- The Hoot
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- The Hoot #13
Scatt's Seeds for Thought:
🌱 Open AI's GPT-4 🤖
🌱 USDC's Depegging Scare 🫠
🌱 Ryan Reynolds' Billion Dollar Deal ☘️
🌱 Australian Open Uses NFTs 🎾
Meme of The Week
Year-to-date Market Performance:
S&P 500: 2.00%
Dow: 3.86%
Nasdaq Composite: 11.12%
Bitcoin: 62.05%
Ethereum: 45.39%
Scatt Capital’s Fortune Strategy: 25.84% (Since Inception: 21.50%)
Lots of news & data-driven activity this week.
Consumer Price Index for February (an important inflation measure) came in exactly in-line with average expectations of a YoY increase of 6.0%, down from last month's reading of 6.4%. This shows the Fed's actions of contracting the economy are working - let's hope they keep this in mind next week.
Producer Price Index for February (another inflationary measure) came in at 0.3% MoM. Average expectations were -0.1%. Inflation still slightly hot.
Retail sales for February came in line with expectations of -0.4% MoM. This is a much better reading than the December and January readings which were high.
February's Housing Starts jumped 9.8% MoM, versus an expected 0.1%. Building Permits soared 13.8% MoM too (0.3% expected).
The European Central Bank raised rates by 50 bps (0.50%).
UBS acquired struggling bank Credit Suisse for $3.2bn this weekend.
Economic Data Next Week: Existing Home Sales; FOMC decision.
Open AI's GPT-4 🤖
Microsoft's OpenAI just released the latest version of their AI chatbot, GPT-4 🤖. If you thought the regular old version of ChatGPT was cool... this is like it's bigger, faster, better-looking older brother (and 571 times more powerful) 💪🏼. So what's special about this new version? Unlike the older models, the new GPT-4 is now able to integrate video, audio and images as both inputs and outputs. In English? Provide any picture, video or audio file and it'll summarize, describe or completely transform the file and punch it back to you... I'm not sure whether to be excited or scared at this point 🥲..
A lot of big companies have already started adopting the technology into their businesses, including Meta, Canva, Shopify, top law firms, and Citadel (yes, the best performing hedge fund in history). Rumors are that billionaire Ken Griffin (Citadel's Founder & CEO) is seeking an enterprise-wide license for ChatGPT stating that the technology has been INSTRUMENTAL in Citadel's success. They broke records pre-ChatGPT, just imagine them with it 🫠.
Cool things that GPT-4 can do (that we know so far):
It can do your taxes 🧾
It will sue spam callers for you 📞
It can turn a basic, simple sketch (on a piece of paper) into a fully-functioning website 👨🏻💻
In crypto, it can analyze smart contracts & identify vulnerabilities, helping prevent fraud and increasing safety for users 🔐 (a HUGE win❗️)
Each upgrade will get better, stronger & faster. We believe that these AI models have the ability to completely transform businesses through streamlining inefficiencies and increasing productivity 📈
USDC's Depegging Scare 🫠
If someone says Silicon Valley Bank one more time... I might just pour my life savings into bitcoin, and never look back 🙃. On a serious note, USDC is a popular stablecoin: a cryptocurrency that is designed to stay pegged to a fiat currency, most likely the US dollar 💵. It does this by using blockchain algorithms and smart contracts to manage its supply. There are several stablecoins in the digital asset space, but USDC is the 2nd largest by market cap (behind USDT), and Circle is the company that issues USDC coins. Now Circle was one of the large depositors who had cash at SVB (approx. $3.3 bn or 8% of the USDC supply). As a result of the bank run (and possible loss of Circle's funds), people started to panic sell 😰.
They started swapping/exchanging their USDC for other coins like Wrapped ETH, driving down the value of USDC to as low as $0.89 📉. Once everyone realized everything was going to be fine and the financial system wasn’t going to implode, USDC shot back up to $1.00 again 😮💨.
Stablecoins are actually an incredibly useful and important part of the crypto ecosystem. A few benefits include: transparency; transactional speed; and the fact that they're borderless. They serve as an alternative to using other highly volatile coins like BTC and ETH as a medium of exchange, and are a great bridge to facilitate mass adoption (it can be a nightmare buying crypto via fiat, and swapping out to fiat EVERY single time 😤).
The interesting part? When people were panic selling, they started using DECENTRALIZED exchanges (like Uniswap & Curve who both had record daily volume of $12 and $8bn respectively❗️). With all the craziness that's unfolded over the last few weeks/months, people are finally realizing that decentralized finance might be the solution 😍
Ryan Reynolds' Billion Dollar Deal ☘️
Ryan Reynolds is certainly one of the funnier people I've come across in my short life. His big movies include Deadpool; Free Guy; Red Notice; Green Lantern; The Proposal; Pokemon... the list goes on. Scatt's favorite is Red Notice 🤫 ... But as good as he is on-screen, there is something you don’t see: his entrepreneurial flair. Ryan co-owns several businesses including the Ottawa Senators 🏒; Wrexham AFC ⚽️; a production & marketing company 🎥 ; Aviation Gin 🥃 (which he sold for $610 million in 2020); and a telecommunications company: Mint Mobile ☘️.
Telecommunications giant T-Mobile 📞 announced on Wednesday last week that they would be acquiring Mint Mobile in a deal that valued the company as much as $1.35 billion 🚀. Ryan's net worth is estimated to be close to $350 million after the T-Mobile deal. The deal, which is expected to go through later this year, will reward Ryan with $70m in cash & $200m in T-Mobile stock 🤑
Australian Open Uses NFTs 🎾
I used to think that watching Rafael Nadal play was pure art... now I realize that the court he was standing on was also art (in a way). For you non-tennis people, there is a type of technology used in the game called Hawkeye, which basically consists of several cameras and computers, splitting the court into thousands of tiny little plots to track where the ball lands. Players can hit the ball up to 150 mph (240km/h), making it hard for the human eye to accurately track 👀.
So each of these plots is tied to a specific NFT. Therefore, whenever Nadal hits that belter game-winning shot in the far left corner, the NFT, tied to the plot on which the ball landed, is updated with info like the player's name, tournament round, type of shot, speed etc. 🎾
And NFTs that have recorded huge historic moments (like a tournament-winning shot) can absolutely skyrocket in value 🚀. To give you an idea, an NFT tied to one of Nadal's game-winning shots sold for a more-than 4,000% return 🫠. The holders of these NFTs also have access to exclusive benefits, rewards & merchandise; for eg. someone just received 2 tickets to next year's final because their NFT was tied to Novak Djokovic's winning shot! 🎟️
Keep plugging away, banking crisis or not.
See you next week for another update. 🦉
DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.