The banking crisis seems to have abated – at least for the time being – so itās time to consider where the next threat to financial stability is going to come from. Well, commercial real estate is looking like a strong candidate.
Like so much else, commercial real estate went on a tear during the pandemic, as investors were able to take advantage of low interest rates to refinance their debts. But, as we know all too well, those days of essentially free money didnāt last. Rates have been increasing at breakneck speed over the last twelve months and that caught many investors in the sector napping.
Then came the banking crisis, which has made banks much less willing to extend loan agreements or make fresh loans available. Add to this the fact that many commercial real estate loans originate from small and medium-sized banks – which are feeling the pinch especially hard – and the outlook darkens still further.
In todayās video, we examine the commercial real estate sector and assess just how much trouble it could be in. We dive into the risks facing it and look at what the upshot of all this could be.
You can watch thatĀ video here
šĀ Crypto Market ForecastĀ š
Itās been a wild week in crypto, and the industry has another turbulent seven days ahead. For starters, Americans will have to file their taxes byĀ Tuesday, 18th April. This is important to point out, because itās possible that we could see some last-minute asset selling as Americans realise that they owe more tax than they expected. Case and point,Ā data by Civic ScienceĀ suggests that Americans expected to owe more in taxes and get less tax refunds for 2022. Extra tax payments and less tax refunds could therefore result in some selling of assets on the periphery.
On the same day, Binance.US willĀ also be delistingĀ Tronās TRX and Abracadabra Moneyās SPELL token, which is used to govern the decentralised stablecoin Magic Internet Money (MIM). This is significant, because it suggests that stablecoins are facing extreme regulatory scrutiny. For context,Ā Tron launchedĀ the USDD stablecoin last May. USDD uses a āmint and burnā mechanism thatās similar to Terraās UST. This is probably raising red flags among regulators, and the scrutiny of SPELL could mean that the stablecoin crackdown is only getting worse.
Speaking of Binance, the international version of the exchange will allow holders of Binance Staked ETH (BETH) to start claiming the underlying ETH onĀ Wednesday, 19th April. This could potentially add to the sell pressure on ETH, which has so far been next to non-existent. This is surprising, considering that hundreds of millions worth of staked ETH and rewards have been withdrawn, with aroundĀ 1.5 million ETH pending. Obviously, this ETH isnāt being sold, but then why are Ethereum validators withdrawing their ETH stakes? Why not just keep staking?
In any case, another thing to watch out for on Wednesday is crypto regulations in the European Union, specificallyĀ the debateĀ about the Markets in Crypto Assets or MiCA bill. The debate is somewhat surprising considering that the regulation is supposedly a done deal. The thing is that MiCA was written and passed prior to the collapse of FTX and all the stuff weāve been dealing with since. Not surprisingly, many EU politicians and regulators have called for an overhaul of MiCA, with the European Central BankĀ recently sayingĀ that more rules are required.
This ties into another regulatory wildcard, and thatās the SECās ongoing case against Ripple over sales of XRP by the company and its executives. Last week, the SECĀ filed a letterĀ with the court which showed that the judge presiding over the case had ruled against the defendant in a different case involving the fair notice defence.Ā For reference, Ripple and its executives are arguing that they should not be fined because they werenāt given fair notice their XRP sales constituted sales of unregistered securities. This filing could be bad news for Rippleās defence.
On that note, uncertainty still remains over ETHās regulatory status. This is because SEC Chairman Gary GenslerĀ reportedly believesĀ that all proof of stake cryptos are securities. In fact, he believes that all cryptos besides BTC are securities. Given that validators are able to unstake their ETH, could this change ETHās status in the eyes of the SEC? While anything is possible with Genslerās gang, I think itās quite unlikely and thatās mainly because the SECĀ doesnāt have the money!Ā NGMI.
š¤Ā Is AI a Threat?Ā š¤
While AI tools like ChatGPT have had a significant impact on innovation recently, there have been growing concerns about the potential dangers AI poses.
Specifically, a recentĀ petitionĀ published by the Future of Life Institute (FOLI) called for a 6-month āpauseā on further development of āhuman-competitive intelligenceā models that are more powerful than GPT-4, due to the āprofound risks to society and humanityā posed by them. Interestingly, the letterās signatories include prominent tech leaders such as Elon Musk, Steve Wozniak and the CEO of Stability AI.
But what are these āprofound risksā exactly?
Well, to start, the petition states that AI development has been off the rails due to AI labs racing to create and deploy powerful digital minds that not even they themselves can reliably understand, predict, or control.
The authors of the petition state that this will eventually lead to AI bots causing the downfall of civilization, due to the large-scale automation of the many jobs. Thatās something I spoke about inĀ my videoĀ last week.
However, critics have spoken out against the FOLI petition,Ā calling the letterĀ itself an attempt by OpenAI and its allies to consolidate their dominance by building an extended innovation lead over their competitors. They state that the proposed pause would consolidate control of AI development among the wealthy and powerful and eventually irreparably harm AI development as a whole.
This view seems to only be further validated by Twitter CEO Elon MuskāsĀ allegedĀ recent purchase of nearly 10,000 graphics processing units (GPUs) for developing Twitterās AI infrastructure, which needless to say appears to be a direct contradiction to his support of arresting AI development.
However, it isnāt just corporations or individuals that have been campaigning against the use of AI. Countries have also been taking a proactive step in placing restrictions or controls on the use of AI products in their territories. ItalyĀ recently banned ChatGPT and opened an investigation after its national data agency raised concerns about possible privacy violations by the software.
Following Italyās move, other countries such asĀ China,Ā Canada,Ā Germany, France and Sweden all announced that they were placing restrictions or opening investigations into possible privacy law violations by ChatGPT .
I canāt say these fears are completely unfounded. Especially since there has been a long-standing debate over the use of copyrighted information in training AI models. The most notable example is theĀ Universal Music GroupāsĀ recent request to block AI-generated songs on streaming platforms after many of these songs were almost indistinguishable from the real versions.
In summary, I canāt say for sure how much of this fear surrounding AI is warranted, but I do know that such pushback is common every time we encounter a disruptive technology. But with consistent effort and innovation, there might be enough progress to spark an unstoppable wave of innovation.
Thatās how we got here after all, from a single cryptocurrency called Bitcoin to a vast ecosystem of programmable money systems, decentralised governance and permissionless markets.
šĀ Personal PortfolioĀ š
BTC 36.16% | ETH 33.04% | USDC 16.06% | USDT 6.43% | ATOM 3.55% | USD 3.24% | DOT 1.48%
š„Ā Deal of The WeekĀ š„
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One of these is Bitget, a Singapore based exchange that has a wide array of different altcoins on offer. They also have a highly functional trading platform as well as completing numerous proof of reserves.
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š®Ā Video PipelineĀ š®
- US Government vs DEFI: Problems brewing?
- A16z State of Crypto Report: What you need to know!
- Countries Behind The Next Bull Run: What to expect?
- Top Crypto Twitter Accounts: Who to follow?
šĀ What's New At CoinBureau.com This Week?Ā šā Ā Top 5 AI Crypto Projects:Ā Artificial Intelligence on the Blockchain!
Thatās all for this one. Thanks as always for all your support š
Team Coin BureauDisclosure: Authors may own cryptoassets named in this newsletter.Ā These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.
