Hello and welcome to Alts Cafe
Highlights from the full issue:
- Macro: US budget deficit hit $296 billion
- Real Estate: Goldman thinks the bottom is in for CRE
- Startups: Mental health issues across the board
- Private Credit: Goldman’s 5-year private credit goals
- Crypto: Bitcoin reached a new high (again)
- NFTs: Trading volumes dropped 66% for ETH NFTs
- Art: Theft of uninsured works
- Vintage Autos: 10 affordable vintage convertibles
- Coins: A creative fraudster gets caught
- Farmland: The Mid-Atlantic is surging
- Luxury: Balenciaga gets ridiculed (again)
- Wine, Tequila, and Spirits: Canada capped alcohol taxes
- Film & Music: Spotify slashed royalties
- Precious Metals: New tax rules in Wisconsin
- Collectibles: Buy Kobe Bryant’s ring
- Websites: Sedo’s upcoming .AI auction
Let’s go.
Table of Contents
Macro View
Bullish News
- HSBC expressed a positive outlook for China’s economy.
- NVIDIA’s Data Center revenue grew by 409% in Q4 FY2024.
- February saw a 1.06% increase in consumer spending in everything but autos and gas.
- Russia’s economy grew by 3.6% last year despite over 16,000 Western sanctions.
- TikTok drove $14.7 billion in revenue for US small-business owners in 2023.
- India finalized a new free trade agreement with four non-EU nations to boost investment by $100 billion and create one billion jobs.
Bearish News
- The US budget deficit swelled to $296 billion in February.
- The Sahm rule and yield curve indicated a 58% probability of a US recession before February 2025.
- Auto insurance rates surged by 20.6% this past year.
- Family Dollar’s stock dropped 15% following plans to close nearly 1,000 locations.
What are the odds?
Get $25 to play around with using this link.
What are we doing?
ALTS 1 Fund news:
We’re looking to open the fund up again in April.
Real Estate
Bullish News
- Goldman Sachs thinks the commercial market has bottomed.
- Blackstone called commercial real estate a generational buying opportunity.
- Indiana’s real estate market saw a 21% increase in home sales in February 2024, up from the same time in 2023.
- Manhattan Mini Storage acquired a prime Chelsea location in New York City, expanding its footprint with a 144,800-square-foot self-storage facility.
- Seattle’s Mayor proposed legislation to convert commercial real estate into residential spaces to improve housing affordability.
- H&R Real Estate Investment Trust acquired a 75% stake in Brooklyn’s Gowanus development site for $76.5 million.
Bearish News
- “Distressed sales made up more than a fifth of Chinese commercial real estate deals in 2023″
- The National Association of Realtors faced a $418 million settlement over the traditional real estate commission structure.
- Manhattan’s 222 Broadway is under contract for 30% of its 2014 price.
- US foreclosure activity saw an 8% annual increase in February 2024.
- Things look bleak for German real estate:
- Commerzbank’s real estate chief predicts a prolonged downturn.
- Deutsche Pfandbriefbank predicts a further 10% fall in German office prices.
- San Francisco’s office-to-housing conversion project faces foreclosure.
- UK Homebuilder Persimmon reported a 52% slump in annual profit.
How to invest in real estate right now:
I wonder if office-to-housing will work better in Seattle than SF.
Startups
Bullish News
- Gulf Capital announced a $100 million investment in the Saudi tech sector.
- HSBC announced plans to hire nearly 50 bankers for its US venture lending expansion in technology and healthcare.
- South Florida startups secured $2.4 billion in VC funding in 2023, the region’s third-highest year for venture capital activity.
- Startups fighting disinformation attracted over $250 million in funding to combat AI-generated falsehoods.
- Unicorns!
- Applied Intuition’s valuation hit $6 billion after a $250 million Series E funding round.
- Monad Labs valuation hit $3 billion.
- Together AI reached a $1.25 billion valuation after a Salesforce-led funding round.
Bearish News
- Reid Hoffman, Michael Moritz, and others left their venture capital roles as a generational shift sweeps Silicon Valley.
- Revolut’s valuation was reduced by $5 billion due to UK banking license delays.
- 45% of startup founders rated their mental health as ’bad’ or ‘very bad’, with 61% considering quitting.
- Roblox insiders sold $12 million of stock.
- India’s antitrust body ordered a probe into Google’s in-app billing practices.
How to invest in startups right now:
Ask your founders if they are okay… or offer a hug
Private Equity and Private Credit
Bullish News
- Blackstone’s assets rose to a record $1.04 trillion, up 7% in 2023.
- GoldenTree closed its Private Credit Fund raising over $1.35 billion.
- CVC and HPS discussed merging to create a $300 billion asset management giant.
- Goldman Sachs announced a goal of expanding its private credit portfolio to $300 billion in five years.
- Fulcrum Equity Partners closed $372 million for Fund V, surpassing their target.
- HarbourVest Partners acquired a $1.2 billion portfolio from Cathay Life Insurance.
Bearish News
- Private credit portfolios look overvalued.
- The Center for Autism and Related Disorders, after being acquired by Blackstone, filed for bankruptcy and closed over 100 facilities.
- Hedge funds’ leverage nears record highs.
- The IPO window for Chinese companies in the US has narrowed, causing challenges for private funds cashing out.
- Over 60% of physicians view PE involvement in healthcare negatively.
- 80% of new European private credit funds used ‘subscription lines’ from banks in 2023 to enhance returns.
How to invest in PE and Private Credit right now:
More leverage — what could go wrong?
Crypto
Here’s what you need to know:
Bullish News
- Bitcoin mining daily revenue hit a new peak of over $78 million.
- UXLINK secured over $9 million in funding for its Web3 social platform.
- Robinhood’s stock rose over 5% due to increased crypto trading volume.
- Crypto funds saw a record $2.7 billion inflow in a week, totaling $10.3 billion year-to-date.
- South Korea’s crypto trading volumes exceeded its stock market transactions.
Bearish News
- Over $2 million in Ethereum was stolen in a phishing scheme, dropping the victim’s net worth by 99.93%.
- The founder of Bitcoin Fog was convicted of money laundering, forfeiting significant crypto assets.
- Crypto.com was fined $3.1 million by Dutch regulators for operating without registration.
- Binance’s top crypto crime investigator was detained in Nigeria.
- Prosecutors seek a 40 to 50-year sentence for SBF for orchestrating a “historic fraud” in cryptocurrency.
How to invest in Crypto right now:
Government tolerance for sketchy corporate activity continues to dwindle.
NFTs
Bullish News
- Bitcoin’s NFT market sales reached over $22.2 million in a single day.
- Interest in virtual fashion NFTs saw a 66% increase from 2022.
- SuperRare expanded into Bitcoin with a unique collection of Ordinals inscriptions by artist Killer Acid.
- VeVe launched a new Ethereum NFT comics platform featuring Marvel’s Spider-Man and X-Men.
- Pallet Exchange raised $2.5 million to enhance NFT trading with a focus on social interaction.
Bearish News
- NFPrompt’s security breach led to hackers controlling multiple wallets, including the treasury.
- UK’s HMRC seized NFTs in a $1.89 million VAT fraud case, a government first.
- Starbucks announced the closure of the Odyssey Beta NFT program, ending March 31.
- NFT trading volumes plummeted about 66% from last year, despite Ethereum’s rally.
How to invest in NFTs right now:
Time to stop procrastinating Bitcoin NFT research.
Artwork
Bullish News
- Jadé Fadojutimi set a new auction record at Christie’s London, selling The Woven Warped Garden of Ponder for £1.6 million.
- Dutch individuals own €9 billion in art, with a Van Gogh selling for €4.6 million at TEFAF.
- 83% of younger collectors now view art as a reliable investment.
- A.I. technology by Art Recognition confirmed a drawing as Albrecht Dürer’s work with 82% certainty.
Bearish News
- UK museums and galleries saw a 49.5% drop in international visitor foot traffic in 2023 compared to 2019.
- The Denver Art Museum is returning 11 antiquities linked to a decades-long illicit trafficking operation.
- Artists face significant risks when displaying work in uninsured public spaces, as seen by theft in San Mateo.
- The Queensland Symphony Orchestra faced criticism for posting “some of the worst AI-generated artwork”.
How to invest in Artwork right now:
Breaking news: expensive things need insurance.
Vintage Autos
Bullish News
- Ferrari’s “Big Five” collection is set to dazzle at RM Sotheby’s auction with an estimated value of up to $20 million.
- The 1969 Porsche 908/02 LH Spyder, featured in ‘Le Mans’, is expected to fetch $5.7 million at auction.
- Elvis Presley’s 1969 Cadillac Eldorado sold for $253,000 at a Mecum auction.
- These 10 affordable convertibles have decent investment potential.
- Collector cars from the 1955-1975 era have accounted for over 39% of the $15 billion spent in the last five years.
Bearish News
- An auto graveyard in Alaska filled with vintage vehicles from the 1950s to 1970s faces closure due to legal changes.
- A gang in the UK stole luxury vehicles worth £3.7 million using advanced technology to hijack key signals.
- The FBI raided Kris Roglieri’s mansion, seizing luxury cars as part of fraud investigation into Prime Capital Ventures.
- A Tesla Cybertruck failed to sell at Mecum.
How to invest in Vintage Autos right now:
Can I hire this UK gang to fix my Roku? I can’t change the volume from 2 feet away.
Rare Coins
Bullish News
- A rare 1kg gold coin commemorating Queen Elizabeth II’s reign is set to auction for $240,000.
- A rare medieval coin linked to King Edward III is expected to fetch £8,000 at auction.
- An 1861 Half Eagle coin minted in Charlotte, North Carolina, was valued at $15,000.
- A 2019 Paddington Bear 50p coin was auctioned for £1,500.
Bearish News
- Thieves stole $1,350 in coins from a Nebraska jewelry store.
- A metal detectorist’s fabricated find in Herefordshire nearly altered British history.
- A Texas man was arrested for contaminating antiques with fecal matter under his kilt in Spring, Texas.
- The value of old coins is often overestimated due to factors like rarity and condition.
- Most 50 paise elephant coins are not nearly as valuable as many collectors think.
How to invest in Rare Coins right now:
Wash your kilt
Farmland
Bullish News
- Canadian farmland values increased by 11.5% in 2023.
- The USDA announced a $138 million investment in climate-smart conservation easements.
- Kansas farmland values rose by 16.3% in 2023.
- Suburban areas in the Mid-Atlantic are seeing a surge in small farm startups.
- Montana’s farmland value grew by over 800% in the past 15 years.
Bearish News
- Iowa’s farmland auctions experienced several ’no sales’ in February.
- Tennessee is projected to lose 2 million acres of farmland by 2027.
- The US has lost 141,733 farms in five years.
- Family farms could see a $9 billion tax increase in 2026 with the expiration of the Tax Cut and Jobs Act.
How to invest in Farmland right now:
Try to qualify for some FDA money.
Luxury Goods
Bullish News
- Luxury retail leasing in India doubled in 2023.
- Designer handbags are pushing fashion boundaries with abstract, avant-garde, and alien-inspired designs.
- Ralph Lauren launched Polo Est. 67, a new baseball-themed fragrance.
- Rolex unveiled a new Everose-Gold Day-Date 40 at the Oscars, made from 18K Everose gold.
- Italian Design Brands reported a 16.6% sales increase in 2023.
- Fashionphile’s acquisition of Two Authenticators aims to expand its secondhand luxury market presence.
Bearish News
- Diamonds in China have lost value due to a decline in marriages.
- Balenciaga’s $3,300 tape bracelet faced ridicule on Chinese social media.
- Burberry’s short interest surged by 1,510.8% in February.
- Gucci’s python skin suppliers face allegations of animal cruelty in a PETA investigation.
- Brooklyn’s ‘Bling Bishop’ convicted of fraud for misusing a parishioner’s savings on luxury goods.
How to invest in Luxury Goods right now:
Want a DIY Balenciaga bracelet? Go to Home Depot.
Wine, Tequila, and other Spirits
Bullish News
- The Inspired Home Show 2024 debuted an Ultrasonic Accelerator for aging whiskey and aerating wine.
- India’s liquor industry has become one of the largest globally, driven by rising disposable income and a growing population.
- Pennsylvania’s liquor and wine sales set a new record, surpassing $3 billion in the 2022-23 fiscal year.
- Canada capped alcohol tax at 2% until 2026.
Bearish News
- US beer consumption hit its lowest level since 1999, dipping below 200 million barrels in 2023.
- Direct-to-consumer alcohol shipping faces increased scrutiny over public safety concerns.
- California’s wine market downturn has led to mass vineyard removals in Lodi, with thousands of acres cleared.
- Colorado proposed an alcohol fee increase to fund addiction treatment.
- Norway’s alcohol sales reached a four-year low in 2023, with declines across beer, wine, and spirits.
How to invest in Wine and Spirits right now:
Beer consumption hits a low, despite my best efforts.
Music and Film
Bullish News
- Germany’s music market grew by 6.3% in 2023, reaching €2.21 billion with digital revenues up by 7.9%.
- Spain’s recorded music industry reached $567 million in 2023, with a 15% increase in streaming subscriptions.
- Universal Music Group’s policy change with Pandora could shift $135M in annual artist royalties.
- The IFPI shut down nine streaming manipulation sites in Canada.
- AEG Presents and Cárdenas Marketing Network (CMN) partnered to create a Latin touring powerhouse.
Bearish News
- Spotify’s new policy excludes royalties for songs with fewer than 1,000 streams.
- Universal Music Group’s Project Timeout led to 120 million muted TikTok videos due to copyright takedowns.
- Rising costs and tighter budgets have led to music festival cancellations across the US.
- Hollywood faces a silent crisis with decaying digital archives of movies and TV shows.
- The “Eras Tour” Ticketmaster meltdown spurred legislative action in Minnesota.
How to invest in Music and Film right now:
Pay attention to the European market.
Metals and Gems
Bullish News
- Gold speculators expect a multiyear bull market [Ed: of course they do ]
- The Metals Company’s stock surged 15% following a US bill advocating for increased deep-sea mining support.
- Southstone Minerals Limited’s Oena Diamond Mine reported strong diamond sales averaging $2,307 per carat in Q2 2024.
- De Beers’ diamond sales improved since their previous cycle, crossing $430 million.
- Wisconsin lawmakers approved a tax exemption for metal bullion.
Bearish News
- The EU ban on Russian diamonds has created challenges for Antwerp’s diamond trade.
- A luxury jewelry company supervisor was arrested for stealing millions in precious metals over three years.
- Copper prices rose as production faced cuts due to raw material shortages.
- Abandoned Welsh mines are leaking 500 tonnes of harmful metals annually, affecting 700km of waterways.
How to invest in Metals and Gems right now:
500 tonnes of harmful metals, probably fine.
Collectibles
Bullish News
- Robert Edward Auctions’ March Encore Auction will feature over 3,400 collectibles, including a 1933 Babe Ruth card.
- Market Decipher released their Collectibles Market Report, 2024–2034 with 50 new product categories.
- Kobe Bryant’s 2000 NBA championship ring has bids reaching $54,000.
- Trader Joe’s mini tote bags are selling for nearly 200 times their original price on eBay.
- Vintage Japanese electronics are valued as treasures in Indonesia.
Bearish News
- Did Ken Goldin screw a consigner out of $3 million?
- Adidas reported a rare annual loss of €58 million in 2023 due to the Yeezy breakup.
- A cargo of Jaromir Jagr bobbleheads was stolen before a Pittsburgh Penguins event.
- The global toy market saw a 7% decline in 2023, its worst performance in over 15 years.
- Trump’s sneaker venture faces skepticism over quality, with critics comparing them to cheap wholesale shoes.
How to invest in Collectibles right now:
In hindsight, the Trader Joe’s mania was obvious.
Websites and Domains
Bullish News
- “AI” and “Bet” are trending keywords in the domain name aftermarket, according to Afternic’s January report.
- Sedo will host an exclusive .AI domain auction from March 21-28, as AI-related domains reach peak demand.
- Designer Brands Inc. acquired the Shoes.com domain.
- JM Bullion secured the prestigious Gold.com domain.
- ICANN won a legal battle to maintain control over the allocation of single-letter .com domains.
- The .austin domain launch at SXSW introduced a city-centric blockchain-based TLD.
Bearish News
- Microsoft’s domain overhaul could cause service interruptions for developers and customers in June 2024.
- Nominet might increase prices for .uk domains as registrations dwindle.
- Google’s March 2024 Core Update deindexed over 800 websites.
- Gumroad’s new policy limits NSFW content, causing a detrimental loss of income for adult artists.
How to invest in Websites and Domains right now:
Bet on .bet domains.
That’s all for this week
Cheers,
Wyatt
Disclosures
- We hold BTC and ETH in our ALTS 1 Fund. Ken Goldin has blocked me on Twitter.
- There are a couple of affiliate links above. If you click them, we may get a couple of bucks.
