Monero due to a lack of interest.
- Ethereum’s value relative to Bitcoin hit a 32-month low.
- 2023 crypto startup funding was less than a third of what it was in 2022.
How to invest in Crypto right now:
I’m still long-term bullish on Crypto. $100k wouldn’t surprise me.
NFTs
Bullish News
- Polygon’s NFT sales reached $10 million in one day, a six-month high.
- John Lê, a comic artist, became Solana’s top-selling artist, with $2.2 million in sales.
- Nike’s Swoosh division launched Nike In-Game Wearables.
- Forbes and Rarible announced a Web3 art contest, featuring a 15,000 MATIC prize pool.
- DappRadar reported 124% growth in daily Unique Active Wallets and 166% increase in NFT users.
Bearish News
- GameStop exited the NFT market due to crypto regulatory uncertainties.
- An Air Force analyst was arrested for an NFT scam.
- Twitter pulled the plug on NFT profile pictures.
- OpenSea users were targeted by a phishing scam involving Nike and RTFKT.
- Disney accused of “grifting” after latest NFT project announcement.
How to invest in NFTs right now:
NFTs are coming back, and so are scams. Be careful out there, kids.
Artwork
Bullish News
- Chinese collectors spent an average of $241,000 on art in the first half of 2023.
- Saudi Arabia continues to pump its art scene.
- Flora Yukhnovich’s “I’ll Have What She’s Having” sold for £2.5 million, smashing its £60,000 to £80,000 estimate.
- The merger of auction houses Freeman’s and Hindman created a $131.7 million powerhouse.
- Great news for Georgia O’Keeffe investors as her museum expands from 5,000 to 56,000 square feet.
- The online art market is set to reach $17.76 billion by 2030, growing at a 9% CAGR.
Bearish News
- Dmitry Rybolovlev sued Sotheby’s over alleged overpayments for a $2 billion art collection.
- Art SG saw a 30% drop in exhibitors compared to last year.
- Greek police dismantled a counterfeit art ring, including fake Picasso and Pollock works.
How to invest in Artwork right now:
Buy Saudi art.
Vintage Autos
Bullish News
- Lamborghini vehicles were up 5.85% last year.
- The eight classic cars tipped to increase in value the most in 2024.
- The Amelia Island Auction will feature the Gregorie Neck Collection, including a 1929 Bugatti T46 Cabriolet, estimated up to $1.2 million.
- Jerry Seinfeld’s 1996 Porsche 911 Targa sold for $164,000.
- A 1966 Ford GT40 MkI netted $6.93 million at auction, one of only 31 made.
Bearish News
- The Bromley Pageant of Motoring was canceled due to the Ulez (Ultra Low Emission Zone) expansion
- Progressive proposed a 19.78% rate hike in West Virginia for auto insurance premiums.
How to invest in Vintage Autos right now:
Lambo is the way to go go.
Rare Coins
Bullish News
- The Jovita Idar quarter won Best Coin Design of 2023, boosting collector interest in the U.S. Mint’s series.
- Heritage Auctions’ record-breaking 2023 included a $5.52 million 1870-S $3 gold coin.
- Hard Asset Management acquired the 1907 $10 Indian Rolled Edge, previously sold for $2.2 million.
- A pristine 1964 Kennedy half-dollar can fetch up to $5,200.
Bearish News
- The Perth Mint’s gold bullion sales dropped by 40.4% to 665,889 ounces in 2023.
- UK law requires reporting discoveries of gold and silver coins over 300 years old, with non-compliance leading to arrests.
- A $4,200 1851-O Liberty Head Quarter Eagle Gold coin vanished post-auction.
How to invest in Rare Coins right now:
Check grandpa’s coin jar for a 1964 Kennedy.
Farmland
Bullish News
- Canadian farmland increased in value by 800% over the last 30 years.
- The Mormon church has scooped up 370k acres of Nebraska farmland over the last few years.
- Gladstone Land Corporation has paid dividends for 131 consecutive months since its IPO.
- FarmBox Foods’ hydroponic farming video went viral, reaching 8 million viewers.
Bearish News
- Some experts fear a farmland value crash akin to the 1980s,based on Fed Policy Risks.
- Evergreen Acres Dairy faces a wage theft lawsuit involving hundreds of workers, alleging unpaid wages and poor conditions.
- Illinois farmland values are expected to stagnate in 2024, with a 35% sales decrease from 2022.
How to invest in Farmland right now:
Figure out where the Mormon church is buying land next.
Luxury Goods
Bullish News
- India’s luxury market is set to surge, with 1.66 million millionaires expected in India by 2027.
- Dubai Future Foundation and Richemont launched a program for luxury retail tech innovations, connecting innovators with investors.
- J Balvin invested in luxury watch marketplace Bezel, contributing to its $10 million funding.
Bearish News
- Luxury brands score an average of 21 out of 100 on workers’ rights.
- Hermès bags may yield high returns, but Louis Vuitton and Dior bags lose about 40-50% of their value.
- Chanel’s lawsuit against What Goes Around Comes Around questions the authenticity of the luxury resale market.
- Prada’s attempt to trademark its triangle pattern was mostly denied by the EUIPO Board.
How to invest in Luxury Goods right now:
India is booming. Figure out what people there like.
Wine and Spirits
Bullish News
- A 30-year-old Irish whiskey sold for $2.8 million, setting a record for Irish whiskey.
- Unlike the US and UK, the UAE Wine market is set to grow, driven by an expanding expatriate community.
Bearish News
- Wineries in 2023 faced challenges from wildfires and extreme weather, raising concerns for 2024.
How to invest in Wine and Spirits right now:
There are three two spots left on our investor trip to Tequila in February. Join us, won’t you?
Music and Film
Bullish News
- CD sales in the UK rose by 2% in 2023, reaching £126.2 million.
- This is the first increase in CD sales in 20 years.
- Vinyl sales also had a good year, increasing by 18% to £177 million in 2023.
- Christine McVie’s ‘Songbird’ piano and Taylor Swift’s signed guitar are up for auction, estimated at $20,000-$30,000 and $5,000-$7,000, respectively.
- Tennessee introduced the ELVIS Act, protecting music professionals against AI impersonation.
- Global on-demand audio streams reached 4.1 trillion in 2023, a 22.3% increase from the previous year.
Bearish News
- Spotify’s new policy will exclude royalties for tracks under 1,000 plays.
How to invest in Music and Film right now:
Make sure your songs get more than 1,000 plays per year.
Precious Metals and Gems
Bullish News
- Norway is unlocking 108,000 square miles for deep-sea mining.
- New Jersey exempted gold and silver from state sales taxes.
- Saudi Arabia is granting new exploration licenses.
- Dubai Duty Free’s 2023 sales hit $2.16 billion, a record driven by a 23.3% increase in gold sales.
- Chinese consumers show a strong preference for rubies, with 61% finding them desirable and 55% purchasing in the past year.
- The silicon metal market is forecasted to double by 2032, driven by the transportation industry’s shift to lighter components.
- The Battery Metals Market is expected to grow to USD 23.94 billion by 2030, with a CAGR of 3.5%.
Bearish News
- Zimbabwe’s gold output fell by 15% in 2023, missing the target by 10 tons due to electricity and forex issues.
- Nickel markets face increased skepticism, with short positions on the London Metal Exchange at a multiyear peak.
- Mining stocks, particularly gold miners, are hitting new lows in 2024.
- Lab-grown diamonds are increasingly mislabeled as natural, with counterfeit inscriptions misleading buyers.
- De Beers cut prices for mined stones by up to 40%, based on the growing demand for lab-grown diamonds.
How to invest in Metals and Gems right now:
What’s the lab-grown equivalent of BTC mining? Do that.
Collectibles
Bullish News
- The collectibles market in the Middle East and Asia Pacific is growing rapidly
- Non-sports trading cards like Pokémon are gaining popularity in India and China.
- LeBron James signed a multiyear deal with Fanatics Collectibles, potentially worth over $5 million annually.
- Michael Jordan’s Dynasty Collection sneakers could fetch up to $10 million at Sotheby’s.
- A collection of The Beatles’ autographs, including Paul McCartney’s plectrum, is expected to sell for £4,500.
- These Art Deco Posters might sell for $25,000 each.
Bearish News
- It was a humiliating weekend for Ken Goldin.
- Wander Franco’s autographed cards plummeted 77% in value due to sexual exploitation allegations.
- A scheme involving forged autographs on vintage “tobacco cards” led to a loss of over $73,000 for collectors and auction sites.
- A record number of Pokemon cards are getting sent off to PSA, which is leading to market saturation.
How to invest in Collectibles right now:
Your Charizard might not be as special as you think it is.
Websites and Domains
Bullish News
- A six-figure domain purchase paid-off for Jim Campbell.
- The strategic acquisition of Honeymoons.com led to a 700% surge in organic traffic and a tenfold revenue increase within five months.
- GOAT Foods credits its market dominance in snacks and confections to its premium domain names like chocolate.com.
- Efty launched Efty Pay, a new efficient transfer engine that seeks to revolutionize domain sales processes.
- Identity Digital received a patent for streamlined registry creation, enhancing efficiency for operators.
- The DNSRF expects a surge in blockchain domain registrations by 2026.
Bearish News
- Cybersquatting continues to harm the reputation of legitimate domain investors.
- Ecommerce roll-up companies like 10club and Upscalio halt acquisitions.
How to invest in Websites and Domains right now:
Don’t be a cybersquatter.
That’s all for this week
Cheers,
Wyatt
Disclosures
- This issue of Alts Cafe was brought to you by our friends at Doriot Venture Labs.
- We hold BTC and ETH in our ALTS 1 Fund.
- There are a couple of affiliate links above. If you click them, we may get a few bucks.
