Alternative Investing Report - February 12, 2025

*as of 2/11; Sources: S&P, BTC, FTSE, DJRE, CL50

This week’s AI Action Summit in Paris brought together world leaders and industry experts in an effort to build global consensus on issues surrounding the sector. While some major agreements were made and initiatives announced, the dominant story was the US and UK refusing to sign a declaration on “inclusive and sustainable” AI that was signed by 60 countries, including France, Japan, China, and India. Vice President J.D. Vance also gave a speech attacking the EU’s regulatory approach to AI and emphasizing the U.S.’s commitment to being the industry’s global leader.

➨ TAKEAWAY: As China’s DeepSeek and other non-American startups become more prominent, there has been a geopolitical shift towards competition rather than cooperation. American AI startups had to like what they heard from the summit, as it seems clear the current administration is less concerned about the safety of AI than establishing global dominance over the sector.

The acting director of the Consumer Financial Protection Bureau (CFPB), Russell Vought, closed the bureau’s Washington DC headquarters and told employees they cannot perform any work tasks, effectively shutting down the agency. The Trump administration and Elon Musk have had their sights set on the CFPB, which oversees the financial and banking industries and helps protect consumers from fraud and malfeasance. It has fought banks on overdraft fees, credit card companies on late fees, and recently removed an estimated $49 billion in medical debt from credit reports.

➨ TAKEAWAY: While President Trump does not have the legal authority to eliminate the CFPB, he and Vought can effectively cripple it by not allowing it to do any work. Proponents of dismantling the CFPB claim that it has overstepped its authority and that removing regulation will boost the financial sector and help fintech startups. A financial industry without guardrails could start to resemble crypto, which often sees innovative products, but also boasts a litany of scams and illicit activity that could cause many to lose trust in in the system.

🏡 Rents inching up: U.S. apartment rents went up 0.16% and apartment occupancy rose to 94.9% in January, a good turnaround after declines at the end of 2024. Detroit, Chicago, and Kansas City saw the highest year-over-year rent growth, while Austin, San Antonio, and Phoenix saw the biggest declines.

🤖 Elon Musk’s OpenAI offer: In a move likely tied to his ongoing litigation against the company, Musk offered to buy the AI startup for $97.4 billion, well below the $300 billion valuation from their latest rumored funding round. Musk’s move puts pressure on founder Sam Altman, who is trying to restructure the company from non-profit to for-profit and will have to agree to a transition price, which has been reported to be far less than Musk’s offer.

🚀 Stripe eyeing shareholder sale: The private fintech startup is in talks to allow employees to sell shares of the company at a $85 billion valuation, above the valuation of $70 billion from its latest tender offer a year ago.

🪙 Crypto VC funding update: Q4 saw a 13.6% jump in deal value compared to Q3, while the median pre-money valuation of seed stage companies rose by 70%, indicating that investors are again maker bigger bets in fewer startups.

🏢 CRE lending rebounding: Commercial and multifamily loan originations were up 84% year-over-year in Q4, and the latest forecast from the Mortgage Bankers Association’s (MBA) expects a 16% increase in 2025.

🚘 Bring a Trailer’s 2024: The online classic car marketplace sold a record $1.5 billion worth of cars last year, even as live classic car auction sales fell by 11%, with its co-founder saying the market for cars in the $200,000 to $500,000 range is “super strong.”

One of the original alts, Litecoin has been around since 2011, and was at one point the 2nd biggest cryptocurrency by market cap and considered the “silver” to Bitcoin’s “gold.” It still sits in the top-20 by market cap, but well below its all-time high of nearly $400 per token. This week, its price has risen the most of any coin in the top-100 by market cap, likely due to a potential ETF being approved by the SEC this year. The deadline for such an ETF to be approved is October, so it may not happen anytime soon, and interest could wane before then.