Trump Expands Into Crypto Market

CRYPTO
Trump Expands Into Crypto Market

Donald Trump’s Media and Technology Group (TMTG), the parent company of Truth Social, is reportedly in advanced talks to acquire crypto exchange Bakkt in an all-stock deal. Bakkt, owned by Intercontinental Exchange, has faced challenges, with a market capitalization of just over $150 million and insufficient funds to sustain operations for 12 months. However, Bakkt’s crypto custody business will not be part of the acquisition.

The deal highlights Trump’s growing interest in cryptocurrency, following his promotion of World Liberty Financial, a DeFi platform tied to his family. TMTG’s $6 billion equity valuation, driven by retail investor enthusiasm post-re-election, contrasts sharply with Bakkt’s struggles, including the discontinuation of its digital wallet in 2022.

Initially launched to enable bitcoin payments at Starbucks, Bakkt has shifted to crypto custody and trading services. Its shares soared 160% following news of the acquisition talks.

The acquisition aligns with Trump’s expanding influence in crypto markets amid rising Bitcoin prices, which have surged over 30% in the past month. This deal could reshape Bakkt’s direction, potentially integrating it into Trump’s media empire and refocusing on Bitcoin. Separately, President-elect Trump plans to meet with Coinbase CEO Brian Armstrong, signaling further engagement with the cryptocurrency sector.
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FINANCE
Market Rally Faces Rising Yields

The recent sharp rise in interest rates has sent ripples through financial markets, creating a stark contrast to the post-election rally in stocks following Donald Trump’s re-election. The S&P 500 surged over 4% to a record close on Nov. 14, fueled by optimism around Trump's pro-business agenda, including tax cuts and deregulation. However, the sudden jump in interest rates tells a different story.

The 10-year Treasury yield climbed from 3.74% on Oct. 1 to 4.47% by Nov. 18, marking one of its largest leaps in decades. This rise stems from two factors: an increased inflation premium and a significant uptick in real yields. While the inflation premium reflects concerns over prolonged Fed tightening to combat sticky inflation, the real yield—crucial for equity valuations—has surged from 1.56% to 2.15%. Higher real yields diminish the present value of future corporate earnings, making stocks less attractive.

Despite the equity market’s resilience, concerns loom over whether this represents a structural shift in interest rates. With a record-high S&P 500 price-to-earnings ratio of 29.4, stocks offer minimal returns compared to safer U.S. Treasury bonds, highlighting the growing risk-reward imbalance. If rates stay elevated due to ballooning deficits, stocks may face prolonged pressure, forcing investors to reassess their optimism.
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TECH
Tesla's Optimus Robot Impresses Kim

Kim Kardashian shared her excitement over Tesla’s latest innovations in a series of Instagram Stories, showcasing the Tesla Optimus AI robot and Cybercab. Calling the technology “insane,” she posted videos interacting with the Optimus robot, which Elon Musk has promoted as capable of household assistance and even babysitting. In the videos, Optimus performed tasks like rock-paper-scissors, waving, and pretending to Hula dance. Kardashian also highlighted a unique golden Optimus model, noting its exclusivity.

She then gave viewers a glimpse of Tesla’s autonomous Cybercab, marveling at its driverless interior, which lacks a steering wheel or pedals. “Wait, so there’s no driver?” she asked, expressing amazement. Tesla has been testing its robotaxi service with employees in San Francisco, though it’s still in development compared to competitors like Waymo.

While Kardashian hasn’t confirmed plans to purchase the robot or Cybercab, she has previously supported Musk, showcasing her custom Cybertruck. Musk has suggested the robotaxi will cost around $30,000, but its release date remains uncertain.
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Word of the day
Nonpareil

Use nonpareil to describe someone or something that is beyond compare, an absolute model of perfection of a particular thing. Jane Austen was a writer nonpareil, and James Bond a spy nonpareil.

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