The $227 billion sports memorabilia market

Hello and welcome to Alts Cafe

This is a quick-fire look at what’s driving your alts week.

TLDR:

  1. Despite solid earnings, the US stock market threw up all over itself
  2. Everyone thinks rate cuts are coming.
  3. The real estate market is beginning to segment itself into winners and losers
  4. There’s big trouble in actual China
  5. The sports memorabilia market could hit $227 billion by 2032

Macro View

It was a tough week on the markets despite lots of pretty good news.

Bullish News

Bearish News

  • Ratings agency Fitch ​thinks​ US banks are in big trouble.
  • Bond yields have hit a 15 year high, ​crippling​ lending markets.
  • Argentina ​devalued​ its currency by nearly 18% and hiked its benchmark interest rate by 21% to 118% following a shock primary election win by far-right libertarian Javier Milei.

Forecasts

34%

​Chance of Fed rate hike in 2023​

3.21%

​August YoY inflation​

3%

​Chance of a US recession in 2023​

What are we doing?

​ALTS 1​ Fund news:

Nothing here

Real Estate

Bullish News

  • Total value of US homes hit a record $47 trillion in June
    • But American ​homes​ are still 40% cheaper than UK equivalents.
  • Contrary to a ​widespread​ figure, local and regional lenders don’t hold 70% of US commercial real estate debt. It’s closer to 32%.
  • ​Demand​ for high-end apartment rentals is outperforming other segments in recent quarters.
  • RE funds are ​raising​ billions to scoop up distressed properties.
  • US housing ​inventory​ has nearly doubled since its January 2022 low.

Bearish News

  • The 30-year fixed rate ​climbed​ to 7.09%, the highest rate in 20 years.
  • A spike in home ​construction​ in wildlife-adjacent areas in California is increasing wildfire risk and insurance liabilities.
  • US office ​vacancy​ was 18.2 percent last quarter, the worst in 30 years.
    • But only 10 percent of all U.S. offices account for 80 percent of the occupancy decreases since the pandemic
  • The Chinese real estate market ​continues​ to deteriorate.
    • And the rest of the Chinese economy is in ​big trouble​ as well.
    • And the number of Chinese hedge funds has ​declined​ for the first time since 2012.
    • And Zhongzhi Enterprise Group, which manages $137 billion, ​announced​ a probable debt restructuring.
    • And China Evergrande Group ​filed​ for Chapter 15 bankruptcy in New York.

How to invest in real estate right now:

Wait.

Startups

Bullish News

Bearish News

  • Investment in proptech was ​down​ 66% in the first half of 2023.
  • Tesla is ​slashing​ prices in China again.
  • Fintech startup Ramp is ​raising​ several hundred million from investors at a $5.5 billion valuation, 32% lower than its previous valuation.
  • Vesttoo, an Israeli startup that aims to use artificial intelligence in the insurance industry, ​filed​ for bankruptcy.

How to invest in startups right now:

The tide has started to go out on AI startups…I expect to see a significant percent fail through the end of 2023.

Crypto & NFTs

Here’s what you need to know:

It was a bad week.

A really bad week.

A really really really bad week.

Bullish News

  • SBF is going to ​jail​ for witness tampering — a really really ​bad​ jail.
    • And he used money he stole from FTX customers to make more than $100 million in political campaign contributions
  • Coinbase ​secured​ approval to offer cryptocurrency futures to U.S. retail customers.
  • ​BitGo​, a provider of wallet solutions, ​raised​ $100M in Series C funding, at $1.75 billion valuation.

Bearish News

  • Bitcoin ​fell​ by 11.5% from Aug. 16 to Aug. 18, resulting in $900 million worth of long positions being liquidated and causing the price to hit a two-month low.
  • Binance is ​shutting​ down its buy-and-sell service Binance Connect, formerly known as Bifinity.
    • And it ​filed​ for a protective court order against the U.S. Securities and Exchange Commission.
  • Prime Trust ​filed​ for bankruptcy.
  • A group of investors have sued Sotheby’s ​saying​ the auction house took part in “misleading promotion” to boost the profile of BAYC NFTs.

How to invest in Crypto & NFTs right now:

It’s accumulation season.

Quick Hits

Art

Christie’s and Sotheby’s are both ​vying​ to secure the estate of Emily Fisher Landau, the noted art collector who ​died in March​ at the age of 102.

The estate is estimated to fetch up to $500 million, which could turn around a ​fairly awful year​ for art auctions.

In May, one of the season’s ​most-anticipated auctions​, of the estate of collector ​Gerald Fineberg​ at Christie’s New York, ​totaled just $153 million​, compared to an estimate of $163 million to $235 million.

Sotheby’s UK profit was ​off​ 24% last year.

Vintage Autos

Sotheby’s is auctioning off a 1962 Ferrari 330 LM / 250 GTO. It’s expected to ​sell​ for for up to $60 million.

Meanwhile, a ​burnt out wreck​ from the 1960s sold for £1.5 million.

Burnt-Out Ferrari Ignites Auction: Fire damaged Ferrari wreckage from 1960s sells for £1.5 Million
Still worth 400x more than my car.

Sports Memorabilia

A ​report​ out this week says the memorabilia market could grow 22% per year through 2032 to reach $227 billion.

Related, a pair of Mickey Mantle items sold for more than $9 million ​combined​ late Saturday night in Heritage Auctions’ Summer Platinum Night sale.

The most expensive thing in my closet.

A 1952 Topps card graded SGC 9 sold for $4.5 million, but that was topped by a home ​flannel​ worn by Mantle in 1958, which netted $4.68 million.

On a less happy note, the WSJ has a piece this week on cash-strapped collectors being ​forced​ to liquidate their collections.

That’s all for this week. I hope you enjoyed your coffee and this edition of Alts Cafe. ☕

Cheers,

Wyatt

Disclosures

  • This issue of Alts Cafe was brought to you by our friends at xxx and xxx.
  • We hold BTC and ETH in our ​ALTS 1 Fund​. Apart from those, we don’t own any other assets or vested interests in the companies mentioned in this email.
  • There are a couple affiliate links above. If you click them, we may get a couple bucks.

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Author

Picture of Wyatt Cavalier

Wyatt Cavalier

With a background in finance & intelligence analysis, Wyatt has an unhealthy obsession with finding the best blue chip investment opportunities. His previous newsletter, Fractional, resonated deeply with subscribers, bringing actionable insights and unconventional trading strategies. His rare book collection specializes in banned editions. He currently lives in Spain with his beautiful wife, three young boys, and dog Monty.

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