$HOOD crypto acq, Rate Cuts Galore, & Tech to the Moon!

View from the Arch #32 | June 7th

Author

Freddy Mann
June 07, 2024


Summer is here, and New York City’s not the only thing that’s heating up - and no, we’re not just talking about what went down at Computex.

This Week in Crypto

This week saw another stellar week of inflows to the ETFs, with Tuesday posting the second-ever largest daily net inflow at almost 900M. It’s not been enough to push us into new ATHs, but price action is steadfastly grinding up.

  • Note that at current prices, only around $32M of new supply enters the market each day.

Farside Investors

Robinhood acquired crypto exchange Bitstamp for $200M.

  • Bitstamp is one of the older exchanges. They mainly have a European customer base - which was key for Robinhood.

  • Robinhood has clearly identified crypto as a target growth vertical - this is unsurprising given in the Q1 2024 earnings their transaction-based revenue had grown 59% to $329M. Of this, $126M was crypto driven - up 232%.

    • It will also be Robinhood’s first institutional business.

  • Don’t be surprised to see this kick off a series of high-profile M&A transactions, as legacy firms look to enter the space.

Celebrities in crypto continued their strange arc, below is a summary of Iggy Azalea’s forage into the space, with her token, $MOTHER, hitting a $200M market cap this week:

Oh, and if that wasn’t weird enough, Hulk Hogan seemed to have launched and rugpulled his own meme coin, profiting $1M. There is some debate as to whether his account was compromised or not. Never thought I’d type that sentence.

Anyway, some headlines from the week:

This Week in TradFi

Rate cuts have begun, baby! In the U.S. and Europe, the news continues to center around rate cuts.

  • The Bank of Canada and the European Central Bank both lowered rates this week, following Switzerland and Sweden. The Bank of Canada lowered borrowing costs to 4.75% and has hinted at further cuts soon, and the ECB cut rates to 3.75% for the first time in five years. 

  • U.S. traders expect the Fed to cut rates by 50 basis points in September and December, with the 2-year Treasury yield falling six days in a row. 

  • Domestically, the May jobs report comes out today, and economists are expecting a job growth of 180,000 and an unemployment rate holding steady at 3.9%. This is inline with the gradual labor market softening economists have been hoping for, which should help cool inflation as well. 

Pivoting to Asia, it was a tumultuous week for many countries on that side of the ocean. 

  • Indian stocks plummeted on Tuesday as election results trickled in, showing that though Prime Minister Modi was reelected, his party the BJP did not look likely to hold its majority in the Indian parliament. Despite this uncertainty, most economists expect India’s central bank to keep interest rates steady today at 6.5%, as economic growth remains strong. 

  • China’s exports continue to grow for a second month in a row given increasing demand overseas. Investors hope this will help steady China’s irregular economic recovery.

Other interesting trends we’re keeping an eye on:


This Week in Tech

An amusing week for those of you who like chaos:

  • Nvidia went off this week, passing Apple to become the second-most valuable public company, slightly trailing Microsoft. Their market cap passed a whopping $3 trillion for the first time, and its stock has jumped more than 147% over the past year. 

  • GameStop is back in the news, with stock rising 47% yesterday after Keith Gill aka Roaring Kitty scheduled a livestream for today at noon. He also posted a screenshot showing his stock holdings in the company, now up to $586 million. Today’s livestream will be the first appearance on his channel since the rally in 2021. 

Nvidia and GameStop stocks aren’t the only things going to the moon.

  • Boeing’s Starliner spacecraft is successfully on its way to the International Space Station, after a month of delays. The news can’t come soon enough - maybe they hired a new PR agency?

  • SpaceX’s Starship, reportedly the most powerful rocket ever built, launched its fourth test flight yesterday and hit multiple key milestones, including survival upon reentry into the Earth’s atmosphere and splashdown of the capsule and booster. This has been the most successful test flight yet - with test flights 1 and 2 exploding, and test flight 3 resulting in the ship breaking apart during reentry.

As usual, below are some fundraising announcements, M&A, and tech personnel changes that caught our eye:

Arch is building a next-gen wealth management platform for individuals holding Alternative Assets. Our flagship product is the crypto-backed loan, which allows you to securely and affordably borrow against your crypto. We also offer access to bank-grade custody, trading and staking services, powered by BitGo.

Disclaimer: None of the above is financial advice, seriously.