Hello and welcome to Alts Cafe
Welcome to your customized look at the alt-investing landscape.
Highlights from the full issue:
- Macro: BlackRock issued a double upgrade to US stocks
- Real Estate: Demand for “Class A” offices is increasing
- Startups: An AI accounting startup hits unicorn status
- Private Credit: Bain Capital is investing in India
- Crypto: Gemini pays a $21 million settlement
- NFTs: Bitcoin NFTs have cooled off
- Art: A ruling is reached for the Rybolovlev Trial
- Vintage Autos: Emirates Auctions hosted its first online classic car auction.
- Coins: A volunteer found a $10,000 coin
- Farmland: A record-breaking sale in Missouri
- Luxury: Hermes is expanding in Hong Kong
- Wine and Spirits: Tonic Wine is a growing trend
- Film & Music: Universal removes its catalog from TikTok
- Precious Metals: February is usually great for Copper
- Collectibles: UFC collectibles are growing in popularity
- Websites: Amazon Aggregators are failing
Let’s go.
Table of Contents
Macro View
Bullish News
- The IMF raised its 2024 growth outlook, predicting a faster-than-expected inflation decline.
- The US is projected to lead G7 nations with a 2.1% GDP growth in 2024.
- Sustainable investing is on the rise, with 77% of investors prioritizing companies with environmental benefits.
- The Economic Confidence Index reached a peak for the first time since 2022.
- BlackRock issued a double upgrade to US stocks.
- Italy and Spain beat economic forecasts in late 2023, helping the Eurozone avoid recession.
- China will maintain fiscal expansion this year to try to spur growth.
Bearish News
- US households now grapple with record credit card debt of $1.08 trillion as savings dwindle.
- The debt-to-GDP ratio in China hit a new high of 287.8% in 2023.
- Bain thinks that the US faces a persistent recession risk.
- Corporations continue to hike prices, intensifying ‘greedflation’ fears.
- Germany’s economy contracted 0.3% in Q4, with another contraction expected in Q1.
- States like California are facing substantial budget deficits, with a record shortfall driven by falling home sales and lower business investment.
What are the odds?
Get $25 to play around with using this link.
What are we doing?
ALTS 1 Fund news:
Nothing to report
Real Estate
Bullish News
- Brokerage leaders are optimistic about 2024’s housing demand.
- Real estate crowdfunding is on the rise.
- The demand for “Class A” offices is increasing.
- Brazil’s real estate credit sector hit a record BRL 259 billion in lending for 2024, up 3% from last year.
- Single women dominated homeownership in 2023, holding 18% of the mortgage market.
- CIP Real Estate’s portfolio is on track to reach $2.5 billion, with a new $300 million investment in Texas industrial properties.
- Southern California’s home prices rose 5% year-over-year.
Bearish News
- US industrial leasing activity dropped 8.8% in 2023, leaving 69% of new space vacant.
- China’s property sector remained weak, with January sales down 33.3% year-on-year.
- The Bennett lawsuit could force first-time buyers to pay agent commissions.
- Mosser Companies’ portfolio sale could mean trouble for San Francisco’s rental market.
- Minneapolis tax revenues are down, mirroring Great Recession levels.
- Kevin O’Leary expects a commercial real estate crash.
- Real estate auctions in South Korea hit a nine-year peak due to a 61% rise in loan defaults.
- Florida’s elderly risk home loss from soaring insurance premiums.
How to invest in real estate right now:
Buy property at auction in South Korea
Startups
Bullish News
- Secondary deals in venture capital are heating up.
- DataSnipper, an AI accounting software startup, reached a $1 billion valuation, becoming a unicorn.
- Nvidia increased its AI startup investments by 280% in 2023.
- Healthcare startups like Datavant and Hinge Health are gearing up for IPOs.
- Japanese startups saw a record $9.7 billion in venture capital in the end of 2023.
- Venture capital is slowly improving (at least according to Preqin).
- Viking Global Investors have thrived, despite tough conditions for most of its peers.
Bearish News
- The number of startup bankruptcies hit a decade-high in 2023.
- Layoffs are still hitting hard
- The tech sector has already shed 28,970 jobs this year.
- Edtech unicorn GoStudent, backed by SoftBank, cut over 100 jobs in its third layoff since 2022.
- Startup Nation Central, an Israeli high-tech advocate, laid off 18% of its workforce due to a slump in donations.
- Valuations are getting crushed:
- Yumi’s valuation tanked to $40 million, down from an all-time high of more than $300 million.
- Paytm’s market value crashed to $3.7 billion, far below its $20 billion IPO valuation.
- Peloton’s shares fell 20% after the fitness company reduced its annual revenue outlook.
- Venture capital investors are now aiming for 2x returns, a significant drop from the once-expected 7x.
How to invest in startups right now:
Keep an eye on Healthcare IPOs
Private Equity and Private Credit
Bullish News
- Secondary deals in the private credit market are projected to hit $50 billion by 2026.
- Expect a surge in megadeals this year.
- Blackstone’s BCRED fund has yielded 10.5% annually, outperforming bond indexes over three years.
- Mezzanine debt fundraising grew by 55% to $40.6 billion in 2023.
- The private credit sector expects increased hiring.
- The use of earnout provisions in PE deals reached a new high since 2020.
- PE firms’ equity contributions in LBO deals exceeded 50% in 2023… for the first time ever.
- Bain Capital plans a $7 billion investment in India.
Bearish News
- PE’s investment in movies and entertainment plummeted 73.5% to $2.77 billion in 2023, a six-year low.
- Oregon’s Public Employees Retirement Fund experienced its first negative cash flow year since the Global Financial Crisis.
- Amidst turmoil, UK mid-market PE deals fell 10% in 2023.
- Junior bankers are now choosy with PE funds, shunning those with fundraising challenges.
- Regulators are investigating PE valuations.
- The Bank of England issued a warning about valuation lags in private credit.
- Zurich’s $20 billion life insurance portfolio sale failed.
How to invest in PE and Private Credit right now:
Ditch the UK. Consider India instead.
Crypto
Here’s what you need to know:
Bullish News
- Ethereum’s options trading volume hit a record $20 billion in January.
- Cube.Exchange secured $12 million in Series A funding, valuing the company at $100 million.
- The crypto industry raised an $85 million war chest for the 2024 elections.
- BlackRock’s iShares Bitcoin Trust (IBIT) outperformed Grayscale in trading volumes, nearing $3 billion in inflows.
- Coinbase cut fees for high-volume traders.
- Visa and Transak partner to offer instant crypto-to-fiat conversions across 350+ Web3 wallets.
- A Binance Square survey reveals 55% of Europeans use cryptocurrency for everyday purchases,
Bearish News
- Genesis Global Holdco settled for $21 million with the SEC.
- Ripple’s XRP dropped after reports of a hack and the theft of $112.5 million in tokens.
- Binance increased compliance spending to $213 million, preparing for regulatory scrutiny.
- Interest in Monero (XMR) and Zcash (ZEC) is falling.
- Over 50% of 2023’s Ethereum tokens were linked to market manipulation.
- The FTX collapse led to a theft of $400 million, with charges against three individuals in a SIM swapping ring.
- FTX abandoned its restart, choosing to liquidate assets to repay customers instead.
How to invest in Crypto right now:
Get ready for lots of crypto election ads.
NFTs
Bullish News
- Binance’s Inscriptions Marketplace launched trading 60,000+ BRC-20 tokens.
- Art Blocks acquired Sansa.
- NFT indexes, like Nansen’s NFT-500, jumped 10% in January, outperforming Ethereum.
- OpenSea is considering acquisition proposals.
- Mercedes-Benz NXT is venturing into NFTs.
- Serum City’s debut offered Mutant Ape Yacht Club members an exclusive city-building game.
- Solana’s NFT market reached over $62 million in weekly sales at the start of 2024.
Bearish News
- ZachXBT accused Dwight Howard’s “Ballers by Dwight Howard” NFT venture of being a rug pull.
- Adamv.eth, a prominent NFT collector, lost his entire collection to a phishing scam.
- NBA Top Shot is trying to dismiss a privacy lawsuit.
- “Quantum Cats” Bitcoin NFTs by Taproot Wizards faced a launch delay, despite $7.5 million in seed funding and high demand.
- Bitcoin NFT sales dropped over 60% in January.
- MetaZoo Games closed after prolonged scam allegations.
How to invest in NFTs right now:
Be careful with any athlete or celebrity NFT project.
Artwork
Bullish News
- Perrotin and Southern Guild opened new galleries in Los Angeles.
- Sotheby’s art lending grew by 30% in 2023, hitting over $1 billion.
- An acrylic painting by Queen Margrethe II of Denmark heads to auction, estimated at $11,000-$15,000.
- The Rothschild Foundation acquired Guercino’s Moses.
- India’s art market is thriving.
- Christie’s will auction Van Gogh’s “Woman Sewing,” estimated at up to £3 million.
Bearish News
- Anti-Israel vandalism forced Pace Gallery and other NYC art galleries to shut down.
- Christie’s withdrew a Roman breastplate from sale amid provenance concerns tied to a known trafficker.
- Christie’s Old Masters auction underperformed, garnering only $10.9 million, far below the $27.2 million high estimate.
- The Rubin Museum of Art is closing after two decades.
How to invest in Artwork right now:
Pay a final visit to the Rubin.
Vintage Autos
Bullish News
- A Horch 853 Classic fender sold for over $25,000.
- The 2024 Mustang Dark Horse fetched $300,000 at auction.
- Prices are holding steady for the Porsche 997 GT3 RS 4.0, with estimates between £290,000 and £560,000.
- Emirates Auctions hosted its first online classic car auction.
- A collection of 22 vintage Ferraris and Porsches, including a Ferrari 365 GT4 BB valued at $705,000, will be sold after 10 years in storage.
- RM Sotheby’s Arizona auction kicked off 2024 with $22.9 million in sales.
- A restored 1956 Mercedes-Benz 300SL gullwing sold for a record $3.41 million at Barrett-Jackson’s Arizona auction.
Bearish News
- Dean Martin’s custom Cadillac Eldorado shooting brake by George Barris is set to auction for less than a new Hyundai Elantra.
- The notorious unreliability and high maintenance costs for the Maserati Biturbo have led to buyer’s remorse among collectors.
- After 14 years, the Mullin Automotive Museum closed, ending its showcase of 20th-century French cars.
How to invest in Vintage Autos right now:
Consider investing in vintage car parts.
Rare Coins
Bullish News
- Stack’s Bowers Galleries’ NYINC auction sold a 7-kilogram gold coin for $660,000.
- An Oxfam volunteer found a rare 1813 New South Wales Fifteen Pence, estimated to bring in $12,000 at auction.
- A Sacagawea dollar/Washington quarter mule sold for a record $194,062.50 at GreatCollections.
- A 1538 Rincon 8 Reales, among the first Mexican coins, sold for $528,000.
Bearish News
- Collectors are skeptical of a 1920 Lincoln Wheat penny, allegedly linked to Teddy Roosevelt, that is listed on eBay for $990,000.
- The victims of the Rust Rare Coins Ponzi scheme have only received $23.2 million of the $200 million lost.
- The 1914-D Lincoln cent market is plagued by counterfeits.
- US Mint’s collector item sales, including the 2023-S Proof Set, fell, with a notable -407 unit adjustment.
How to invest in Rare Coins right now:
Don’t buy a $990,000 coin unless you are sure that it’s the real deal.
Farmland
Bullish News
- A Missouri farmland sale set a record at $34,800 per acre.
- North Dakota’s agriculture received a $160 million boost for ag tech innovation and food security.
- Non-farmers acquired over half of England’s farmland sold in 2023.
- Bright Tide launched a Regenerative Farming Accelerator to promote sustainable land and ocean farming.
- Iowa’s farmland held its value, with sales surpassing $22,000 per acre.
- An 853-acre Illinois farm sold for $14.4 million, averaging $16,919 per acre, in an online auction.
- Iowa farmland values increased, with sales hitting $18,200 per acre, driven by strong grain prices.
Bearish News
- The USDA was criticized for its antiquated reporting system for foreign-owned farmland.
- Development and population growth threaten to reduce Florida’s farmland by 2.2 million acres by 2070.
- Net farm income in the US is expected to drop by 27%, one of the steepest declines on record.
- A Wasco-area farm saw its value slashed by $2.3 million due to water scarcity.
- Up to 1.7 million acres of North Carolina farmland could be lost by 2040.
- Protests by European farmers intensified.
- US agricultural exports are hampered by delays and rising costs, as shipping disruptions continue.
How to invest in Farmland right now:
Set your sights on Missouri.
Luxury Goods
Bullish News
- Hermès will open a new location in Hong Kong.
- Dior launched $8,500 watches.
- LVMH may acquire a 35-story tower on Fifth Avenue.
- Gen Z’s luxury spending is growing, with 35% seeking high-end goods for immediate gratification.
Bearish News
- Bottega Veneta’s Pouch and Balenciaga’s Hourglass bags have decreased in popularity.
- Patek Philippe discontinued the Aquanaut Travel Time 5164A.
How to invest in Luxury Goods right now:
Start catering to Gen Z’s tastes.
Wine and Spirits
Bullish News
- Cordillera raised $62 million to invest in aging whiskey, aiming to meet the bourbon market’s growing demand.
- Global revenue for bourbon spirits is projected to rise 5.0% this year, fueled by premium whiskey demand.
- Kentucky welcomed the Garrard County Distilling Co., set to produce 150,000 barrels yearly.
- JuneShine’s organic hard kombucha secured a seven-figure investment.
- The tonic wine market is on track to hit $3.1 billion by 2030.
Bearish News
- Diageo’s Latin America sales fell 25%.
- Thieves stole $300,000 worth of rare wines from a Paris collector.
- Brown-Forman received a downgrade from Morgan Stanley.
- Southern Glazer’s will face a federal investigation over possible antitrust violations.
- The rise of GLP-1 weight loss drugs could curb alcohol sales
- Oregon’s health officials suppressed a report suggesting wine tax hikes have little effect on alcohol abuse.
How to invest in Wine and Spirits right now:
Give hard kombucha a try.
Music and Film
Bullish News
- The UK music industry adopted a new code to ensure artists receive clear and accurate royalty statements.
- Trill Entertainment and Santa Anna Label Group partnered to boost artist growth.
- Muus Collective partnered with Warner Music Group and Polygon to explore music and fashion in the metaverse.
- Universal Music Group restructured, positioning Republic and Interscope to lead the market and support artists.
- Amazon MGM Studios acquired the rights to the Celine Dion documentary, I Am: Celine Dion.
Bearish News
- Universal Music Group pulled its catalog from TikTok due to low royalty payments.
- Over 15 billion visits to music piracy sites were recorded in 2022.
- Independent labels are challenging Apple over its music industry payment terms.
- The U.K. music industry’s “boys’ club” culture came under fire after a report exposed misogyny and harassment.
How to invest in Music and Film right now:
Improved artist payouts should make royalties more attractive.
Metals and Gems
Bullish News
- Central banks’ gold purchases and jewelry demand drove gold demand to a 2023 peak despite ETF outflows.
- Copper prices rose 4.2% in February.
- India’s colored gemstones market is projected to hit $1.9 billion by 2033, growing at a 10.5% CAGR.
- Four US states are considering tax exemptions for precious metals.
- Silver demand is forecasted to reach 1.2 billion ounces in 2024, with industrial, jewelry, and silverware demand surging.
Bearish News
- Pandora’s move to recycled metals is putting pressure on miners.
- US precious metals exploration budgets fell in 2023, with gold and silver investments down 5% and 28%.
- Greenbushes, a top lithium producer, cut output amid falling demand and spodumene price drops.
- Base metals are set for a 23% price drop in 2024.
- A-Mark Precious Metals expects a 34.6% earnings fall.
How to invest in Metals and Gems right now:
Sell your gold to the central bankers.
Collectibles
Bullish News
- A sealed case of 1979-80 O-Pee-Chee hockey cards potentially housing Wayne Gretzky’s rookie card, sold for over $2 million at Heritage Auctions.
- Mattel released Super Bowl-themed collectibles, including a special edition Barbie and Uno cards.
- Disney pin trader Mayumi Roehm’s success has spiked sales for the My-D Pins community.
- Pocketpair’s Palworld sold over 8 million copies since its January release.
- A 1916 Babe Ruth rookie card fetched $630,000.
- The UFC’s collectible market is growing.
- A Topps Chrome UFC trading card deal, featuring autographs from champions, will start on February 28th.
Bearish News
- Netflix’s ‘Sneakerheads’ was canceled after one season.
- Adidas plans to sell off its Yeezy stock.
- StockX confirmed layoffs of its CMO and 40 staff members.
How to invest in Collectibles right now:
Expect a flood of Yeezy’s on the market.
Websites and Domains
Bullish News
- Domain Investing is getting more popular on TikTok.
- DnBit’s four-letter marketplace launched with a zero-commission model.
- Namecheap’s 2023 revenue hit $335.6 million, a 15.2% year-over-year increase.
- Gate.io, with 13 million users, partnered with D3 Global to pursue a .gate gTLD.
- Sedo reported PhotoBooth.com sold for €100,000.
- Ethereum Name Service launched ”Gasless DNSSEC”, linking real domains to ENS without gas fees.
- .FM domain queries reached a record 48.34 billion in 2023, a 353% increase over a decade.
Bearish News
- The Amazon Aggregator industry is collapsing, with 40+ firms closed and Thrasio nearing bankruptcy.
- Wix.com’s shares lagged behind the broader market, with only slight gains compared to the S&P 500 and Nasdaq.
- Tax-related Google ads are now a fraud risk.
- A major outage hit Russia’s .ru domains, crippling essential services and banking apps for hours.
- New .ie domain registrations in Kilkenny dropped 14.62% year-over-year.
How to invest in Websites and Domains right now:
Connect your traditional domains to ENS.
That’s all for this week
Cheers,
Wyatt
Disclosures
- We hold BTC and ETH in our ALTS 1 Fund.
- This issue of Alts Cafe was brought to you by our friends at Destiny.
- There are a couple of affiliate links above. If you click them, we may get a couple of bucks.
