September 25, 2022 | Issue 34
THE ECONOMY & BITCOIN
It's not possible to develop an understanding of crypto's future in real estate without understanding what drives crypto adoption.
I often write about the moves by policymakers in Washington and the industry influencers, but I rarely address macro economic factors.
This newsletter's lead story is about the price correlation between bitcoin and the stock market. Anyone that owns bitcoin and checks on its price, notices the when the S&P drops or surges, chances are that crypto, not just bitcoin, does the same.
I have also observed that when crypto pricing trended up and to the right (a while ago), more agents reached out to me with an interest in learning about crypto. I h
ope that happens again soon.
Another issue this week that caught my attention was the Treasury's request for comment on criminal crypto activity.
Many of you know that in addition to crypto and my local real estate market, I spend time on wire fraud prevention. I recently learned from my friends at CertifID, a leading wire fraud prevention software provider, that criminals who steal real estate funds will often convert those funds into crypto. I hope that CertifID, NAR, ALTA, and other industry representatives respond to the Treasury's request for comments and share information that may help thwart wire fraud criminals from stealing buyers and sellers money.
Also, many of you reached out to me about my YouTube videos. Thanks! Please SUBSCRIBE and LIKE the videos.
If there is ANY crypto topic that you would like me to cover, let me know. I'll dive in and share what I've learned with everyone else.
PPS. This newsletter is supported by home buyers and sellers in NJ who retain me as their real estate agent. If you know of anyone looking to buy or sell a home, please reach out to me.
▸ Bitcoin and S&P As the Federal Reserve tightens monetary policy in its battle against multi-decade high inflation, real estate agents have been focused on the impact for home buyers and sellers. In the crypto world, the focus is the price of bitcoin. Nik Bhatia, a USC business professor and author of a highly-regarded book Layered Money, explains that over the past five years, the price correlation between stocks (S&P 500) and bitcoin has been the second highest correction among all asset classes. Price correlation measures how different asset classes behave in relationship to one another. Asset correlation is crucial in investment portfolios because investors need balance. They don't want their investments to move in the same direction at the same time. Bhatia notes that there have been periods when bitcoin uncouples from stocks and experienced major price increases. Bitcoin market watchers are looking for those signals.
▸ Nasdaq Jumping Into Crypto Custody Service According an article in The Block, Nasdaq will provide a broader service in crypto beyond facilitating trades. Nasdaq will offer crypto custodial services – holding onto investors' crypto assets. Nasdaq is responding to growing demand among institutional investors. In a CoinDesk article about Nasdaq by journalist Margaux Nijkerk, she asks if traditional finance will take over crypto or will crypto reshape traditional finance? The large crypto exchange FTX introduced stock trading this year.
▸ US Treasury Seeking Public Comments to Fight Crypto Crime The Treasury published a notice asking the public to submit comments on the Treasury's efforts to assess and mitigate finance risks tied to crypto. Here are some of the questions:
▸ What regulatory changes would help to mitigate illicit financing risks associated with digital assets?
▸ What additional steps should the U.S. government consider to address the illicit finance risks related to mixers and other anonymity-enhancing technologies?
▸ Are there specific countries or jurisdictions where the U.S. government should focus its efforts, through bilateral outreach and technical assistance, to strengthen foreign AML/CFT regimes related to virtual asset service providers?
▸ How can law enforcement and supervisory efforts related to countering illicit finance in digital assets better integrate private sector resources?
CRYPTO CLASS – Utility Tokens NFTs (non-fungible tokens) are crypto assets that prove ownership of real or digital items. They are typically associated with graphic images purchased by speculators and celebrities. However, there is a subset of NFTs, known as utility tokens, that have value beyond being a unique digital asset. In March 2021, musical group King of Leon released three types of NFTs. Holders of the "Limited Deluxe" version received a digital album, vinyl album, and an animated album cover. "Golden Ticket" holders received tickets to a concert and VIP perks like front row seats for life and a personal concierge for shows. And there was a "Limited Open Edition" which allowed fans to create, or mint, their own "When You See Yourself" NFTs before a deadline. Another popular utility token was "The Muhammad Ali Experience Mystery Box Collection." This NFT had six levels with different perks that included access to the Muhammad Ali Experience Museum, digital Muhammad Ali artwork, a print and canvas signed by Ali, and one signed by artists Mike Bundlie and Lonnie Ali, Ali's wife, which featured $500 of gold flakes. Gary Vaynerchuk launched VeeFriends NFTs which offered access to VeeCon, a conference on marketing and entrepreneurship.
INFLUENCERS - People to follow
RESOURCES – Books, websites, podcasts, interviews, articles, videos CoinMarketCap is not only a great resource for looking at market data on crypto coins, it also has terrific page on latest crypto news. CRYPTO WORD – Dead Cat Bounce. A temporary recovery in prices after a prolonged decrease.
OH, ONE MORE THING – Hmmm...
Thanks for reading! See you next week.