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- July 12 - This Week in Alternative Investments
July 12 - This Week in Alternative Investments
Adam Katz
July 12, 2024
Brought to you by Hiive, building the leading private market index
Headlines
Promising inflation news, finally
A $2 million baseball card heist
Goldman’s AI doubts
Skybridge mooches on redemptions
NFL goes institutional
Plus: Online startup investing at halftime, a possible Bitcoin rebound, non-alcoholic beer pops off, crypto’s power powwow, and much more.
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Performance
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*as of end of day July 11
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Market Updates
Topps 1952 Mickey Mantles were among $2 million worth of baseball cards stolen in a brazen daylight heist. The theft, which can be seen in security footage appearing to indicate four thieves, took place at the Dallas Card Show last week. The thieves took a case that included six 1952 Topps Mantles, among the most sought-after “grails” in the asset class, one of which worth $175,000. The victimized dealer, Ashish Jain, is offering a $70,000 reward for information leading to the recovery of the cards. The fact that the theft was high-profile, and that valuable cards are graded with unique serial numbers, means that it should be difficult for the thieves to sell the cards. Still, the clearly premeditated plan to steal these items shows that collectibles are valuable assets and need to be treated as such.
Goldman Sachs and others are worried about an AI bubble. The bank released a report entitled “Gen AI: Too Much Spend, Too Little Benefit?” that outlined doubts over the technology’s economic upside and exorbitant costs. Copious amounts of VC money is flowing into AI companies, with nearly $50 billion raised in 2023, and an estimated $1 trillion in CapEx spending is expected over the next few years. Because the major AI startups are far away from profitability but require massive spending, the payoff will have to be spectacular, and it will take years to find that out if that happens. Right now, there is not a clear path to the type of payoff that would justify the spend. In the meantime, the bubble is likely to keep growing and there are returns to be made even if it ultimately bursts — as long as investors get out in time.
(Reuters)
Inflation fell for the first time in four years. The Consumer Price Index (CPI) declined by 0.1% in June, and has risen by 3% year-over-year, inching closer to the Federal Reserve’s stated 2% target. Core CPI, which excludes food and energy, rose by 0.1%, the smallest increase since August 2021, and is up 3.3% year-over-year. This has led financial markets to anticipate a Fed rate cut in September, with two rate cuts in total expected this year. This report offers promising news that the economy’s struggles with inflation may be coming to an end, and a return to a lower rate environment could be around the corner.
A crypto roundtable held in Washington D.C. led to optimism from its attendees. Hosted by Congresswoman Ro Khanna, the meeting was designed to show that the current administration is listening to industry representatives and is willing to work to assuage their concerns. Attendees included Brad Garlinghouse, the CEO of Ripple, Mike Novogratz, the CEO of Galaxy, as well as Mark Cuban, multiple members of Congress and a top Biden advisor. However, just after the meeting, Congress failed to override the President’s veto on a bill that would have overturned an anti-crypto SEC policy.
Smart Humans Podcast
In this episode, Slava Rubin talks with Affirm CEO and Founder Max Levchin about entrepreneurship, angel investing, and the future of finance.
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More stories worth checking out
📝 Top Stories
(Kingscrowd)
Online startup investing recap: Venture crowdfunding investment platform Kingscrowd released their 2024 H1 report on the space, which saw $306 million invested, an 8.7% decline versus 2023. The three platforms that raised the most capital were DealMaker, Wefunder and StartEngine.
NFL goes institutional: Acknowledging the astronomic prices franchises can fetch, the National Football League is following in the footsteps of other professional sports leagues, and considering allowing private equity to buy in up to 10% ownership of teams.
Jordan autograph controversy: Six rookie cards signed by Michael Jordan earlier this year were graded as double perfect tens, the first of their kind. But there are questions about how visually appealing the signatures are, as well as concerns about market manipulation and the fact that grading company PSA was involved with the secret signing session.
Bitcoin mining concerns: Residents of a small town in Texas have been experiencing severe health issues, and are blaming a nearby Bitcoin mine that routinely exceeds the legal limit on noise.
🎨 Art
(Christie’s)
Mind to AI: Christie’s is selling a work by the French collective Obvious that was created directly from someone’s mind using MRI machines and AI technology.
Jim Carrey’s collection: Bonham’s is auctioning 35 pieces from the comedian’s personal collection at the end of the month, including artwork by David Hockney and Kenny Scharf.
⚾ Collectibles
(Bonham’s)
A pricey Fender: Irish rock star Rory Gallagher’s 1961 Fender Stratocaster is heading to auction this fall with an estimated value of $900,000 - $1.3 million, and is considered the most iconic Stratocaster in rock history.
Leia’s bikini: A number of iconic science-fiction movie props, from Star Wars, Star Trek, Marvel movies, and others, are going on the block later this month at Heritage auctions.
Apex is coming: The largest stegosaurus skeleton ever found, “Apex,” is being auctioned at Sotheby’s next week with an estimated value of $4-6 million.
🪙 Crypto
An August rebound?: A report from JPMorgan foresees better times ahead for the crypto market, as liquidations from Mt. Gox, Gemini and the German government should wind down after July.
Germany’s Bitcoin stash: Speaking of, the German government seized nearly 50,000 BTC in January and have been selling thousands per week, one of the reasons the market has fallen recently.
Staked Ethereum: As the markets predict Ethereum ETFs are coming in the next two weeks, the amount of the cryptocurrency that is being “staked,” a way that holders can earn rewards for locking up their coins, is approaching all-time highs.
Skybridge gating the exits: Despite the year’s rally, Skybridge’s main fund-of-funds allocated to crypto, venture and hedge is said to face 70% of its investors looking for redemptions, which is 10x more demand than it can honor.
💵 Private Credit
Smaller firms struggling: Private credit funds with less than $1 billion of assets raised the least amount of cash on record last year, highlighting the tighter margins created by greater competition in the industry.
🏡 Real Estate
Strong market for luxury: The Global Luxury Mid-Year Outlook from Christie’s found that scarcity of supply and the ability of high-net-worth individuals (HNWI) to remain unaffected by macroeconomic conditions has left the luxury market in good shape.
Farmland values plateauing: The latest report from the Farmers National Company points to high interest rates and declining grain markets as the cause of the stalled market, though there is still high investor demand for farmland, and supply remains limited.
Improving homebuyers’ sentiment: The Fannie Mae Home Purchase Sentiment Index (HPSI) rose 3.2 points to 72.6, as even though only 19% of consumers think that it’s a good time to buy a home, up from 14% in May.
🚀 Venture Capital
Athletic Brewing raise: The leading non-alcoholic brewer raised $50 million on an $800 million valuation, double its previous valuation, and showed that venture is not solely about investing into tech.
Digital health funding: Startups in the sector raised $5.7 billion across 266 deals in the first half of 2024, putting it on track to surpass last year’s total and even edge out pre-pandemic totals from 2019.
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