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Saylor raises $700M, China's Tariffs, and Tesla to the Moon!
View from the Arch #33 | June 14th
Action was scant in crypto this week - that certainly wasn’t the case for legacy markets or tech! Read on for the digest…
This Week in Crypto
There was not a huge amount of action in crypto this week outside of more second-rate celebrities trying to pump coins, which frankly, I don’t want to talk about.
The ETF flow momentum subsided slightly, which was somewhat surprising given the macro news (see next section).
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Farside Investors
Supreme leader of the SEC, Gary Gensler, also said he expected the ETH ETF final S-1 approvals to come sometime this summer at a congressional hearing.
Bitcoin and Ethereum are still taking up mindshare in Washington:
Biden is in talks to accept Bitcoin donations through Coinbase commerce.
After meeting with large Bitcoin miners this week, Trump said he wanted “all remaining Bitcoin to be made in the USA” as it will “help us to be energy dominant”.
Congressman Thomas Massie wants to introduce a bill to end the Fed after listening to the Bitcoin Standard.
Oh, and Big Mike is at it again, raising $700M to smash buy more corn…
MicroStrategy Announces Pricing of Offering of Convertible Senior Notes $MSTR
— Michael Saylor⚡️ (@saylor)
12:02 PM • Jun 14, 2024
This Week in TradFi
U.S. inflation came in at 3.3% in May, lower than expectations, raising hopes of a rate cut (are you tired of hearing us talk about rate cuts yet?).
Core CPI, which doesn’t include food and energy costs, was 3.4%, 0.1% below expectations.
The S&P increased 0.9% following the news, and traders now anticipate a one to two quarter-point rate cut in September. Even Australia’s number two pension fund is confident in the Fed managing a soft landing!
On the other side of the water, all eyes are on the Bank of Japan and their policy meeting decision coming today. The yen has been declining and reached a 34-year low in April, which caused a series of interventions from the Japanese government.
The yen has seen another round of weakness in the past couple months, causing uneasiness in the Asian markets.
The BOJ will likely keep interest rates very low but may begin reducing its $5 trillion balance sheet by decreasing its bond buying. This relies on inflation remaining around 2%, which may be difficult, with domestic demand continuing to be slow.
Lastly, China continues its attempts at turning around its economy. The European Union announced its decision to increase tariffs on Chinese electronic vehicles to as much as 48%. We’ll keep an eye out for China’s response here, especially as many countries start to impose tariffs on various Chinese imports. Additionally, China is set to sell $4.8B of 50-year bonds and despite all the warning signs on China’s economy, investors seem to show strong appetite for these bonds.
Other interesting trends we’re keeping an eye on:
The US dollar's strength and its impact on global trade.
Oil prices rallied after a strong demand growth forecast.
Exciting news out of Argentina as well, with monthly inflation falling in May for the fifth straight month to 4.2%.
This Week in Tech
The ARK team has clearly been sipping on something - their bear case for Tesla’s stock performance is an 11x over the next 5 years. Elon Musk who just got his $46B pay package at Tesla approved is certainly eating up this prediction! The rest of the valley has been trying to get a grip on the unit economics of AI businesses.
Sell your excess GPUs while you can. The end is near.
Cloud providers that didn't have A100s 6 months ago, while we desperately looked for 8, are now rushing to rent them to us.
I'm serious. This is your chance.
— Andriy Burkov (@burkov)
12:40 AM • Jun 13, 2024
Sequoia, the famed Silicon Valley-based venture capital firm, estimated that in 2023, AI startups and companies spent $50B on chips from Nvidia to train AI but only brought in $3B in revenue! This is an alarming figure and while the costs of chips may decrease over a longer time horizon as more players enter that market, the viability of many AI companies does come into question. These enormous costs to train AI models even plagued larger companies such as Stability AI. However, OpenAI showed that it’s ducking this trend:
Reports stated that OpenAI’s current annualized revenue is $3.4B!
In late 2023, their annualized revenue was $1.6B. This is an outrageous growth rate on a monstrous revenue base!
Apple’s Worldwide Developers Conference was this week, where they unveiled many exciting things, top of the list of which is Apple Intelligence.
Apple Intelligence is Apple’s new ecosystem-wide entry into generative AI. It’ll be included in virtually all of Apple’s operating system features, including iOS and macOS.
This will also include a major update to Siri, which will now answer written queries in addition to spoken ones.
Probably most importantly, users will be able to use artificial intelligence to generate their own emojis when Apple’s standard set of offerings don’t quite cover it ***insert diamond hands emoji***.
Apple announced a landmark partnership with OpenAI to integrate ChatGPT into Apple devices!
This partnership furthers OpenAI’s dominance in the LLM space, and while the economics of the partnership were initially undisclosed, it seems that neither party is paying the other in this partnership.
I've been super curious about who was paying who in the Apple/OpenAI deal. Apparently neither is paying.
OpenAI gets distribution to 100s of millions of devices
Apple gets to offer a chatbot to their customersApple will get a revshare of monetized results.
— Sheel Mohnot (@pitdesi)
3:39 PM • Jun 13, 2024
As usual, below are some fundraising announcements, M&A, and tech personnel changes that caught our eye:
Brex announced a departure from its co-CEO model to a single CEO structure, with co-founder Henrique Dubugras becoming the chairman of Brex’s board.
OpenAI announced two major hires - Sarah Friar (former CEO of NextDoor) as its CFO and Kevin Weil (former Facebook exec) as its CPO.
Mistral AI, an OpenAI competitor, raised $640M in equity and debt led by General Catalyst.
GPTZero, a company that offers a tool to detect whether content is AI-generated, announced a $10M Series A led by Footwork.
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.
View from the Arch #33 | June 14th