Hello and welcome to Alts Cafe
This is everything you need to know about what’s going on in the world of alternative assets, best enjoyed with your morning coffee.
Let’s go!
Table of Contents
Macro View
It was a short and quiet week on the US equities front.
Meanwhile, things got spicy in China as the CCP faces the most significant threat to its authority since Tiananmen Square .
Incredible footage from #China’s #Shanghai, where countless people gathered at a road called “#Urumqi road,” chanting a slogan “Step down, the Communist Party” very loudly. https://t.co/6YBpfbxsox
— William Yang (@WilliamYang120) November 26, 2022
While I think the chances of China’s CCP collapsing are remote at best, there are a number of possible outcomes to this turbulence that could destabilize the global economy. Definitely keep an eye on the situation:
I expect things to get much worse before they get better.
Bullish News
- Black Friday sales set a record in the US despite concerns about inflation, the economy, and tech layoffs.
- Federal Reserve officials earlier this month agreed that smaller interest rate increases should happen soon.
Bearish News
- Genevieve Roch-Decter lays out a compelling case that the US is in for a heck of a recession in 2023. I agree.
- Europe will get hit hardest by the global slowdown, with the UK getting it worst.
- Institutional money is betting on a big decline in the US equities market.
What are we doing?
ALTS 1 fund news:
Nothing new here.
Crypto
Here’s what you need to know:
Crypto is shrugging off the FTX contagion and getting back to business as usual, more or less.
The Fear and greed index is looking bullish, ticking back up to 28 from last week’s low of 21.
Bullish News
- Salvadoran President Nayib Bukele is doubling down on his Bitcoin bet despite the massive price drop, promising to buy one Bitcoin a day starting last week.
- Binance is committing $1 billion to establishing an industry recovery initiative (IRI) to invest in companies from the digital assets sector.
Bearish News
- New York Governor Kathy Hochul has signed a bill cracking down on crypto mining in the state. The bill imposes a two-year moratorium on new permits for proof-of-work mining operations that rely on carbon-based fuel to power their activities.
- Only $740m worth of assets have been tracked down from the smoldering heap of excrement that is FTX.
- Regulation is coming .
- The Argentina and Portugal fan tokens from Socios are down 50% since the start of the World Cup.
If you “invested” in the Argentina and Portugal fan tokens ahead of the World Cup, you’d have lost 50% of your money in the last seven days.
— Wyatt Cavalier (@itiswyatt) November 28, 2022
Better to light half your money on fire. pic.twitter.com/OxncaYPdFN
What to do with that info:
Buy and hold.
Real Estate
Here’s what you need to know:
All eyes are on the Case-Schiller Index for September, which comes out this Tuesday.
Bullish News
Bearish News
- Big tech layoffs will probably put downward pressure on some of America’s biggest markets.
- Home sales fell for the ninth straight month in October, while new home starts dropped over 4%.
- Investor buying of homes tumbled 30% in the third quarter, a sign that the rise in borrowing rates and high home prices that pushed traditional buyers to the sidelines are causing these firms to pull back, too.
- Office occupancy rates are half pre-Covid levels in the UK, at just 30%. England’s office stock is falling at the fastest rate for 20 years.
What to do with that info:
Don’t get divorced, move for a job, or anything else that’ll trigger a forced home sale.
NFTs
Here’s what you need to know:
NFTs followed ETH up last week as the FTX contagion cleared up a bit.
Bullish News
- Royal , one of the biggest names in the burgeoning music NFT space, has finally launched its long-promised marketplace for music royalty rights.
- ApesCoin DAO is launching an NFT marketplace.
Bearish News
- Yuga Labs (Bored Apes) is under investigation again .
- Metamask announced it will track user data for all 21m of its account holders.
- NFT trading volume continues to decline .
What to do with that info:
We’re starting to look at undervalued NFTs from blue-chip projects.
Startups
Here’s what you need to know:
I spoke about this a bit last week, but the startup economy is about to grow up real fast.
Easy money’s gone, cash flow is king, and profits are a thing again. So is the case with Pipe, which has ousted its three founders, and is on the hunt for an adult to take the reins as CEO.
Unlike the last couple of years, 2022 and beyond will punish “growth at all costs” mindsets.
Investors are putting a premium on disciplined capital management.
Any startup that brags about being the “fastest growing X”🚩🚩🚩
— Michael Karnjanaprakorn (@mikekarnj) November 24, 2022
High likelihood of imploding within the next 12 months
Don’t worry, we’ll be back to throwing money at ten-minute grocery delivery again by 2024.
But it’ll be powered by AI this time.
Bullish News
- Funds led by and focussing on non-traditional backgrounds are on the rise .
Bearish News
- Investment in crypto startups was down 50% from September to October.
What to do with that info:
Tighten up your belt and focus on cash.
That’s all for this week. Hope you enjoyed your coffee and this edition of Alts Cafe.
Any comments, questions or concerns – let us know.
Cheers,
Wyatt
