Alternative Investing Report - April 2, 2025

*as of 4/1; Sources: S&P, BTC, FTSE, DJRE, GOLD

Today is the day that President Trump coined “Liberation Day,” when his sweeping tariff policy is set to go into effect. The plans include 25% tariffs on goods from Mexico and Canada, reciprocal tariffs on countries that tariff American goods, and on Thursday, 25% tariffs on foreign cars and car parts. A number of specifics have not yet been announced, and there is considerable uncertainty about what the administration will follow through on. A press conference scheduled for 4 PM ET will shed light on specifics.

➨ TAKEAWAY: Public and private markets have been dealing with uncertainty around the tariffs ever since Trump took office, and there will be some benefit to being able to move forward with more complete knowledge. However, the tariff plan could cause the prices of goods to rise significantly, reduce consumer spending and confidence, and wreak havoc on the economy. Trump is even facing some Republican opposition to his plan, though it seems unlikely to stop any implementation. Tomorrow could be a volatile day in the markets, and investors across all asset classes should be on notice.

Circle, best known as the company behind the USDC stablecoin, took the first step towards a long-anticipated IPO, filing to go public on the New York Stock Exchange. It’s being reported that the company will target a $5 billion valuation, which is around where its shares were being privately valued last year. Circle attempted to go public via SPAC in 2022 but that attempt never made it to fruition. It has been profitable the last two years, though it saw its net income drop from $268 million in 2023 to $156 million in 2024.

➨ TAKEAWAY: While Circle is a crypto company, because it is a stablecoin issuer, the upside and downside isn’t as high as you might expect from the industry. It has a single product - USDC, the world’s second largest stablecoin behind Tether, and it has captured 26% of the overall stablecoin market share, growing by 36% this year. It also only has a single source of revenue - interest on the reserves backing USDC, which accounted for more than 99% of its 2024 revenue. The stablecoin market is also getting more crowded every day, so it will be interesting to see how investors react when Circle does go public.

In the newest episode of Smart Humans, Vincent founder Slava Rubin talks with Neutral CEO and co-founder Nate Helbach about the current macroeconomic environment, and developing luxury housing focusing on sustainability, health, and wellness.

🤖 Largest VC round ever: OpenAI raised a mammoth $40 billion funding round - $30 billion from SoftBank - at a $300 billion valuation, almost doubling its previous price.

🎨 Art sales in 2024: Art sales at auction fell by 27.3% in 2024, totaling $10.2 billion, as high interest rates, a slowdown in China’s economy, and economic uncertainty combined to put a damper on the market.

🏡 Home equity report: The total value of owner-occupied housing gained $3.2 trillion last year, rising to $48.1 trillion, of which $34.7 trillion is in equity, the third-highest total on record.

🚘 Schumacher’s Ferrari: The car used by Michael Schumacher’s in his 4th of 7th Formula 1 titles - Ferrari F2001 chassis 211 - will be going to auction at the Monte Carlos Grand Prix in May. It previously sold for $7.5 million in 2017 and should fetch significantly more this time around.

🪙 Trump’s crypto mining IPO: American Bitcoin, the Trump-backed mining company, is exploring a possible public offering, only a day after the President’s family involvement in the company was announced.

💵 Private credit funds decline: The number of fund closings in 2024 fell by more than half, from 347 to 158, though the amount raised only fell by 20%, indicating that bigger funds took in the lion’s share of capital.

At one point a mainstay in the top-10 crypto tokens by market cap, EOS has seen some new life this week in the wake of its rebranding announcement in March. In late May, EOS will be change its name to Vaulta and do a token swap, as the company pivots towards integrating DeFi with traditional banking. The new token will apparently offer a 17% staking yield, and it seems just being in the news again has increased demand, as the token has risen more in the past week than any in the top-100 by market cap.