Tuesday Oct.19, 2021

🪙 Bitcoin’s futures

Morning stroll through the meta neighborhood [gremlin/E+ via Getty Images]
Morning stroll through the meta neighborhood [gremlin/E+ via Getty Images]

Hey Snackers,

The opposite of “You’re a wizard, Harry”: After more than two decades on the job, the official Wizard of New Zealand has been fired.

Stocks gained today as investors kept a close eye on corporate earnings. 80% of the S&P 500 companies that have reported so far have beaten profit expectations, despite rising prices and supply pains.

Future

The first Bitcoin-linked ETF could pave the way for a more mainstream future

Back to the futures... Big day for crypto: Today the first-ever Bitcoin-linked ETF is expected to start trading on the New York Stock Exchange. Refresher: ETFs, or exchange-traded funds, traditionally track an index (like the S&P 500), a sector (such as tech), a commodity (like oil), or other assets. In this case, the new ETF will track Bitcoin futures. It’s the first Bitcoin futures ETF that the SEC will allow on the market. Breaking it down:

  • Futures, aka futures contracts, are agreements to buy or sell an asset in the future at a specific price. In this case, futures let investors speculate on BTC's future price.
  • Because this ETF tracks futures, it doesn't invest directly in Bitcoin — and its performance could differ from BTC's actual price.

So much future... The launch of this ETF is a milestone for the crypto industry, which has struggled to gain acceptance in the tightly regulated financial space. About 14% of people in the US — mostly high-income men — own cryptocurrency, according to Gemini’s 2021 “State of US Crypto” report. BTC futures could make crypto more accessible to a wider base who might not have invested in crypto.

  • BTC exposure, minus the BTC: Futures give investors exposure to Bitcoin without having to hold or exchange the crypto. No Bitcoin wallet required.
  • Regulated alternative: BTC futures are traded on a regulated exchange, which may offer some investors more confidence than directly investing in unregulated Bitcoin.
  • Wider access: Investors with regular brokerage accounts can access BTC futures ETFs without having to create an account with a crypto provider.

The next step in crypto "mainstreamification"... could be futures. Two-thirds of US adults who don't own crypto are "crypto-curious,” according to Gemini. Three additional Bitcoin futures ETFs are expected to launch this month, with others in the pipeline. What the crypto industry ultimately wants: funds that invest directly in crypto. So far, the SEC has shot all of them down.

Meta

Roblox lays the foundations for a kid-safe “metaverse” — but it needs adults, too

Avatars grow up so fast… Tween-favorite gaming platform Roblox announced it has 43M daily users — double what it had two years ago. Roblox, which went public in March and has a $44B market cap, is like YouTube for user-generated games (think: Lego-like avatars). This year Roblox expects to pay out $500M to 1.3M content creators.

  • Wild stat: Last year in the US, 75% of kids ages 9 to 12 played Roblox. The platform has come under scrutiny over safety issues, but has taken steps this year like launching content ratings for games and bolstering parental controls, to promote safety.
  • FB-owned Instagram Kids, however, got paused last month after getting backlash for its lack of parental controls. Experts say platforms like Facebook, Instagram, and TikTok lag behind Roblox in their efforts to curb bad behavior (though even Roblox isn’t perfect).

Adulting welcome… It’s not just young kids Robloxing. Last month Roblox said that for the first time over half its users were older than 13. Last week it announced several features to appeal to non-tweens and adults:

  • Realistic avatars offer alternatives to cartoonish characters, and 13+ gaming filters allow games catered to older players. AI-powered voice-chat features are set to roll out to older users too.
  • Limited e-merch, which could appeal to older users interested in fashion and NFTs, will go on sale for Robux, an in-game currency bought with actual bucks.
  • Getting meta: Roblox hosts virtual concerts and brand-sponsored meeting spaces, and sees itself as a hub for an immersive “metaverse” — a digital world where kids and adults can “learn, work, play, create, and socialize.”

The race to the metaverse is on… And safety is key to success. Roblox wants a piece of the metaverse market, which could hit $800B by 2024. Think: hanging out in VR with your friends' avatars, and entering VR stores where you can shop "in person" and online. Epic Games, ByteDance, and Tencent are also building metaverse experiences, and Facebook just announced plans to hire 10K metaverse-focused employees. But Roblox’s platform, which is already kid-focused, could appeal to new users looking for the safest metaverse.

What else we’re Snackin’

  • Scroll: Real-estate giant Zillow said it would stop flipping houses (aka “iBuying”) for the rest of the year — it can’t find enough workers to renovate them.
  • Swipe: Supply-chain shortages are causing so many delivery delays that gift cards are expected to make up 40% of total gift purchases this holiday season.
  • Step: Johnson & Johnson shifted its cancer-related Baby Powder lawsuits into a new biz, which then declared bankruptcy — a move called a “Texas two-step.”
  • Doubts: Members of Congress asked Amazon to provide evidence that its executive didn’t lie in recent hearings, signaling a potential investigation.
  • Juiced: Toyota and Chrysler parent Stellantis each announced plans to build EV battery plants in the US, a sign of the EV industry’s domestic acceleration.
  • iNouncement: Apple launched new iPods and MacBook Pros at its big event, and they’ll reportedly be ready to ship for the holiday season.

Tuesday

  • Earnings expected from Johnson & Johnson, Procter & Gamble, Netflix, Philip Morris, Ericsson, Halliburton, and United Airlines

Authors of this Snacks own: Bitcoin and shares of Apple and Amazon

ID: 1882102

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