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April 19th - This Week in Alternative Investments
Adam Katz
April 19, 2024
This issue is brought to you by Kara Water, turning air into high quality drinking water since 2021
Headlines
The Bitcoin “halvening” looms
Mortgage rates are back on the rise
Wine & Spirits auctions hit a new high
a16z’s $7.2 billon raise
O.J.’s Ford Bronco could be yours
Plus: Commercial foreclosures double, reasons to invest in private credit, a new collectibles market report, and more.
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Market Updates
The Bitcoin “halvening” is imminent. This refers to a technical event, which is likely to happen today or tomorrow, where the rewards for Bitcoin miners is cut in half, effectively restricting supply of the cryptocurrency. In theory, lowering supply could lead to price increases, but it is also possible that the event has already been priced in, as it has been anticipated for months. Since hitting record-highs last month, the price of Bitcoin has fallen by 15%, with many other crypto tokens falling by 20-25% in the same timeframe. However, the previous three halvings, in 2012, 2016, and 2020 were followed by significant price increases in the subsequent year. Because these halving events are built into the code, the theoretical long-term value of Bitcoin should not be affected, but expect continuing short-term volatility.
Mortgage rates hit their highest level since last November. The average 30-year fixed mortgage rate hit 7.5% this week according to Mortgage News Daily, compared to 6.75% this time last year. The increase was spurred on by concerns that higher-than-expected inflation rates in March will delay any interest rate cuts by the Federal Reserve, perhaps until 2025. It is now looking likely that mortgage rates will remain high for the rest of the year, which is troubling news for a real estate market that has been at a standstill as both buyers and sellers wait for rates to come down.
(Sotheby’s)
Sotheby’s worldwide wine & spirits auction sales reached a new high in 2023. This comes from their annual Wine & Spirits market report that was released last week, which also includes data on sales by wine region and producer. Overall, the auction house achieved $159 million in sales, a slight increase over 2022, but a significant gain compared to pre-pandemic levels. Spirits as a category has seen rapid growth, reaching $33 million in sales in 2023 compared to just $4 million in 2017. Overall, while U.S. buyers led the way with $26 million in purchases, it truly is a global market, with Asian buyers making up 42% of the total and European buyers making up 33%.
Prominent VC firm Andreessen Horowitz raised $7.2 billion to invest in tech startups. The Silicon Valley-based group, also known as a16z, is allocating the raise to a number of different funds, with $3.75 billion going into a growth fund targeting late-stage startups. An additional $2.25 billion is earmarked for AI infrastructure and applications, with $600 million each going into a gaming fund and an “American Dynamism” fund focused on aerospace, defense and manufacturing. This massive fundraise is bucking the wider trend in the industry, which is projected to have its lowest fundraising year since 2015.
Smart Humans Podcast
In this episode, Slava Rubin talks with Republic’s Kendrick Nguyen about the last few years in venture, revisiting his predictions and the massive opportunities that lie ahead.
Explore
More stories worth checking out
(cllct)
O.J. Simpson’s Ford Bronco is on the market: The owners of the car from the most famous “chase” of all time are ready to sell it in the wake of Simpson’s passing, with an asking price of at least $1.5 million after originally buying it for $75,000 in 1996.
Commercial real estate foreclosures are way up: The struggling sector’s woes continue, as March saw 625 foreclosures, which represents a 117% gain from last year - California, in particular, saw a 405% rise.
Four reasons to invest in private credit: J.P. Morgan is pushing back against recent negative headlines about the space, releasing a report highlighting the strong returns and healthy growth the sector has shown.
Joan Mitchell on the auction block: Four paintings by the prominent Abstract Expressionist are being offered by Sotheby’s in May, and could sell for a combined $50 million.
Bolt’s stock buyback lawsuit: The struggling startup saw its value drop by 97% when it offered to repurchase shares from investors, but now a lawsuit alleges that this tactic was a way for co-founder Ryan Breslow to maintain control of the company.
An F1 Legend’s watches: Michael Schumacher’s watch collection will be going to auction in May, including a platinum F.P. Journe Vagabondage 1 expected to sell for over $2 million.
Abra’s Pivot: The former crypto lender, once accused of securities fraud, is no longer catering to retail investors and is now focused on institutional asset management and building a “crypto bank.”
Where Gen Z is buying homes: It’s no surprise that the markets where those 25 and under make up the highest % of buyers are cheaper locations, away from major metro areas.
Collectibles Market Data: Altan Insights released their overview of the sports collectibles market for Q1, with insights on card values, game-worn memorabilia and much more.
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