Hello and welcome to Alts Cafe
This is a quick-fire look at what’s driving your alts week.
What’s on deck today:
- Remember irrational exuberance? It’s back!
- Real estate continues to get worse.
- Crypto took some profits.
- The private credit bubble is upon us.
Table of Contents
Macro View
Bullish News
- Markets everywhere ripped off the back of a rate freeze and ​dovish​ guidance from the Fed.
- Economists are now predicting a ​soft landing​.
Bearish News
- Chicago Fed President Austan Goolsbee says the Fed’s fight against inflation isn’t over yet. NY Fed President John Williams ​said​, “We aren’t really talking about rate cuts right now.”
- Undeterred: The ​CME​ is currently pricing in seven rate cuts in 2024.
- I note this as bearish because it’s stupid, and if that’s what the market is pricing in, we’re in for a fall.
What are the odds?
Forecasts come from ​Kalshi​.
Get $25 to play around with using ​this link​.
What are we doing?
​ALTS 1​ Fund news:
We’re wrapping up the paperwork for our art acquisition.
Real Estate
Bullish News
- ​Mortgage rates​ dipped below 7% on dovish Fed speak.
- Multi-family CRE is dead. ​Long live Multi-family CRE​!
Bearish News
- China’s banking system is ​collapsing​, and the country’s real estate crisis could end up wiping out $4 trillion from its financial system.
- But Zhang Yadong, chairman of property developer Greentown and a man keen not to be disappeared, ​says​ an economic recovery will help trigger a turnaround in the second half of next year.
- The median asking rent in November ​declined​ 2.1% from a year before to $1,967. It’s the biggest annual drop since February 2020.
- Rents are set to continue ​dropping​ through 2024.
- Homeowners in Florida and Pennsylvania have jumped on the realtor commission lawsuit ​bandwagon​.
- Related, National Association of Realtors membership ​declined​ 6k in one month.
- Private equity fund manager and real estate investor Grant Cardone has ​bad news​ for real estate investors.
How to invest in real estate right now:
Don’t
Startups
Bullish News
- Legal AI startup Harvey was ​valued​ at $700 after raising a round co-led by Kleiner.
- Blue Origin will begin ​launching​ spaceships again.
- High-end pet food startup The Farmer’s Dog is ​working​ with JPMorgan and other investment banks to raise hundreds of millions of dollars by early next year.
- Last week, ​Artis Ventures​, ​BoxGroup​, ​Playground Global​, and ​Singular​ all closed on funds, while ​Partech​ said it was launching a €360 million venture fund.
Bearish News
- One-click checkout company Bolt is ​axing​ more staff.
- Proptech investing was ​off​ 42% YoY and 64% from 2021.
Disgracedbaseball player ​Alex Rodriguez is launching a SPAC.​
How to invest in startups right now:
Obviously, avoid A-Rod’s SPAC.
Private Equity and Private Credit
Bullish News
- After a banner year for private credit fundraising, almost half of investors say they plan to ​increase​ their private credit allocations in 2024.
- UBS has ​encouraged​ private wealth clients to increase exposure to alts to 22% of their portfolio.
- Germany’s Bundesliga is ​moving​ forward with its €1 billion media equity sale.
Bearish News
- European PE volume was its ​lowest​ in a decade.
- Apollo is planning a private credit ​product​ with $2,500. Once the plebes get in, the market is done.
How to invest in PE and Private Credit right now:
I feel a credit bubble.
Crypto & NFTs
Here’s what you need to know:
It was a tough ​week​ for crypto, but it seems to have leveled off over the weekend.
Sentiment pulled back along with prices.
As ever, NFT prices tracked Ethereum. Notably, NFTs are up 26% this year.
Bullish News
- North American investors and money managers expect the launch of spot bitcoin ETFs to ​drive​ strong institutional demand for crypto.
- Another bullish prediction for ​Bitcoin: $75k​ in 2024.
Bearish News
- US Senator Elizabeth Warren’s anti-crypto bill is gaining ​steam​.
- Nearly $3 million worth of Bored Apes were ​stolen​ from NFT Trader. Nearly all of them were recovered.
- ​Venom Ventures Fund​ announced its arrival in January, claiming it had $1 billion to invest in web3 startups. It’s not been heard from since.
- ​SafeMoon​ filed for Chapter 7 bankruptcy on Thursday. Last month, the company’s execs were arrested on fraud, wire fraud, and money laundering charges.
How to invest in Crypto & NFTs right now:
It’s still accumulation season.
That’s all for this week
Disclosures
- This issue of Alts Cafe was brought to you by our friends at ​Solenic Medical​.
- 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 couple of bucks.
