Biden Go Brrrr, Apple's Awkward Advances, Critics Eat Crow, and Cathie's Clap-back
May 28th | Sign Up
Happy Friday. Today is National Sunscreen Day, conveniently placed on the calendar as a reminder to protect your skin as we usher in (DeFi?) summer ☀️
Price Check 📉
⬇️ Bitcoin: $35,727 (-9.0%)
🩸 Ethereum: $2,475 (-11.4%)
🩸 Dogecoin: $0.30815 (-10.6%)
🩸 SushiSwap: $10.91 (-13.2%)
🩸 Polygon: $1.78 (-20.4%)
⬇️ Nasdaq: $13,736.28 (-0.01%)
Prices as of 2 AM EST 5/28, data from Coingecko, Yahoo
Markets: Stocks ticked up slightly towards the end of the week as weekly jobless claims fell to a 14-month low. Crypto markets slipped on Thursday with the total crypto market cap fading just under 5% on the day. Meme stock AMC left all other assets in the dust, rising more than 35% (+1,200% on the year).
Covid: Biden asked the intelligence community to get to the bottom of the origins of covid-19 after new reports raised questions about whether it spread from a laboratory in Wuhan, China. The Prez wants a report back in 90 days.
Biden Dusts off the Money Printer 🖨 💸
President Biden is set to unveil his $6 trillion infrastructure budget proposal today, the first long-term fiscal plan of his presidency. Those familiar with the plans predict an update to the nation’s infrastructure, healthcare, education, and social services.
The budget request—expected to be laid out in detail today—aims to finance the proposal through higher tax rates on the highest-earning Americans and corporations. Not without pushback from the wealthy and corporations of course.
Some number crunchers advise erring on the side of caution, praising the president’s commitment to paying for new spending and improving the nation’s infrastructure but warning of the daunting fiscal challenges that lie ahead.
Death and Taxes 🪦
Investors are most worried about how much their gains will get taxed under the president’s new plan. The plan is expected to raise the capital gains tax from 23.8% to 43.4% for households with income over $1 million. In other words, if you’re on Robinhood, you have nothing to worry about. If you do fall into that richer tax bracket, there’s no getting around it because the effective date for the increase would be tied to his announcement of the American Families Plan, released on April 28th.
As part of the American Families Plan, Biden said he’d raise the top individual income tax rate to 39.6%. The president also wants households with an annual income of $1 million or more a year to pay that rate on long-term capital gains. Currently, those households avoid the hefty tax by holding on to their assets and passing those unrealized gains on to their heirs tax-free.
Mr. Biden plans to close this loophole by taxing unrealized capital gains over $1 million upon death ($2 million for married couples). In short, your Dogecoin (or any other asset) passed onto anyone surviving you, would be treated as though it had been sold, and gains over $1 million would be taxed at the higher rate. We sincerely hope that the only thing you leave behind for your children isn’t Dogecoin.
Some stats on the bill 📊
Total spending would rise to $8.2 trillion per year by 2031
The highest sustained level of spending since WWII
Runs deficits above $1.3 trillion over the next decade
Total debt rises to 117% by 2031
What does this mean for the markets?
The fear of inflation, taxes, and regulation that will result from the bill are all things that the markets will reflect after Mr. Biden’s plan is laid out and accepted or rejected. Will the fears of taxes, and inflation outweigh the effects of fresh dollars being injected into the economy? Don’t look at us, that’s anyone’s guess—if we knew—we would be leasing out the crystal ball, not writing a newsletter. But if you want to know what the big brains are thinking, hop in the free Zoomer Money discord server. By the way, does anyone know a good plumber? We keep hearing our alpha is leaking…
Apple Flirts With Crypto ⌚️
This week Apple posted a job ad titled, “Alternative Payments Manager” with the requirements highlighting blockchain and crypto payment experience. The new job posting has caught the eye of crypto investors, potentially hinting at the tech giant’s highly anticipated entrance into the crypto world.
Think you got what it takes? 💪
Here are the requirements if you’re planning on shooting your shot:
5 years of working with digital wallets and/or cryptocurrency
10+ years of professional experience with 6+ years in business or market development at multiple companies in financial services segments.
Direct experience in structuring partnership deals, negotiating business and technical terms across multiple partners in the payment industry.
Deep knowledge of the alternative payments ecosystem, understanding the complexities of funds flow, roles/responsibilities for settlement, relevant regulations, and industry standards
We’re still wondering…what does Apple have up its sleeve? Some speculate an integration with Apple Pay, but Apple almost always moves in secrecy so don’t expect to really know until it happens.
The ball is in your court Apple, and we’re all waiting…
Other companies flirting with crypto payment processing 💄
Payroll provider ADP sent out a sneaky survey to its customers yesterday asking about crypto. More evidence that legacy payment-processing companies are starting to get their toes wet with this crypto stuff. Is this what institutional adoption looks like?
NFTs Are Here to Stay 🖼
You assumed that the NFT hype train had left the station especially since last week’s market unforgettable market crash, didn’t you? Well, data actually suggests the opposite. Despite the historic market-wide crypto crash that wiped over a trillion dollars off the total crypto market cap, NFTs have actually increased in trading volume, with roughly 82,000 NFT sales per day in May.
Since the beginning of the year, NFT daily sales have steadily risen from 24K to 82K NFTs being sold on average per day. This is a 300% increase in daily NFT sales on the year, with no signs of slowing down. Volume is up but the average sale price is down, potentially signaling valuations coming down to earth and the barrier lowering for new metaverse participants.
Moar NFTs 🎭
Yesterday, internet trend brand Meme.com announced it had raised $5 million in funding for a new marketplace focusing specifically on meme cryptocurrencies and NFTs. The goal is to create a platform where users can compare memes and trends in an organized, data-driven manner. Think CoinMarketCap, but for memes.
Billionaires Eat Crow 🍴💬
Former billionaire Bitcoin critics are coming out one by one trying to save their reputation as they realize the permanence of cryptocurrency. In other words, the rich boomers of the world are realizing they were wrong on crypto. What a surprise…
The first notable billionaire to retrace their steps was hedge fund manager Ray Dalio, who in 2017 said Bitcoin is a bubble. Fast forward to today and he reveals, “I have some bitcoin,” during the 2021 Coin Desk Consensus conference. Ray had been a skeptic even up until 2020 👇
Next up, Carl Icahn
Carl Icahn, another billionaire hedge fund manager and former bitcoin critic, has also recently come out in support of crypto, even hinting that his firm is looking to make a big purchase.
The activist investor said he’s looking at investing in crypto in “a relatively big way,” clarifying that “big” could mean “a billion dollars, billion-and-a-half.”
Once comparing cryptocurrency to the 18th century Mississippi land bubble that led to the collapse of European stock markets, Mr. Icahn now has a change of heart and says he is intrigued by cryptocurrency’s potential.
How it started: (peep the date)
How it’s going:
Small Bitez 📰
Nebraska Signs a new Law to create crypto bank charter
PayPal will allow users to withdraw cryptocurrency to third party wallets
ETF-specialist firm WisdomTree files an Ethereum ETF application
BlackRock says it is 'studying' crypto but cites volatility
Gitcoin, a platform for getting paid to work on open-source software, announces the launch of its governance token
Cathie Plays the Blame Game 👉👈
Cathie Woods, found and CEO of ARK Invest, was also at the 2021 Coindesk Conference and gave her two cents on what caused the crypto crash. Wood said “a lot of institutional buying went on pause,” and that “It was precipitated by the ESG [environmental, social and governance] movement and this notion, which was exacerbated by Elon Musk, that there are some real environmental problems with the mining of bitcoin.”
“Elon probably got a few calls from institutions”, Cathie said in the interview citing that BlackRock is the third-largest shareholder of Tesla. Probably called him up to tell him to chill.
TLDR; Cathie says it is Elon and tree-huggers faults
Cathy did extend the olive branch in the end, saying that Elon would be good for bitcoin and its environmental impact in the long run:
He has encouraged a lot more conversation, a lot more analytical thinking. And I do believe he’s going to become a part of the process
The Big Picture
We gave you the scoop on Bitcoin’s environmental impact in Monday’s letter, but whales will be whales. The market isn’t always powered by facts and fundamentals, but by sentiment—and lately, a whole lot of FUD and FOMO.
Thanks for reading! 👋
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