WEEKLY BUSINESS ROUNDUP
Global Business Week: The World’s 25 Richest Millennial Billionaires
The state of Financial markets & Economies, Weekly Charts, Business Trends & Statistics
The month of May ended on a positive note for the U.S equities, marking four straight months of gains for the S&P 500. The benchmark index is just 1% below its all-time highs. Stocks inched higher Friday to finish in the green for the week, as optimism over the post-pandemic U.S. economic recovery grew. Although tech stocks were the leaders on Friday, stocks tied to the recovery have been carrying the overall market for the past two months.
Overall, the month of May was a choppy one where volatility returned with a vengeance, and meme stocks were also back in play — as the investors closed their books ahead of the long weekend. Most major global markets remained flat-to-higher with notable outperformance in Canada and Europe. Treasury yields edged lower for the week, with benchmark 10-year yield down three basis points to 1.58%.
The ongoing erosion of US real yields, thanks to rising inflation expectations and stagnant US Treasury yields, proved to be a negative influence on US Dollar price action — like it was for much of 2020. The US Dollar index (DXY) did not have a good month of May, despite favorable seasonality conditions otherwise. The ongoing erosion of US real yields, thanks to rising inflation expectations and stagnant US Treasury yields, proved to be a negative influence on US Dollar price action.
The reasonable hope for Greenback currently hinges on a pullback in commodity problems while the U.S economic data outperforming, which in turn would churn towards higher US nominal yields and lower inflation expectations — lifting the US dollar.
It was yet another eventful week in the Cryptoverse — the digital assets were looking to consolidate after the massive fall earlier. After a nice little rebound in most of the cryptos, they seem to have turned lower again. At the time of writing, Bitcoin was trading just above $33.7k while Ethereuem was hovering around $2225. BTC seems to be the weaker of the two, trading below its price floor of 37.8k whereas ETH’s identical level lies at $1700. Short-term bearish pressure persists as we look for further action next week.
Today’s featured infographic (above) lists 25 of the richest billionaires. There are 2,755 billionaires globally with a combined net worth of over $13 trillion. Of these ultra-wealthy individuals, just over 100 are millennials, born between the years 1981 and 1996. This young generation represents around 3.8% of all billionaires on a global basis with a combined net worth of $573.1 billion. This visualization by Visual Capitalist was created by using data from Forbes and ranks the richest 25 millennial billionaires on their source of wealth, total net worth, nationality, and age.
And finally, before moving on to some other statistics, here are the weekly & YTD numbers from various markets and different assets (Figure 1).
Bitcoin’s AUM Share Drops
Bitcoin’s share of AUM (assets under management) dropped by 29.1% to $31.1bn (now 69% of total AUM vs 78% last month) while Ethereum’s share grew 24.8% to $11.2bn (now 25% of total AUM vs 16% last month). In terms of product type, AUM represented by Trust products (dominated by Grayscale) decreased by 21.6% to $37bn (82% of total AUM). Meanwhile, AUM represented by ETCs (dominated by XBT Provider) decreased by 10.6% to 4.1bn (now 9% of total). AUM represented by ETNs decreased 36.5% to $2.2bn and now constitutes 5% of the total AUM. The data was provided by CryptoCompare (Figure 2).
Jeff Bezo’s Expanding Empire
On May 26, 2021, Amazon announced its plan to acquire Metro-Goldwyn-Mayer (MGM) studios for $8.45 billion, making it the company’s second-largest acquisition to date. Amazon has acquired multiple companies across a variety of sectors from healthcare to entertainment, helping diversify its core business model. In total, the tech giant has acquired or invested in over 128 different companies over the last 20 years (Figure 3). What else is left for the richest person on Earth to buy?
Tesla Dominates American EV Sales
Talking about the richest people, Elon Musk’s Tesla dominated EV sales in the U.S for the preceding 3 years. According to a recent analysis from BuyAutoInsurance.com, the 10 most popular electric vehicle models in the United States over the past three years had total combined unit sales of 568,000. Approximately 430,000 of them were Tesla models, providing the company with an impressive 74% market share (Figure 4). While Tesla has never made its numbers public, organizations have used resources such as registration data to estimate sales with a high degree of accuracy.
China is Bitcoin Mining Powerhouse
According to the Cambridge Bitcoin Electricity Consumption Index, Bitcoin mining consumes around 112.57 terawatt-hours per year of energy, more than entire countries such as the Philippines. Mining defenders say most of that energy comes from unused or recycled energy, but no one has been able to prove that definitively. China accounts for about 65% of the world’s bitcoin mining, and Inner Mongolia accounts for around 8% globally, a greater share than the U.S. (Figure 5). China has been cracking down on cryptocurrencies as far back as 2017 when the government shut down local crypto exchanges and banned initial coin offerings. That just drove the action underground, offshore, and into remote regions like Mongolia.
Most Efficient Unicorn Investors
Using CB Insights data and their real-time unicorn tracker, they dug into investors’ portfolios to see which have backed the most current unicorns when they were just taking off (as of Q1’21). Smart Money investor Benchmark leads in efficiency for early-stage unicorn investments, with a 90% efficiency rate. This means that of the 10 unicorns in its portfolio, it backed 9 of them at the early stage (Figure 6). To point to an example of one of its successful early-stage bets, Benchmark participated in chat platform Discord’s Series A round in 2013, when the company was valued at $23 million. As of December 2020, Discord was valued at $7 billion.
Sustainable ETF Universe
Globally, sustainable exchange-traded fund (ETF) assets hit $150 billion last year, vaulting 25 times higher than in 2015. Yet despite this growth, sustainable ETFs — baskets of investments that focus on environmental, social & governance issues account for roughly 5% of the entire ETF universe. What makes up this rapidly growing market? Where are the most common areas for investment? To answer these questions, the infographic below (Figure 7) from MSCI breaks down the sustainable ETF universe.
Africa’s Startup Activity
AfricArena has released a new report using Partech data which has forecast that virtual capital funding for African startups will amount to between $2.25 billion and $2.8 billion this year, a record high for the continent. Africa’s VC investments reached an all-time high in 2019 when 234 tech companies raised $2.02 billion in 250 equity rounds, a 74% increase on the $1,163 recorded in 2018 (Figure 8). While the pandemic resulted in major setbacks in 2020 with growth declining 29%, the good news is that major improvements are expected. In 2022, VC investment is expected to climb sharply to between $3.8 billion and $4.7 billion while the upper range is expected to be $6.8 billion by 2023. By 2025, VC investment in Africa is forecast to exceed $10 billion.
Market Humor: When they talk, the Market listens
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