Plus, Movie Theater Chain AMC Makes a Bizarre, Yet Savvy Investment
Welcome to your Sunday digest…my weekly breakdown of the things we’re thinking about and talking about in the Global Intelligence world.
First up this week, PayPal believes crypto payments are the future…
While traders and the mainstream financial media tend to focus solely on the short-term price movements of leading cryptocurrencies like bitcoin, that’s missing the point of crypto and its underlying digital ledger technology—blockchain, according to PayPal CEO Dan Schulman.
In a recent interview, he said that the really important aspect of crypto is how it will change the way we pay for goods and services.
Already central banks around the world, including in China and the European Union, are racing to develop digital currencies based on blockchain technology. These central bank digital currencies, or CBDCs, are far closer to being rolled out than most people realize…though the U.S. is falling behind in this regard.
Now, companies such as Amazon are thought to be studying ways to integrate crypto payment systems into their platforms.
Shulman believes we’re fast approaching a day when traditional and crypto payment systems merge…which in time will lead to the end of conventional models, like cash, with crypto taking over.
“The intersection between CBDC, stablecoins, digital wallets, and enhanced utility of payments through cryptocurrencies is not just fascinating but I think will redefine a lot of the financial world going forward,” he said.
This is precisely the point I’ve been making for years.
Crypto wallets and payments are the future. Soon enough, we’ll all be making and receiving payments for everyday purchases through crypto wallets on our smartphones.
Some of these transactions will likely take place through government-developed CBDC wallets, and some of it will take place through third-party wallets on leading blockchain networks like Ethereum and Solana, and maybe even on PayPal.
This sounds fantastical, but then so did online shopping when I introduced the idea to my grandmother back in the ’90s.
The time to learn and invest in crypto technology is now…before it takes over.
Sticking with the digital future for a moment…
I’ve been writing to you for a while about metaverse avatars. I’m convinced these are going to be the new iPhone…the must-have technology for the next generation of the internet.
There’s a lot to unpack there, so let’s take a step back.
The metaverse is a new vision for how the internet will operate. Instead of looking at it in 2-D on laptops, tablets, and smartphones, we’re going to experience it all around us through virtual reality and augmented reality technology.
I get that not everyone can visualize this future. So, let me paint you a picture…
Imagine you want to buy a new shirt. Instead of hopping in your car and driving several miles to the nearest store, you’ll simply pop on a set of sleek, slim 3-D glasses linked to your computer or smartphone. Immediately you’re in a 3-D world that looks almost as real as the actual world.
Next you select a destination and you’re walking through a digital mall. You walk into a store and in a few clicks of a button you’re trying on different shirts on your avatar (a digital re-creation of your real body with your exact dimensions). You find a shirt you like, you order it and pay for it (in crypto), and it’s delivered to your home, likely the same day. That’s the future.
Everyone is going to want a metaverse avatar. You’ll need one in fact, since a lot of business will happen in online metaverse offices.
These avatars will be status symbols. Having a high-quality avatar will be like owning the latest iPhone or driving a new Mercedes. And because of that, people are going to pay big bucks not only for their avatars, but for digital clothes to dress them in.
As I’ve written previously, brands like Nike, Adidas, Gap, Abercrombie & Fitch, Gucci, and others have already taken steps to develop digital clothing and accessories.
Now, we have a new addition to the metaverse catwalk…digital makeup.
Fashion brand L’Oreal has filed a number of patents for virtual versions of its cosmetics, such as skincare and haircare products. These virtual versions could be used to populate its online stores, or even to decorate avatars.
Digital makeup for your digital self…like it or not, this is where the world is heading.
We end this week with an odd move by AMC…
AMC, as I’m sure you’re aware, is a cinema chain. They earn their cash by selling tickets to The Batman, flogging ridiculously overpriced popcorn, and now…mining gold.
That’s not a typo. Earlier this week, AMC bought a 22% stake in Hycroft, a mining company that owns large gold deposits in Nevada.
As you might imagine, the move caught analysts off guard. Hycroft was on the verge of bankruptcy. The company only came to AMC’s attention because of a surge in interest from individual investors scouring the penny stocks market for companies that could benefit from Russia’s invasion of Ukraine. Hycroft seemed to fit the bill, since gold always soars in times of war and fear.
AMC has invested $27.9 million in the company, enabling Hycroft to operate for years to come.
There are a few interesting takeaways from this frankly weird development.
First, gold is clearly on the up and will remain so. We’re in unstable geopolitical terrain and that’s unlikely to change.
Second, the move comes after AMC itself was saved last year from bankruptcy by individual investors, when it became part of the “meme stock” trend. That trend saw individual investors—operating collectively in large numbers through social media sites like Reddit—invest in companies that had been “shorted” by Wall Street. (“Short selling” is an investment strategy that speculates on the decline of a stock.)
So, individual investors not only saved AMC, they helped guide it to an interesting, if left-field, diversification strategy.
The meme stock trend may have faded, but clearly online speculators are still shaping the investment landscape more than Wall Street wants to admit…
That brings us to the end of this week’s digest. Many thanks for being a subscriber. And if you have any feedback or questions, reach out through the contact form on the Global Intelligence website.
Enjoy the rest of your Sunday.