Alternative Investing Report - May 7, 2025

*as of 5/6; Sources: S&P, BTC, FTSE, DJRE, CL50

President Trump’s embrace of crypto has drawn both attention and scrutiny to the industry. The Senate is now investigating both Trumpcoin, the President’s memecoin, and the Trump family’s World Liberty Financial crypto venture, to see whether they should be considered a conflict of interest for the President. Democrats are proposing legislation to ban the president and lawmakers from issuing, endorsing, or sponsoring crypto assets, and walked out of a House hearing on crypto legislation.

➨ TAKEAWAY: The bipartisan GENIUS act, which would regulate stablecoins, is now in jeopardy as crypto-related corruption concerns surface. A small logistics company just announced its intention to buy $20 million worth of Trumpcoin in the hopes of influencing trade policy, which could set a dangerous precedent. A reported 58 wallets have made more than $10 million each on Trumpcoin, while 764,000 smaller holders have lost money. Crypto is threatening to become a partisan issue, which would not be good for the asset class, and these issues are drawing the wrong kind of attention to the industry.

In this episode of Smart Humans, Slava Rubin talked with FranShares founder and CEO Kenny Rose about investing into franchises, the similarities to real estate and private credit, and how the asset class can be a great hedge against a recession.

The real estate brokerage Compass is fighting with Zillow and Redfin over private listings - specifically when a house is first marketed internally so only other Compass agents know it is on the market. Eventually, if it doesn’t sell during that period, the listing would then go public. However, Zillow has threatened to ban any Compass private listing from later appearing on its platform, creating an impasse between the companies.

➨ TAKEAWAY: While there are legitimate privacy reasons for some sellers to want to list their homes privately, it doesn’t make sense for the vast majority of sellers. The more transparent the housing market is, the better it is for buyers and sellers, who can make more informed decisions. Sellers also benefit from getting more eyeballs on its property, which helps create more demand. If this dispute between Compass and Redfin and Zillow causes fewer listings to become public, it could also slow down an already struggling housing market.

🚀 Crowdfunding’s strong April: There was more than $41 million invested into Regulation CF offerings in April, with standout campaigns for Arrived and Plunge leading the way. WeFunder was the top platform with $17 million invested, followed by StartEngine, DealMaker, Republic and Netcapital.

🤖 OpenAI’s corporate structure: After contemplating a change to a for-profit structure, OpenAI announced that it will still be controlled by a non-profit company, and is converting a subsidiary into a public benefit corporation.

💵 Betting against private credit: Short sellers are targeting some of the industry’s biggest direct lenders, including Apollo Global Management, Ares Management, and Blue Owl Capital, who have all seen their share prices drop due in part to economic conditions that could lead to higher default rates.

🚘 Barrett-Jackson Palm Beach auction: The high-end car auction saw a 100% sell-through rate on more than 600 cars, generating more than $40 million in sales led by a $902,000 sale for a 2018 Ford GT.

🏢 CMBS delinquencies rise: For the first time since 2021, overall delinquency rates for commercial mortgage-backed securities topped 7%, with multifamily and lodging seeing the largest increases within the asset class.

⚽ Soccer team valuations: At $6.7 billion, Real Madrid is the most valuable soccer team in the world, followed by Manchester United, Barcelona, Liverpool, and Manchester City. Three MLS teams topped $1 billion in value - LAFC, The L.A. Galaxy, and Inter Miami.

The Sam Altman-founded eyeball-scanning project that is attempting to add “proof-of-humanity” as a crypto use case made its U.S. debut this week, giving away tokens to people in exchange for allowing “orbs” to scan their irises. Prices for Worldcoin have dipped significantly in the last week, perhaps because people sign up, get their eyeball scanned, and then immediately sell the tokens. There are also significant privacy concerns, which have caused Indonesia and Kenya to ban the project, with Kenya ordering all biometric data collected so far to be deleted. While Worldcoin has seen its value rise by 47% in the last month, it is still down nearly 85% over the last year.