🍋 a16z's Crypto Bet Goes South

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Good Morning! Analysts looking to buy their first Rolex will have to wait as Wall Street bonuses are expected to plunge by 22% this year. NYC hopes revamping Park Avenue will be its secret weapon in keeping high finance from flocking south. Several new billion-dollar office buildings are slated to open soon.

Elon Musk in classic Elon fashion showed up at Twitter HQ yesterday carrying a kitchen sink– let that sink in. Musk is scheduled to close his Twitter deal by the end of the week. Meta fell another 20% after-hours, and Credit Suisse will sell its securitized-products group to Apollo and Pimco.

It's sweatpants season 24/7/365, which means y'all need to have Public Rec’s All Day Every Day Pant.

1. Story of the Day: a16z's Crypto Bet Goes South

Crypto bulls have had a tough go of it lately. Crypto market has been in a free fall this year, wiping billions of dollars in value and consumer demand. No firm has been hit harder by the crypto winter than Andreessen Horowitz (a16z).

Andreessen Horowitz was one of the first big VC firms to invest in crypto and blockchain technology.

Andreessen saw potential in Bitcoin, back when it was still some folks on message boards calling themselves "satoshi" and talking about how they were going to change the world. The firm made a killing for investors when it bought Solana and Coinbase. At the end of last year, their signature fund had multiplied their initial investment 10.6x.

But the crypto winter took no prisoners. By some estimates, Andreessen’s funds have lost 40% in value this year. The firm is down over 80% on its Coinbase and Solana investments alone, and partners have to appease nervous investors who think the firm pushed too far toward crypto.

Consumer demand for crypto investments has waned in 2022. The lack of crypto deal flow and the rise of regulatory scrutiny have scared some investors away. Andreessen partners say they still want to back crypto start-ups and entrepreneurs, and that now is a good opportunity to buy.

Takeaway: This crypto winter seems different. Crypto has become more mainstream since previous downturns, but the buzz for buying the dip has waned in 2022. Some argue Andreessen crossed the crypto point of no return years ago. Some say the firm can’t rebound from this crypto winter, but partners at Andreessen say otherwise and think they’re buying the dip in real-time.

2. Markets Rundown

If you want access to Wall Street insider interviews, industry deep-dives, and investment ideas, check out our Insiders newsletter.

Stocks snapped a three-day winning streak as Big Tech weighed down indices.

Movers & Shakers

• (+) Harley-Davidson ($HOG) +13% after the motorcycle manufacturer beat earnings expectations.

• (+) Visa ($V) +5% after the company boosted its dividend by 20%.

• (–) Alphabet ($GOOGL) -9% after Google's parent company missed on YouTube ad revenue expectations.

Private Dealmaking

• Bilt Rewards, a credit card rewards platform, raised $150 million

• Resolve Biosciences, German healthcare startup, raised $71 million 

• Celestia, a blockchain scaling startup, raised $55 million

• Finexio, a B2B accounts payable platform, raised $35 million 

• WeTravel, a booking and payment platform for travelers, raised $27 million 

• MrBeast, a YouTuber, wants to raise $150 million 

Top Reads

• What Election Day means for the S&P 500 (YF)

• NYC helps kick off wage transparency legislation (CNBC)

• Earnings have been mostly good - just avoid the tech wreck (CNN)

• The house-price decline accelerates (Axios)

• Regulators want to crack down on ‘junk fees’ at banks (CNBC)

• Meta shares fall following earnings miss and weak forecast (Axios)

• New law would cut back on executive pay if there are financial statement errors (YF)

• Powell facing pressure as worries mount over economy (CNBC)

• Long Covid caused a surge in workers with disabilities (Axios)

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4. Book of the Day: The Globalization Myth

The conventional wisdom about globalization is wrong. Over the past forty years as companies, money, ideas, and people went abroad more often than not, they looked regional rather than globally.

O’Neil details this transformation and the rise of three major regional hubs in Asia, Europe, and North America.

Current technological, demographic, and geopolitical trends look only to deepen these regional ties. O'Neil argues that this has urgent implications for the United States.

Regionalization has enhanced economic competitiveness and prosperity in Europe and Asia. It could do the same for the United States, if only it would embrace its neighbors.

“Regionalization, not globalization, has been the biggest economic trend of the past forty years.”

5. Short Squeez Picks

• Ten mental models for learning

• Did the pandemic change our personalities?

• 5 meditation retreat practices to try at home

• 10 free, valuable websites for entrepreneurs

A Message from The Progress Network: Ditch the Clickbait and Doomscrolling. Try a Dose of Progress Instead

We all find ourselves doomscrolling more often than is good for us. But what’s the alternative in a media landscape awash in clickbait and negativity?

Our free weekly newsletter, What Could Go Right? Every Thursday morning, we cover the progress you never hear about, from the slow but steady trend away from capital punishment to which countries are dropping emissions to where same-sex marriage just got legalized (Cuba, believe it or not).

Plus, if you sign up today, you’ll also get our free reading and listening guide on the rapid-fire progress humanity has made in just the past few decades.

Sign up now for a weekly pick-me-up for intelligent people.

6. Daily Visual: Number of Disabled Americans in the Workforce

Source: Axios

7. Daily Acumen: A Few Things

“Having no FOMO might be the most important investing skill.

Most of what people call “conviction” is a willful disregard for new information that might make you change your mind. That’s when beliefs turn dangerous.

People have vastly different desires, except for three things: Respect, feeling useful, and control over their time. Those are nearly universal.

The market is rational but investors play different games and those games look irrational to people playing a different game.”

Source: Collaborative Fund

8. Crypto Corner

• Voters want to see more crypto regulation

• Crypto company blockchain.com to issue Visa debit card

• Crypto winter is hurting Google’s ad empire

• Meta’s metaverse losses top $9.4 billion on the year

• Crypto markets see largest short liquidations in 15 months

• Are crypto trading bots legit?

9. Memes of the Day

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