Alternative Investing Report - April 9, 2025

*as of 4/8; Sources: S&P, BTC, FTSE, DJRE, CL50

The U.S. Department of Justice is disbanding its crypto enforcement unit, pointing to President Trump’s recent crypto-focused executive orders. The department has also directed its major crimes units to only investigate crypto in regards to its association with drug cartels and terrorism.

➨ TAKEAWAY: This continues the government’s new hands-off approach to crypto, as the SEC has dropped most of the major cases the previous administration had been pursuing. It is not a surprising development, as Trump and his family now have major stakes in multiple crypto enterprises, and crypto investors can now be confident that the government will be hands-off. Despite this, Bitcoin and the rest of the crypto market continues to fall, and is down significantly since the new administration took office.

There were 39,000 single-family homes built last year specifically to rent out, a 15.5% increase compared to 2023 and a new all-time high for the build-to-rent (BTR) market. This growth represents over a 10x multiple over the past decade, as the sector has expanded rapidly. There are also almost 110,000 BTR units under construction nationwide, so the next few years are sure to set more records. The Sun Belt dominates the list of states with the most BTR units completed last year, as Texas, Florida and Arizona led the way.

➨ TAKEAWAY: As buying a house becomes less and less affordable for younger generations, they are turning to the next-best alternative, renting. Developers are honed in on where land is relatively cheap to build communities of BTR houses, and the demand continues to grow. Investors should note that many of the top markets for BTR have seen rent stagnation and declines, due in part to growing supply.

📊 Small business optimism declines: The NFIB Small Business Optimism Index fell by 3.3 points in March, despite earlier expectations of a small increase, and is now below the 51-year average.

🤖 AI investing: SignalFire, an early-stage venture firm that both uses AI in investing decisions, and invests into AI companies, raised $1 billion for its latest fund.

🏡 Lumber tariffs: Independent of the new tariff policy, duties on Canadian softwood lumber - an important homebuilding input - are set to more than double, which could send home construction costs even higher and further restrict supply.

🪙 Ripple buying broker: The crypto firm is paying $1.25 billion to acquire Hidden Road, a prime brokerage firm, in an effort to build out its trading capabilities and increase the usage of its stablecoin, RLUSD.

🚀 Consumer startups in tariff trouble: With many consumer startups heavy reliant on imported materials and goods, they face the unenviable position of raising their prices and losing sales, or reducing their profit margins or even selling at a loss.

🎨 Prints market: Two major New York art fairs that focus on prints and multiples saw increased attendance and sales, as the lower price points appeal to younger and newer collectors.

While the greater crypto market has fallen over the past few days, none of the major coins have been hit as hard as Ethereum, still the second biggest crypto token by market cap. Its price hit a two-year low, falling more than 10% yesterday, 20% in the past week, and more than 60% since December. The token has now fallen below its “realized price,” the average each investor paid for their token - meaning the average investor is now holding at a loss. Historically, this has led to a further decline in price, as people panic sell, but then gives way to a long-term market recovery. Time will tell whether this pattern repeats itself.