Alternative Investing Report - October 4, 2024

_{*as of 10/3}

After topping $65,000 in the wake of the Fed interest rate cut, Bitcoin is down 6% in the past week, while Ethereum and Solana have both dipped 11%. All three are now essentially where they were the day before the rate cut, and the short-term optimism the market saw then has dissipated. Much of the blame for the downturn has been placed on the geopolitical tensions in the Middle East, as investors opt for less risky assets.

➨ TAKEAWAY: Short-term volatility in the crypto market is nothing new, but one big theme in the crypto market this year has been its growing correlation to equities. Indeed, the correlation between Bitcoin and the S&P 500 hit a yearly high this week. After the rate cuts, and with both U.S. presidential candidates positioning themselves as pro-crypto, it looked like the market was heading for a bull run, but now investors may have to be patient.

WeWork co-founder Adam Neumann is launching a co-working competitor, Workflow, as part of Flow, the residential real estate venture he founded in 2022 with backing from VC firm a16z. Flow owns apartment buildings in places like Miami and Atlanta, and will launch Workflow as part of those buildings, rather than in traditional office spaces. This comes only months after Neumann’s failed bid to reacquire WeWork, and it seems he just can’t quit the co-working space.

➨ TAKEAWAY: The question for potential investors is whether Neumann learned the right lessons from the collapse of WeWork. One major difference is that WeWork essentially acted as a middleman between landlords and tenants whereas Flow actually owns the buildings where Workflow will operate. There is clearly demand for co-working spaces, and with more people than ever working from home, placing them in residential buildings could make sense.

In the latest episode of Smart Humans, SkyBridge Capital’s Anthony Scaramucci joined Vincent co-founder Slava Rubin to discuss the upcoming election and his investment predictions, including how high he thinks Bitcoin will go.

🚀 OpenAI’s record round: After weeks of speculation, the ChatGPT-creator announced a $6.6 billion raise, the biggest venture capital round of all time. It values the company at $157 billion, nearly double the $80 billion it was last valued at in February.

🏢 Office market bottom?: While prices for office buildings dropped by 12.4% year-over-year in Q2, there are a number of signs that the market might be at its bottom, with a pickup in the sale of distressed properties and more interest rate cuts on the horizon.

🚀 Fidelity’s first venture fund: The asset manager raised $250 million to invest into mid and late-stage companies, getting funding from family offices, high-net-worth individuals and investment advisors as it continued to expand its private market offerings.

🚧 Multifamily completions: The number of apartment buildings finished in August rose by 79% year-over-year and hit a 50-year high, while multifamily starts fell by 6% monthly. The growing supply could keep rents low in markets with high completion rates, but the dip in construction starts will see a lagging effect with less supply down the road.

🏡 Renters prefer Kamala: Nearly half of renters believe she will be better for housing affordability compared to the 31% who picked President Trump,

🎸 George Harrison’s guitar: The Beatle’s Resonet Futurama will be sold at Julien’s Auctions in November and carries an estimated price of between $600,000 - $800,000.

Monday: 🚀 Biotech VC funding, 🎨 Weekend art auctions
Tuesday: 🤖 OpenAI financials, 🫖 Investing in tea
Wednesday: 🏡 Housing turnover rate, 🏈 Tom Brady auction
Thursday: 🚀 Cerebras IPO, 🚜 Farmland market

Have a great weekend!