You Think Real Estate Is Bad Now?

Hello and welcome to Alts Cafe

This is your weekly quick-fire analysis on all things Alts investing.

TLDR:

1. You think real estate is bad now? Just give it a year.
2. Even the good news in crypto is pretty bad really.
3. The next 18 months could be the biggest for startups formations ever.

Like these posts? Please give us a shout on your socials, we’d appreciate it.

Wyatt

Macro View

Markets leaped with joy as Congress and the White House reached a compromise on the debt ceiling.

Bullish News

• The US ​sorted​ out the debt ceiling at the 11th hour.
• The Fed is likely to ​pause​ interest rate hikes in June, but there’s a 68% ​chance​ it’ll raise rates in July.

Bearish News

• Real GDP growth is expected to ​slow​ to 0.9% in 2023, down from 2.1% in 2022.
• Deutsche Bank ​predicts​ that default rates will reach 9% for U.S. high-yield debt, 11.3% for U.S. loans, 4.4% for European high-yield bonds, and 7.3% for European loans.

What are we doing?

​ALTS 1​ fund news:

We’re still checking out an investment in the Deathcare space 👀

Real Estate

Bullish News

• Houston, Texas ​was​ the best real estate market in America over the last ten years.
• Concord, NH was the country’s ​hottest​ housing market in April.

Bearish News

• If you don’t ​already​ own a home, you’re going to have to wait awhile.
• Related, mortgages are ​back​ above 7%.
• Office sales are ​down​ 90% in San Jose.
• Commercial real estate transaction volume is ​forecast​ to drop in 2023 to $425 billion, down from $730 billion in 2022.
• Prices across all property types are ​expected​ to decline 8% in 2023 – the largest all-types drop since 2010.
• There are ​only​ 70k homes for sale in the US.
• Deal transaction volume ​was​ the lowest it’s been since August 2020.

How to invest in real estate right now:

I’m still out of the real estate market [no change].

Crypto & NFTs

Here’s what you need to know:

All quiet on the crypto front with both BTC and ETH down slightly.

Treading water:

NFTs saw a slight pop as they continue a nice two-week trend upward:

Bullish News

• Dogecoin “investors” are ​suing​ Elon for insider trading.
• Memecoin mania is driving a record number of people to trade on decentralized exchanges, with more than half a million users ​transacting​ on Uniswap last month.
• Is there a way ​back​ for Moonbirds and the PROOF Collective?
• Coinbase, which is completely unbiased, ​says​ the US needs to embrace crypto for national security reasons.

Bearish News

• Cowen, an investment bank, is ​shutting​ down its crypto division.
• Crypto trading ​volume​ was down 27% MoM in May and clocked its lowest tally in 32 months.
• Traders are losing faith in Binance. They’re ​keeping​ collateral at banks and ​selling​ on-platform assets at a discount.
• Binance is ​cutting​ staff.

How to invest in Crypto & NFTs right now:

It’s accumulation season.

Startups

Bullish News

• Due to the tsunami of tech layoffs over the last twelve months, 2023 and 2024 ​could​ be the biggest two years for company formation — ever.
• Chamath and all his SPAC buddies are getting ​rinsed​ in court.
• Corporate VCs at Salesforce, Amazon, Solana, and Workday are ​jumping​ on the generative AI bandwagon.
• Italy, which has ​banned​ ChatGPT, is setting up a ​fund​ to invest in AI. Che cazzo?
• Former Brazilian Economy Minister Paulo Guedes is ​preparing​ to launch a “green” investment fund. 100% this is somehow a scam.
• Chewy, the online pet retailer that IPO’ed in 2019, ​smashed​ earnings last quarter providing a glimmer of hope for the struggling e-commerce sector.

Bearish News

• It’s ​tough​ out there for seed-stage companies:
  • Fewer than 10% who raised a round in 2022 have secured follow-on funding. Seven in ten who raised in 2021 have yet to raise again.
  • Those who are able to raise take 25 months to do so, compared to 21 months just a year ago.
• Andreessen Horowitz is ​preparing​ to launch a fund-of-funds.
• Zume, which ​raised​ $375 million from SoftBank to automate pizza-making with robots before switching to developing sustainable packaging, has shut down.
• Grocery startups Instacart and Gopuff are ​struggling​.
• Elon has ​destroyed​ nearly $30 billion of Twitter’s value.
• Fidelity also ​slashed​ the value of its stake in Reddit by 41%.
• The idiotic short-sighted ​California​ bill that would force Big Tech companies to pay media outlets for posting and using their news content got closer to reality last week.

How to invest in startups right now:

Gonna keep saying it — stay far away from AI startups that are just ChatGPT skins.

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 very clever friends at ​FameSwap​. If you subscribe to ​Patent Drop​, we get a few bucks.
• We hold a PROOF Collective NFT, BTC and ETC 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.
• We are investigating an opportunity in the Deathcare space for our fund, and will say more as soon as there’s something to share.
• We haven’t yet bought Milo a subscriber base. He seemed happy enough with a set of rip-off Minecraft figurines.