🍋 Another Disastrous Crypto Weekend

Crypto had a disastrous weekend. An anonymous bidder won Warren Buffett's last charity lunch with a $19 million bid. Treasury Secretary Janet Yellen said a federal gas tax holiday is "certainly worth considering." This holiday weekend was a rough one for airlines too with thousands of flights getting cancelled and delayed.

Short Squeez
June 20, 2022

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"There is no such thing as a dirty job. There is always soap and water at the end of the day." — Michael L.

Good Morning! Hope y'all are making the most of the long weekend and got to enjoy Father's Day! An anonymous bidder won Warren Buffett's last charity lunch with a $19 million bid. Maybe it was bought as the coolest Father's Day gift ever? Another gift idea for anyone who's still looking could be a tank of gas for your dad. Treasury Secretary Janet Yellen said a federal gas tax holiday is "certainly worth considering."

This holiday weekend was a rough one for airlines, with thousands of flights getting cancelled and delayed. These turbulent operations could be seen well into 2023, as airline staff shortages are not finding relief any time soon.

With stocks and crypto markets getting clapped, check out today's sponsor, Cadre, that allows you to invest in commercial real estate.

We'll be at NFT NYC this week. (Nothing like a good ol' NFT conference in peak bear market) Hit us up if you're there and let us know of any events we should be attending. 

1. Story of the Day: Another Disastrous Crypto Weekend

If you own any crypto, you probably had a (very) rough weekend. No tokens were spared as inflation, Fed rate hikes, a high correlation to equities (& many other reasons) all played a part in Bitcoin and Ethereum tanking. Bitcoin dropped to around $17,749, and Ether fell to $897 a coin. That's down more than 35% in the last week, breaking through some symbolic thresholds. 

On Monday, major crypto firm Celsius shocked investors when it said all withdrawals, swaps, and transfers have been paused due to "extreme market conditions." This was supposed to "stabilize liquidity and operations," but really just reminded people about the recent failures in crypto, like the Luna debacle.

Then on Tuesday, Coinbase announced a layoff of nearly 20% of its workforce. These actions showed that things are not all that peachy, and investor sentiment in the currencies worsened a ton.

The next day MicroStrategy CEO Michael Saylor had to go and defend his company's balance sheet as they've made a $4 billion bet on Bitcoin. Saylor made it seem like things aren't all that bad, but anytime you have to say that on CNBC, it probably needs to be taken with a big grain of salt. That was all before the Fed raised rates later that afternoon, which didn't provide the strong rally crypto investors hoped for.

On Thursday, Bitcoin fell to levels not seen since 2020, as it was in lockstep with a fall in the Dow that day. Jill Gunter, Espresso Systems cofounder and Chief Strategy Officer, said "I think that we've taken the elevator down, and I think that we, as an industry are going to have to take the stairs back up and climb out by building real utility."

That brings us to Friday, and the weekend, which saw the sell-off continue, as crypto hedge funds (3AC) and businesses implode and are having to answer insolvency questions.

Short Squeez Takeaway: Going back to Gunter's quote, any time you have to say you have to start building real utility, that's probably not a good sign to people who invested in this asset class already thinking it had real utility. I'm not saying crypto is a scam, and I think that it is here to stay, but it is clear it will be a long and bumpy road to get to be the life-changing asset that die-hard crypto fans have been touting for years.

Source: CNBC

2. Markets Rundown

Stocks and crypto ended a rough week slightly up on the day, but down for the week. 

Movers & Shakers

  • (+) Seagen ($SGEN) +13% after news broke that Merck is considering buying them.
  • (+) Azek ($AZEK) +6% because Bank of America upgraded the stock from neutral to buy.
  • (–) Kroger ($KR) -7% because the grocery store chain said in its quarterly report that rising inflation is making consumers buy cheaper store brands.

Private Dealmaking

  • Aidoc, developer of radiology software, raised $110 million in Series D funding
  • Rohlik, same-day food delivery startup based in Prague, raised €220 million in Series D funding
  • Indoor Robotics, autonomous robot platform, raised $15 million in Series A funding
  • Transfr, a company using virtual reality to simulate on-the-job training, raised $35 million in Series B
  • Ahana, data analytics platform, raised an additional $7.2 million in funding
  • DAOLens, DAO onboarding and management platform, raised $5 million in seed funding

3. Top Reads

  • Musk signals ‘maybe more down the road’ for dogecoin after merch (BB)
  • S&P 500 rises slightly Friday, but still posts worst week since 2020 (CNBC)
  • Investors learn the hard way not to fight the Fed (CNBC)
  • Adults who love toys? The toy industry loves them, too (BB)
  • Race to replace cigarettes is heating up (WSJ)
  • Germany steps up measures to conserve gas as Russia slows supply to Europe (WSJ)
  • The rush to ESG, with or without Elon Musk (WSJ)
  • Companies must help cut living costs, says new cost of living tsar (BBC)
  • Brex drops tens of thousands of small business customers as Silicon Valley adjusts to new reality (CNBC)

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A Message from Cadre

With stocks and crypto markets getting clapped, investing in alternative markets(1) is an excellent way to diversify your portfolio.

Commercial real estate is a steady option with tangible assets you can touch and feel. 

The committee’s investment professionals hail from a variety of top-tier institutions during their careers, such as Blackstone, Vornado Realty Trust, Goldman Sachs, Prudential Real Estate, Four Seasons and GEM Realty Capital.

With low correlation to the stock market, Cadre is a vital part of a long term portfolio to grow wealth. 

4. Book of the Day: Rare Breed: A Guide to Success for the Defiant, Dangerous, and Different

Sunny Bonnell and Ashleigh Hansberger, award-winning brand consultants and founders of Motto, bring their wisdom and insights to this radical "outside the box" business guide written specifically for the mavericks, oddballs, and visionaries they call Rare Breeds.

While most advice guides encourage you to change your inherent characteristics to get the job, get the promotion, get the client, Bonnell and Hansberger identify a different approach: instead of trying to conform, march to the beat of your own drum. By following your own path, you'll find your success.

They know this approach works based on their own experience. When these iconoclastic thinkers behind the company acclaimed by the Chicago Tribune and Forbes started their company, they didn't follow the rules of most leadership books and business school courses. 

"Instead of doing everything people told us we should be doing--be transactional, be conservative, be nice--we did the opposite. Instead of burying our innate vices--obsessive perfectionism, rebelliousness, weirdness--we made them our selling points." The result: a flourishing company that is the model for an entirely new approach to success.

Rare Breeds don't get what they want by adapting to the conventional rules: instead, they use the traits often considered shortcomings as tools for creation and growth. 

Combining examples and practical tools, Bonnell and Hansberger identify seven vices-turned-virtues--Rebellious, Audacious, Obsessed, Hot-Blooded, Weird, Hypnotic, Emotional--to help disruptors and trailblazers discover their inner Rare Breed and tap into them to realize their full potential in work and life.

“None of us were meant to be common. We were born to be comets.”

5. Short Squeez Picks

6. Daily Visual: Mortgages Hit 14 Year Peak

US average 30 year fixed mortgage rate

Source: Axios

7. Daily Acumen: Lessons from Ryan Holiday

Don’t compare yourself to other people. You never know who is taking steroids. You never know who is drowning in debt. You never know who is a liar.

You don’t have to be anywhere. You don’t have to do anything. All that pressure is in your head. It’s all made up.

Just drink more water. It’s very unlikely you’re drinking enough and a veritable certainty that you’re not drinking too much.

Modern life is hard. Just think of all the things people have to know how to do today—from technology to the unwritten rules of polite society. Think of all the information thrown at a person from the moment they wake up. Think of the emotional acuity required to operate in daily life today. When you understand this, it should help you be a lot more patient.

We tend to think of ego as a millionaires or billionaires disease—something that afflicts the successful. In fact, it does the most damage to promising people/teams/causes in the early phases.

Source: Ryan Holiday

8. Crypto Corner by Bonkalytics.com

For more crypto-focused content, sign-up here.

9. Memes of the Day

  

  

     

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(1) Investing in alternative assets involves higher risks than traditional investments and is suitable only for sophisticated investors. Alternative investments are often sold by prospectus that discloses all risks, fees, and expenses. They are not tax efficient and an investor should consult with his/her tax advisor prior to investing. Alternative investments have higher fees than traditional investments and they may also be highly leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or gain and should not be deemed a complete investment program. The value of the investment may fall as well as rise and investors may get back less than they invested.

(2) Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk.

Private placements are high risk and illiquid investments. As with other investments, you can lose some or all of your investment. Nothing here should be interpreted to state or imply that past results are an indication of future performance nor should it be interpreted that FINRA, the SEC or any other securities regulator approves of any of these securities. Additionally, there are no warranties expressed or implied as to accuracy, completeness, or results obtained from any information provided here. Investing in private securities transactions bears risk, in part due to the following factors: there is no secondary market for the securities; there is credit risk; where there is collateral as security for the investment, its value may be impaired if it is sold. Please see the Private Placement Memorandum (PPM) for a more detailed explanation of expenses and risks.

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