Alternative Investing Report - September 13, 2024

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India and Nigeria took the top two spots in the 2024 Global Crypto Adoption Index, with the U.S. ranking 4th, and Indonesia seeing the biggest jump, showing 200% year-over-year growth and ranking first in the two DeFi categories. The index is made up of made up of four sub-indexes which measure transaction volume in centralized, decentralized, non-retail and retail settings. Overall, global crypto activity increased significantly at the beginning of 2024, with a slight pullback in Q2

➨ TAKEAWAY: While a lot of crypto news coverage and analysis takes on a U.S.-centric viewpoint, investors must consider that it is a global industry. The U.K. Parliament just introduced a bill that would classify digital assets as personal property, providing them with legal protection. Investors in the asset class should pay attention to trends and news from other countries, as they can move the market as well, both in the short-term and long-term.

Rent growth continued to slow in August, as demand fell relative to the rising supply on the market. Overall, rents grew by 0.2% and are up 3.4% year-over-year, but are still down 3.2% from highs achieved two years ago. Listings with rental concessions, such free parking or rebated rent, are at their highest share since March 2021.

➨ TAKEAWAY: The rate of completed multi-family construction hit 35-year highs this year, and supply is finally starting to eclipse demand. Austin, TX has seen the most new apartment construction in the country, and as a result, rents are down 17.6% year-over-year. One other factor to consider is that as interest rates fall, some prospective renters may instead become buyers, further cutting demand, so rent growth could be stagnant in the short-term.

🚀 China VC slowdown: The number of startups founded in China in 2023 was just 1,202, down from 51,302 at its 2018 peak. Stricter government regulations and the slowdown in the Chinese economy are to blame and as a result, domestic and international VC funding has almost entirely dried up.

🤑 Record household wealth: U.S. household wealth hit $163.8 trillion last quarter, a new record, in large part because of a $1.8 trillion increase in real estate values.

💻 A record Apple sale: While it didn’t beat the all-time record for a computer sold at auction that was just set earlier this week, an Apple-1 owned by Microsoft co-founder Paul Allen sold for $945,000, which is a record for any Apple computer.

🪙 Bitcoin mining: The mining difficulty hit an all-time high this week, meaning that miners now need to devote even more computational power and energy to receive rewards, so some mining operations will be facing tough decisions ahead.

🏢 Commercial delinquencies rise: Commercial mortgage-backed securities had a 4.82% delinquency rate in Q2, an increase 47 percentage points compared to Q1, with the greatest focus still on office loans, which makeup around $740 billion of current debt outstanding.

💵 Private equity turns to credit: The seven biggest publicly trading private equity firms are now deploying the vast majority of their capital to private credit strategies, at almost a 10:1 ratio in Q2.

Monday: 📈 Rise of Family Offices, 🪙 Crypto market falls
Tuesday: 🚀 Space funding skyrockets, 🏡 Housing payments decline
Wednesday: 🎨 Art Market Update, 🚀 GP deals on record pace
Thursday: 📊 CPI hits 3-year low, 💻 Record computer sale

Have a great weekend!