Are SPAC’s Done Before They’ve Begun?:

It is no secret, but SPAC’s (Special Purpose Acquisition Companies) have been getting hit hard with the most recent market crash and could continue to see more problems due to a variety of reasons. For instance, an ETF (exchange-traded fund) for SPAC’s already exists, however, this is somewhat contradictory since SPAC’s are vastly different from IPO’s; they start out as a blank check company with a time limit attached to them. Because of this, SPAC’s can completely fall through with continuous support from not only the public, but the management team as well. A bubble has formed from all the celebrities trying to tip their toes in the water, only to give off the false promise that this SPAC is going to be profitable. Do investors want to buy a SPAC only because Alex Rodgriguez is involved? No. Simply put, they need more proof that their money is going to the best hands possible. SPAC’s have been around for longer than most people realize, and they are only just now becoming popular among retail investors. But there is a gluttony of SPAC’s trying to do too much, with too little information they can provide to the everyday long-term investor. Virgin Galactic is a great success story, because they timed it much better than any other SPAC, in a period where there just was not a whole lot of competition. And people love outer space, as speculative as it is and will be for the next several years.

The Rise of NFT’s:

Last night, a digital trading card sporting images of Robert Gronkowski sold for $404,835.59. So, it’s probably time for you to finally learn what an NFT actually is. Non-fungible tokens are a new type of digital asset in which ownership of the assets are recorded on a blockchain – a digital ledger similar to the networks that underpin cryptocurrency such as bitcoin (or in Gronk’s case Ethereum). Assets that can be represented as NFT’s range from digital goods to claims on physical assets such as real estate or clothing. Over the next couple years, we will see NFTs used to unlock entirely new use cases that are only made possible by crypto.

At the moment, the most popularized NFT’s have been collectible sports cards and digital art. The NBA has already begun generating NFT-based assets, with the league launching a dedicated collectible site called NBA Top Shot. The platform allows you to purchase videos of famous plays in NBA history, and numerous plays have already for six figures. In the art curating world, famous JPEG and Gif files have been fetching top dollar. The most notable internet image to be minted is Nyan Cat from 2011 which sold roughly $580,000 a few weeks ago.

Now we stand in present-day with Rob Gronkowski launching his own NFT collection auction – something we haven’t from any athlete for the most part, especially one of his caliber. The NFT collection commemorates Gronk’s four Super Bowl championships and features five different trading cards. The cards were created by Black Madre, one of Gronkowski's favorite artists. For four of the cards, 87 pieces will be available. Gronkowski spoke live on Clubhouse, an audio drop-in app, about the possibility of him minting new NFT’s in the future which he said was likely. Still, this didn’t stop the bidding war on Opensea.com for an exclusive 1-of-1 career edition card from raising the final price to 227.28 Ethereum or $404,835.59. Remember, NFT’s can hold tangible assets as well. The card unlocks a meet and greet with the player, two tickets to one of his games, and VIP access to certain events.  

Bitcoin Update:

As Bitcoin begins to mount past the 60,000 mark, it is quite feasible to us from a technical standpoint that Bitcoin could accelerate to approximately 70,000-75k in its next move (this trend). To our understanding, we feel as if the Tether Risk that posed a threat to bitcoin while it is not over, it has been realized in its price action. Ever since the NYAG filing surrounding Bitcoin, it declined in price significantly and people believed that it was perhaps another fad. But then some companies took the opportunity to play catch up in allocating a piece of their Treasury into the Crypto Network. Elon Musk put a significant amount of Tesla’s Balance Sheet into Bitcoin. Clearly if these multi-billion dollar corporations can see past the tether risk of bitcoin and view it is an entry point, then it reinforces our fundamental thesis surrounding the Long Term fundamental Prospects of Bitcoin. It’s perhaps a signaling shift in what the World, not the united states, views as the next Universal Currency. Elon Musk has made over 1 billion dollars from his original investment in Bitcoin. At first, it seemed like a really poor idea, considering who Elon Musk is – a master tweeter. But in retrospect, Tesla being the first company other than the credit card companies and Square to adopt it to its balance sheet, was ingenious. Elon putting pressure on the largest publicly traded companies, forces others to adapt or potentially get left behind. We are personally waiting to see which company will be the first to adopt a crypto that isn’t Bitcoin to their balance sheet. It also wouldn’t surprise us if Cathie Wood was to make a new Ark ETF that is solely focused on the companies that own and mine bitcoin. The only other risks we view as inherently pertinent to Bitcoin in the interim as more and more business adopt it as a form of payment, is the tax implications. If I were to theoretically invest 20k in bitcoin 2 years ago and now used a portion of my bitcoin to pay for my new Tesla, what are the tax implications? You could buy a tesla today for 50k by only transferring a fraction of your initial investment to Tesla for Payment. I’m technically not selling anything for Capital Gains, but I am getting a product by paying with something that’s appreciated in value without being taxed. I have to imagine this would be the Next attack by regulators on Cryptocurrency. But this also reveals a deafening blow in the attack from Regulator’s on the Crypto Network, they’re getting FOMO. They will have shifted their stance to try and find out how to solve these tax problems with bitcoin evolving as a universal currency and by that point they are on defense, the change is already here. Bitcoin is here to stay, Regulators are using damage control now, the gig is up, Bitcoin is being Validated.

GameStop Fiasco:

GameStop continues to defy the boundaries of the stock market. From what was a dying company on the verge of bankruptcy, has now become the largest market capitalization stock in the small-cap Russell 2000 ($IWM). It truly is incredible how GameStop has become a macro indicator of where the US economy is going, especially after everything they have been through on the way down from the peaks of the $500 dollar range. On big down days for the market, it outperforms everything, and on up days, it still exceeds. Why would anyone bother buying anything on a down day, when they can put a little money in GameStop? It’s basically the equivalent of throwing your stimulus check at Bitcoin. But as controversial as it is, at least Bitcoin provides a unique service that is vastly superior to other methods of transferring money. Makes you wonder if the market will recover from this terrible month if and only if GameStop comes back to Earth, but the damage is already done. If you throw enough money at a stock, it must eventually go up, no matter the valuations, as they are merely irrelevant at this stage.

The technicals are also completely broken and now trading algorithms are keeping it afloat during low-average volume days. GameStop is unique in how it’s traded in the early stages of pre-market. Typically, it’ll run up more during the first two hours of early premarket than it will during when the market is open. Studying the option data is another example of how unique this stock is traded. For those unaware, you can buy very cheap options for GameStop that are way out of the money, and for the most part, 95% of the puts bought on GameStop almost every day were in this range with ultra-low deltas (meaning cheap prices proportionate to the stock itself). This shows people are afraid to short the company, as they are only banking on scenarios where GameStop crashes back to where it was before this whole debacle began. It’s like shorting Tesla back over the summer. You have much more to lose than to gain. The opposite of the idea applies for the call options but to a way lesser degree. People would actively post about it on Twitter and other forums about their $800 call options expiring last week. Talk about extreme risk/reward. And whenever any form of news at all surrounding GameStop comes out, the reaction is as always incredibly overblown. For example, last week the company announced a shift over to e-commerce with the help of the Chewy co-founder: Ryan Cohen who originally started the hype back over the summer. As a result, shares exploded by 35% and have continued to maintain the $250+ range. Who knows what will happen when they have earnings later this month? On 3/10 we saw one of the biggest whipsaws in ages. To elaborate, GameStop was having another remarkable day, it was breaking past all its resistance levels in the $300 dollar range, where it peaked at $350. Then it gets halted five times as it dropped all the way back to $150 in less than 15 minutes, where it recovered and stabilized in the $250 dollar range to close the day. If that’s not market manipulation, then I don’t know what is.

As previously discussed, now that most of the original pool of retail investors from Robin Hood have shifted their funds and profits into other brokerage accounts, CEO Vlad Teniv is running out of options after over-flexing his power. Of course, he has good intentions supposedly, but doing something as abrupt as that is, in my opinion, a public relations nightmare. Few remember back in March of 2020 during the original crash induced by the coronavirus, where Robin Hood’s servers crashed on what was one of the largest down days during that month of pure chaos. Investors could not liquidate their short positions, and thus got killed when Robin Hood came back during the middle of the day. This was all due to a coding error surrounding the leap year, which frankly is astonishing for a company as established as them. Regardless, GameStop will always be the first company we check every day because it is so influential at this stage and everybody knows the brand at this point.