💰 Bitcoin's rice cooker moment

Wednesday, March 31, 2021 by Robinhood Snacks | Disclosures

When the check comes but they don't take litecoin

Dow Jones
33,067 (-0.31%)
S&P 500
3,959 (-0.32%)
Nasdaq
13,045 (-0.11%)
Bitcoin
$58,644 (+1.76%)

Hey Snackers,

You might wanna give that eBay dining set a second look: a guy bought a $35 bowl at a yard sale. Turns out, it was a rare Chinese artifact... that sold for $722K.

Stocks dipped yesterday ahead of President Biden's speech on his big infrastructure proposal.

Coin
1. PayPal launches cryptocurrency payments (the Crypto Mainstream-ification intensifies)

On the (block)chain... is the new off the chain. Over the past year, bitcoin has ~9X'd in value as corporate and retail investors have poured into crypto. In January, the crypto market hit $1T in total value (mostly bitcoin). Now, the mainstream-ification is intensifying: Venmo-owner PayPal, which has a whopping 377M active accounts, is embracing the crypto life.

  • "Checkout with Crypto": Yesterday, Paypal officially launched the service in the US, allowing users to pay with crypto at online stores.
  • 29M: In the coming months, PayPal will expand crypto checkout to 29M merchants. Customers with PayPal digital wallets can pay in bitcoin, ether, bitcoin cash, and litecoin.
  • BTW: Visa also just announced that it'll allow people to use the cryptocurrency USD Coin (a US dollar-backed stablecoin) to settle payments.

Paying with crypto... but not really paying with crypto. Customers' crypto holdings will be converted into fiat currencies (like US dollars) at checkout. It's kind of like selling a fraction of your BTC, then using the sale money to buy a rice cooker. Merchants don't actually get paid in crypto — and that's way safer for them, since crypto is so volatile.

  • For merchants: Imagine if Adidas was selling a hoodie for $50, and you bought that hoodie with a (tiny) fraction of bitcoin. Now imagine if that tiny fraction of bitcoin was worth only $20 the next day. Adidas lost $30 on that bit-transaction.
  • For buyers: Imagine if you bought a $58K car with one BTC, and the next day that same BTC was worth $60K. You would've lost $2K in value. If the value of BTC plunged to $56K the next day, you would've saved $2K. Not super practical either way.
THE TAKEAWAY

BTC is still mostly viewed as a speculative investment (not a currency)... It's too volatile for most to use it as currency, which is why PayPal is converting it (and why Visa is only allowing a stablecoin). It's also why Tesla — which now lets people directly buy cars with actual bitcoin — has instituted a 30-minute purchase window. Given BTC's surge this year, some investors also see more potential upside in holding on to it rather than using it for purchases. But as we've seen in the past (see: 2018), bitcoin has a big potential downside, too.

Gusty

Jersey Shore ... but it's a clean energy reality. The Biden admin just announced ambitious plans to increase America's offshore wind energy. That includes a massive wind farm off the New Jersey coast, which the White House is already taking steps to approve. Picture: dozens of massive spinning wind turbines in the Atlantic Ocean. President Biden's goals for this initiative:

  • 10M homes powered by wind energy by 2030
  • 77K jobs created to support building wind farms
  • 78M metric tons of carbon dioxide emissions/year avoided
  • 30 gigawatts of offshore wind power capacity — right now, the US is expected to have less than 20 GW by 2030 (so 30 is ambitious)

Vineyard Vines... and Vineyard Winds. Right now, the US only has two tiny wind farms (near Rhode Island and Virginia). But there are 13 offshore wind projects under federal review, including "Vineyard Wind." If the proposal gets green-lit, 84 turbines would live (rent free) off the coast of Martha’s Vineyard. This month, the Biden admin took a crucial step toward approving a review of Vineyard Wind, Americas' first large-scale offshore wind farm.

THE TAKEAWAY

Government priorities = corporate opportunities... Biden's "Build Back Better" plan proposes $2T for clean energy innovation and infrastructure. The White House estimates that $12B worth of investments per year would be needed to hit the 2030 wind targets. That could be a big opportunity for wind energy companies. Like: GE (which is testing a monster-sized offshore turbine), NextEra (North America's largest generator of renewable wind energy), and Vestas (a Danish turbine manufacturer).

What else we’re Snackin’
  • Lulu: Lululemon's online sales nearly doubled last quarter from 2019, and it made $1.7B in profit as the legging life stretched on.
  • Taxy: Senate Dems propose a post-death capital gains tax for the wealthy (the only thing that's certain is death and taxes — or a combo).
  • SelfGuacing: Chipotle invests in driverless delivery company Nuro. Self-driving burritos could be coming.
  • Zucked: Spotify buys Clubhouse rival Locker Room to get in on the live social audio trend.
  • Carole: Cameo, the startup that lets you request personalized vids from celebs, raised $100M at a $1B valuation.
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Authors of this Snacks own: Bitcoin

Correction: Yesterday we said that New Yorkers age 30 and up will be eligible for Covid-19 vaccines starting April 6th. They are actually eligible as of yesterday.

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