HODLers HODL, and revisiting themes
Of BTC, Walmart, Nvidia and Chrome
Bitcoin’s got the latest laugh, but why do they never sell?
The Almighty Consumer is just fine. Target is bad at life
Nvidia headwinds? What headwinds?
Chrome earning it. Regulators should try it some time.
👉👉👉Reminder to sign up for the Weekly Recap only, if daily emails is too much. Find me on twitter, for more fun. It’s Friday, so we’re going to keep it light. Just one new chart, and then some codas on recent posts.
HODLers HODL
Bitcoin $BTC continues to be the little ZIRP-co that could:
Bitcoin is scraping $100K, a ~5x return from the 2023 nadir.
So, not only has BTC regained its pandemic high, but its rocketed right past it. Crypto-bros are geniuses, again, I suppose.
Why has this happened?
Who can really say, but presumably some combination of froth, crypto-friendly admin, institutional flows, avoiding currency controls (in LatAm, Asia), and gold-buggery hedges against permaflation (and probably other things).
Very satisfying explanation, I know.
Or maybe it has something to do with this:
Whales (i.e. $10M+ wallets) comprise a majority of wallets (with very little evidence of selling).
In other words, Bitcoin ownership is still very concentrated amongst a few very long holders.
On the one hand you can say “HODLers are putting their money where their mouth is—no pump n’ dump here.”
But on the other hand you can say “is it really worth $100K when no one is really selling it (and query how easy it might be to manipulate pricing with ownership so concentrated)?”
My understanding is that it’s still hard to know exactly who is trading what (given how hard it can be know who is “behind” any given wallet), so the risk of manipulation is pretty high. That might be wrong though.
Anyways, for now, credit where credit is due.1
Revisiting Walmart, Nvidia and Chrome
Now on to the codas.
The Almighty Consumer is fine. Target is just bad at life.
The day after Walmart said “everything is fine,” Target announced “it’s Armageddon out there.”
Target cut its full-year profit outlook Wednesday after a disappointing quarter, sending shares down more than 20%. Executives said shoppers are spending less on nonessential items like clothes and home products, and the company held onto more inventory ahead of the US port strike, leading to unexpected costs.
After a series of missteps in managing inventory and product assortment, pressure is mounting for Chief Executive Officer Brian Cornell to rejuvenate sales in an increasingly competitive environment. Target’s results stood out against its rivals that are seeing growth, another warning sign that the retailer’s rebound strategy isn’t going according to plan.
So, does that mean the Almighty Consumer is not ok?
Nah, Random Walk doesn’t think so. Target TGT 0.00%↑ is just relatively bad at what it does, and it’s trying to blame macro conditions for its malaise.
The street seems to agree, for what it’s worth.
Target has been underperforming Walmart since the spring.
Again, Target is not wrong that consumers are trading down, seeking value, and all that.
Middle income shoppers, especially, seem to be trading down the most:
While all income groups have been trading down, middle income households have substituted for cheaper brands more so than others.2
But while Walmart, Costco, and others have been able to capitalize on that search for value, Target just hasn’t.
Nvidia’s headwinds? What headwinds?
If Nvidia is facing headwinds, it’s not showing it yet.
Random Walk surfaced some data that suggests demand for GPUs was softening. To be fair, the data are mostly leading indicators, so even if they’re legit, it will take some time before showing up in results.
But, for now, Nvidia made it pretty clear that there’s no softening (yet, at least).
Nvidia did technically “disappoint” in that it beat revenue estimates by a mere $400M
Last year, Nvidia beat estimates by $2B, so a $400M beat is chump change.
Here’s another cut of actuals v. expectations:
Sure, a 5% beat is pretty weak, when you look at it that way.
Find someone to disappoint you the way that Nvidia disappoints analysts. I can assure you, that you will not be disappointed.
I mean, you really can’t argue too much with this:
Parabolic growth for a mature company that was already doing eleven-figures is just unheard of.
Eventually, the CUDA-train will have to slow down because it must (right?). Plus, the backlog in the interconnection queue is real, and there were anecdotes of project delays as a result, so there are fundamental challenges to bringing new data centers online.
But, whatever the case may be, as far as any slowdown, Jensen says “not today.”
Bridge Trolls breaking things
We can now add crypto to the list of things regulators have tried to break “fOr tHe CoNsUMeR sAFeTy” that didn’t need breaking.
Returning for a moment to the most recent attempt at wanton destruction, I found this chart illustrative.
DOJ wants to expropriate Chrome . . . because Chrome lapped the competition despite entering the game late against well-established, and well-capitalized alternatives:
Chrome came outta nowhere to pass Firefox and IE, and by 2019, achieved two-thirds of the browser market share (and no more since then).
The field includes IE, plus Microsoft’s newer product, Edge, as well as Safari, from the little upstart company known as Apple.
Clearly, the notion that Chrome achieved its present position for reasons other than earning it by “being the best browser that everyone prefers to use of their own volition” is just stupid. It’s worse than stupid because it’s being used as a pretext by people who have nothing to do with Chrome’s success to confiscate it for their own purposes.
The irony, of course, is that “earning it” is plainly a foreign concept to the FTC (and DOJ).
Unlike Google, those organizations are, in fact, actual cartels that horizontally integrate with every company nationwide to foist their “consumer protection” services on us, whether we citizen consumers like it or not. There is no “unsubscribe” from Lina’s tyranny.
Perhaps if the regulators tried earning it once in a while they might actually do something useful.
Previously, on Random Walk
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Note that BofA is relying on its own “premium” classification scale to measure the quality-mix of shoppers. It’s an interesting method, but take it with a grain of salt.
Anecdotally, I've heard a number of people talk about bailing on Target for Walmart in part as a reaction to "The Pinch" of disposable income not keeping up with the price level of stuff they buy there, and with a perceived upgrade of the average Walmart shopping experience, I think somewhat to it shedding some of its own lower end marginal customers while getting a bunch of "tahr-jay" refugees at the high end. Something similar seems to be happening to to the middle tier of grocery stores with regards to the spending-class of the average customer.
Many BTC wallets are probably "lost," ie, the passwords have been lost. Eg, if Satoshi has passed away, then odds are that a million BTC will be HODLed until quantum computers come along.