All The Important News This Week
COIN MSTR PLTR DJT SMCI GOLD
Hi fellow investor 👋
It’s been a pretty hectic week in the market this week so I thought I’d summarize it all here for you and tell you exactly what all this news means for your investments.
Crypto News
Coinbase (COIN)
The Wall Street Journal reported that Trump met with Coinbase CEO Brian Armstrong. The discussion was centered around potential appointments for Trumps next 4 years and the possibility of forming a crypto advisory council to establish the correct regulatory guidelines for the whole industry.
This news seemed to be quite brushed over I think but in my opinion it’s an extremely bullish sign for crypto and for COIN (a company that I own). Think about it. The president of the USA (the most powerful man in the world) is meeting with the CEO of of the largest crypto exchanges in the world.
I think this is a sign that the next 4 years will be one of the most memorable periods in history for crypto. We don’t know the exact details of the discussion but my assumption is that big strides are being made to create a much clearer crypto regulatory landscape.
This will further support institutional adoption and provide a much more stable crypto industry that more people will feel more comfortable investing into as the big bear argument over regulation will hopefully become an issue of the past.
For COIN stock as a whole, I think there’s a ton of bullish catalysts for his “collaboration” with Trump. The clear negative though is the alignment with one of the most controversial political figures in the world. If all goes smoothly, I think this will be very bullish for COIN which is still below it’s IPO price, but the aforementioned is a clear risk.
The other risk is the question of over-regulation of a “decentralized” asset like Bitcoin. Will this destroy innovation? Does this basically ruin one of the key aspects of BTC? Hopefully someone like Armstrong can find this balance between government control and decentralization.
Microstrategy (MSTR)
Microstrategy added to their BTC empire with another huge purchase this week. They bought 51,780 BTC at $88,627 per coin which was a total investment of $4.6B.
This means their average BTC investment is now at a price of $49,827.
They also announced a $1.75B convertible note offering which I’d assume is to buy more BTC.
Personally, I don’t get it. MSTR is trading a 3x to NAV and NAV is just basically their BTC purchases. What’s more mental is that Saylor is literally selling MSTR stock to buy more BTC which is then taking the price of BTC and MSTR up (infinitely !).
It’s all too risky for me. I understand that MSTR allows investors to get leveraged investments into BTC at far lower rates than retail investors can but I’m happy owning MY BTC (emphasis on MY) in a cold wallet and waiting. If you’re extremely bullish on BTC and want to try add to your returns, then sure…invest in MSTR.
Bitcoin Options Trading
BTC options trading begins this week meaning people are now able to buy and sell calls/puts on BTC ETFs. This allows the more experienced investors to hedge, and manage risk associated with BTC more which will certainly attract investors. More investment into any asset will increase trading volume and subsequently increase liquidity which will reduce volatility.
I don’t know how significant this will be in terms of reducing BTC volatility, but it’s another step forward in making BTC more commonplace.
Bakkt Acquisition
The final bit of crypto news I’d like to touch on is Trumps social media company (DJT) which is close to acquiring Bakkt, a cryptocurrency trading platform. Not much to comment here aside from reiterating how bullish Trump is on crypto.
This has the potential to be a huge 4 years for crypto markets.
SuperMicro Computers (SMCI)
For those that don’t know the SuperMicro computers story, above is the stock chart.
At the end of August, SMCI’s auditors EY resigned. EY said:
“No longer able to rely on management or the audit committee’s representations.”
“Unwilling to be associated with the financial statements.”
This isn’t the first time SMCI management have had accounting dramas either. As investors, we rely on auditors. We rely on the reliability of the financial statements because they make up the vast majority of our investment theses. If the numbers can’t be trusted, I don’t care about anything else to do with SMCI.
Anyway, this week SMCI announced that BDO (the 5th largest audit firm) had taken SMCI on which led the stock to jump +30%.
Many investors on X were chuffed with this news, but it doesn’t change my view at all. Here’s why:
SMCI would have wanted a Big 4 firm (EY, Deloitte, KPMG, PwC) to audit their financial statements. Big 4 firms audit the biggest companies in the world. It’s just the way it is.
Clearly the other 3 firms in the Big 4 decided that being associated with SMCI would be far too risky despite the very large paycheck. BDO came in to save the day, but I’m still far from convinced and I wouldn’t touch this company with a 10 foot pole. I do hope for the sake of all those who have invested that I’m wrong here, but it’s impossible for me to trust these numbers.
I will say that there have been cases before where companies have returned from situations like this…Marvell Technologies for example. But I’m happy to sit on the fence here.
Palantir - Be Careful
Just take a look at these X posts. I don’t need to provide you with much commentary here:
Gold
I’m no pure commodity investor but I do own some gold and I also own Silvercorp Metals (SVM) which has some gold exposure so I’m clearly a gold bull and have been most of 2024.
On 18th November, golds price surged above $2,600 and Goldman Sachs said they expect +$3,000 in 2025. This is of course bullish news for mining stocks like SVM, hence why I’m holding it.
But why are gold markets booming and likely to continue to boom?
Gold markets are pricing in inflation being back on the rise. 1 month annualized PCE inflation is nearing 4%…again.
Gold markets are anticipating a trade war between China and the United States (Trump).
US deficit spending is now around 10% of GDP which is the same as 2008 levels.
These are all fairly pessimistic takes on current world events, but they’re all very likely.
That’s it for the day
I hope you loved this article. Please do leave some feedback for me.
Please subscribe to my newsletter where I provide investors with all the tools to outperform the market, and retire well before you’re 65. You can also follow me on X.