☕ Alts Cafe - February 5th 2024
More of what you want; none of what you don't.
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Sent on 05 February 2024 08:03 AM
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More of what you want; none of what you don't.
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February 5th, 2024 Read time: 9 minutes
Hello and welcome to Alts Cafe
Welcome to your customized look at the alt-investing landscape.
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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.
Wyatt
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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
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.
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
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.
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
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.
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:
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,
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
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.
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
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.
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.
Rare Coins
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.
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
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.
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
Herms 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.
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
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.
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
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.
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
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.
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
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.
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
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.
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
If you want to add topics like real estate, startups, crypto, PE, VC, luxury items, music and film investing, collectibles, art, wine and spirits, and/or vintage autos news, click this button.
Add topics to enrich your experience
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.
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