- The Hoot
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- The Hoot #14
Scatt's Seeds for Thought:
π± Bank Shopping ποΈ
π± Wall Street's Cheat Sheet π
π± Bitcoin's Million Dollar Bet π€πΌπ²
π± LinksDAO bought a $905k Golf Course π΄σ §σ ’σ ³σ £σ ΄σ Ώβ³οΈ
Meme of The Week
Year-to-date Market Performance:
S&P 500:Β 3.24%
Dow:Β 2.74%
Nasdaq Comp.:Β 12.97%
Bitcoin:Β 65.82%
Ethereum:Β 44.44%
Scatt Capitalβs Fortune Strategy:Β 20.39% (Since Inception:Β 16.07%)
7-Day Change in Crypto Market Cap: -$13bnΒ
The Federal Reserve raised rates by 25bps (largely expected). This was then followed by a rather ambiguous speech statingΒ that peak rates would likely be 5.1% by Dec. 2023. The market does not agree and is pricing in rate cuts before year-end.
The Bank of England raised rates by 25bps.
Existing Home Sales jumped 14.5% vs. an est. 5% as house prices dropped for the first time since 2012.
Initial jobless claims came in at 191k against 198k estimates, highlighting the tight labor market (what else is new?).
Durable Goods (an industrial activity measurement)Β for February came in at -1% MoM against an estimate of 0.2%.
Data for the Week Ahead: PCE (important inflation measure); personal spending; and pending home sales data.
Bank Shopping ποΈ
"Bank Failure" became the most searched for thing on Google between the 18th and 21st of March... and if you listen closely between 9 and 11pm I think you can actually hear Joe Biden and JeromeΒ Powell crying themselves to sleep π« . After the initial 3 bank collapses (Silvergate, SVB, Signature), we got news that Credit Suisse (CS) was next up on the chopping block πͺ But hold on... this presents a slightly bigger problem than a few regional banks failing. CS is considered a Globally Systemically Important Bank (GSIB), basically meaning the feds will move heaven and earth to prevent it from failing π
Long story short... Credit Suisse has been on a bad run for a while, and SVB sort of sparked caution in the bank (as it did with pretty much every other financial institution on earth), and its biggest shareholders (Saudi National Bank) basically said it wasn't prepared to help πΆβπ«οΈ Shares plummeted to all-time lows, and the Swiss Feds π¨π essentially changedΒ theΒ rules and forced a sale to UBS for $3.2bn. AND in the process, they completely wiped out some BOND holders, while stockholders received shares in UBS... this isn't a great precedent to set π¬ Its a known fact that bondholders are better-protected than shareholders. I guess "things that have never happened before, happen all the time..."
And when I say Credit Suisse was 'on a bad run'... I mean they got caught laundering Bulgarian cocaine cartel money-kinda bad. To put it into perspective, they've been finedΒ more than 50 times since 2000 for a total of $11.4bn , which works out to an average of $570 million/year π€―.
On a separate note, headlines will tell you that Signature Bank 'collapsed'... but truth is the Feds stepped in and seized it, stating they "anticipated an imminent collapse". They have ALWAYS, however, been skeptical of Signature's business dealings in the crypto space, and guess what just happened?Β New York Community Bancorp. just acquired all of Signature Bank, EXCEPT its crypto division (responsible for ~15% of revenue) π€¬. Did the Feds just disguise a crypto raid as part of a bank collapse? π§
Wall Street's Cheat Sheet π
So a couple of years ago, 'Wall Street' (probably a group of economists & traders/investors) got together and created a "cheat sheet". The sheet basically details the emotions and psychology in a full market cycle from hope -> thrill -> euphoria -> anxiety -> panic -> and then finally depression (Hey' Wall Street', it's probably not a good idea to END the chart on depression - we're trying to encourage people to invest here...)Β
So basically, a guy on Twitter (@intocryptoverse) went ahead and placed the total crypto market cap (since 2019) over the Cheat Sheet chart, and they look ALMOST IDENTICAL π€²πΌ
Going off this, we would be placed somewhere between the anger and depression stages. IF this is true (don't take it as gospel - do your own research please), this could present a REALLY good buying opportunity ππ
Bitcoin's Million Dollar Bet π€πΌπ²
Balaji Srinivasan is an American entrepreneur and investor. He co-founded Counsyl (sold it for $300m+), was the Chief Technology for Coinbase (the largest U.S.-based crypto exchange), and was a partner at Andreessen Horowitz (one of the most prominent venture capitalists in the world). He also predicted how COVID would play out... π
Well he's got another prediction: Bitcoin will be worth $1m in 90 days π³ And to put his money where his mouth is, he made 2 x $1m bets. His reasons are:
π¦ Banks are in trouble (particularly the U.S. based ones).
πΈ The Federal govt. is printing even more money to save problem #1 (what else is new?).
π He thinks this will all lead to hyperinflation (when the prices of goods & services skyrockets, and the value of the USD plummets).
π° More people will look to bitcoin as an inflation hedge (with the value of the USD plummeting).
Our thoughts? This is absolutely ridiculous. He seems like a great guy who's done well for himself, but the odds of bitcoin 36x'ing (3,600%) in the next 3 months aren't worth a $1m bet, let alone 2. HOWEVER we think he's HALF right, in that the price will likely appreciate (maybe even to $1m/coin), but certainly NOT on that timeline β³
A lot of people have some assumptions with the first being its a marketing stunt to attract attention (it's trending EVERYWHERE, so if it is, it's a HUGE success); and the second is that it's his 'cost of doing business' (more likely scenario in our eyes). Consider he has $100m in bitcoin (which is not an unrealistic assumption), if his stunt moves bitcoin move from $27k to $30k, he makes ~$11m. Meaning he would walk away with $9m (after losing $2m in his bets), but this is all hypothetical of course... π
LinksDAO bought a $905k Golf Course π΄σ §σ ’σ ³σ £σ ΄σ Ώβ³οΈ
In the digital world we have structures called Decentralized Autonomous Organizations (DAOs), which are essentially bottom-up entities with no central authority. Members of the community own assets, sometimes NFTs or other assets known as 'governance tokens', and they use these to make decisions through votes (the more you own, the more influence your vote has). Now there are TONS of DAOs out there for every kind of activity such as fishing, tennis, hunting...and Golf ππ»
LinksDAO, one of the most prominent Golf DAOs, has just gone ahead and purchased a real golf course (Spey Bay, Scotland) worth $905k β³οΈ They launched a year ago with the main goal of buying one, and ended up raising the funds through the sale of their NFTs π₯
LinksDAO also gives members access to 500+ golf courses around the world π Prospective members can buy the NFTsΒ associated with LinksDAO and become apart of the community, but the floor (entry) price is $3,000. The cool part? Even Steph Curry (the NBA Star π) bought himself one last year π€πΌ.
No bank collapses in the last 7 days - time to celebrate πΎ
See you next week for another update. π¦
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.