The SportsFolio Journal - February 11, 2021
Tom Brady is the GOAT and it is not even close.
We were wondering whether this will be a pass-the-torch type game. TB to Mahomes. From the king to the prince.
Nope. Mahomes has shown a lot of heart, but at the end of the day, Tom Brady is as good as he has ever been. The guy has won more NFL championships than any NFL franchise. Just think about that for a second. Honestly, his competition now is not anybody in the NFL. It is the GOATs in other sports.
Now football is kind of over (there is some college action coming up in the Spring), the focus will largely shift to the NBA. Speaking of basketball, have you heard of Overtime? Sports + social media was bound to happen. They are also planning to launch a semi-professional basketball league. Whether they will be serious competition to the NCAA remains to be seen, but with the NCAA amateurism being at stake here, maybe the writing is on the wall. Maybe we are on our way to a wealth transfer from others to content generators/athletes that increasingly become their own brand, and that may not be a bad thing. The athletes that play with the heart of an amateur are likely going to be good brands anyway.
Has Bitcoin won? Matt Levine over at Money Stuff thinks so.
Yeah, look, this is the end, Bitcoin won. I write sometimes about a tension between, on the one hand, a sort of original idealistic conception of Bitcoin as an alternative to the mainstream financial system, decentralized and trustless and censorship-resistant, and, on the other hand, the fact that Bitcoin’s market value is increasingly a matter of its embrace by boring mainstream corporate treasurers and asset managers, and their ability to fit it into their normal trusted mainstream financial institutions.
That tension is still there; if your love of Bitcoin is connected to your distrust of big banks, you will not want to keep Bitcoins at BoNY Mellon. But it is perhaps irrelevant in practice: The asset managers and corporate treasurers don’t care about trustlessness and decentralization and disintermediating the financial system. They buy Bitcoin because they like it as a store of value, a financial asset like any other; they look at their menu of possible investments to try to optimize for risk-adjusted return, and Bitcoin is now firmly on the menu and, sometimes, part of the optimal choice set. And so they go to their custody bank and say “I have 30 bonds and 40 stocks and 10 commodity futures and 20 Bitcoins, take care of it for me.” And the custody bank, now, does.
He is referring to BNY Mellon starting to offer bitcoin services. Mastercard is also jumping on the bandwagon. Before that, it was Tesla buying $1.5 billion worth of bitcoin. All of that in one week! Bitcoin is now sitting pretty at over $47,000. Not bad for a coin that you can neither use as a currency nor get any cash flows out of it. Also, one could ask, if Bitcoin is kosher, then why exactly is Arthur Hayes in trouble?
Meanwhile, XRP is back to where it was before the SEC complaint. Funny thing is that Ripple responded on January 29 and the price pretty much doubled after that. Are people really liking what they saw in the response (pdf)? We are not sure, we are still digesting it. Or, are people looking at what is happening with Bitcoin and thinking this won’t end too bad for XRP?
In other news: Robinhood responded to the Massachusetts complaint. Alex Kearns’s family has sued Robinhood (PDF). Teachers are losing their life savings to Robinhood’s confetti. Robinhood margin loans are 14 times more likely to default. The employment numbers are out, and at this rate, it will take us 10 years to achieve full employment.
Sports & Money
Here we go again.
Sure, let’s push out sports betting as a game of skill, why not? In fact, if that’s the case, there is really no point in legislation anyway. DFS is supposedly a “game of skill” and both DraftKings and FanDuel are operating in the state, despite a 2016 Attorney General opinion stating that participation in daily fantasy sports leagues is illegal gambling under Texas law. All of this is so irresponsible. Let us say this again: DFS is not a game. Sports betting is not a game, either.
None of this will ultimately matter, as the Governor is clear that sports betting will not see the light of day in Texas; nor should it. Sports gambling is not a solution to the state’s economic problems and that doesn’t even include any of the vice costs that the state will ultimately bear.
Meanwhile, the sports betting bill in Arizona has stalled.
The NHL took some equity in PointsBet, though the ownership stake is not that meaningful. Approximately $500,000 for a $2.5 billion market cap company? That’s 0.02%. Shoutout to the NHL: You don’t really need to do this. We have the better alternative and we will prove it.