🚦 SEC Greenlights Spot Ethereum ETF Listings

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What’s on the Menu 🍴

Today is a huge win for crypto…

And a massive loss for anyone who, for whatever strange reason, wanted a Central Bank Digital Currency!

Let’s get into it:

• House Rejects Fed's Digital Currency ₿

• SEC Greenlights Spot Ethereum ETF Listings 🚦

• Is The Profitable “Becky” Portfolio In Trouble? 👩

• Nvidia Does It Again 😮

Today’s newsletter is a 5 minute read.

House Rejects Fed's Digital Currency ₿

The U.S. House of Representatives just passed a bill to ban the Federal Reserve from issuing a Central Bank Digital Currency (CBDC).

The bill's future in the Senate is unclear.

CBDC is seen as a major threat to freedom. It could allow the government to track every dollar you spend and even "turn off" your money.

On Wednesday, the House saw rare bipartisanship. Seventy-one Democrats joined 208 Republicans to pass the Financial Innovation and Technology for the 21st Century Act (FIT21).

This crypto market structure bill boosts the Commodity Futures Trading Commission's power over digital assets and clarifies the Securities and Exchange Commission's role in the sector.

Industry leaders cheered the House's move. Kristin Smith, head of the Blockchain Association, called it a "watershed moment and badge of Congressional validation for the crypto industry in the United States." Nicole Valentine, FinTech director at the Milken Institute, praised it as a "welcome step."

But the Senate may not be on board.

Both FIT21 and the anti-CBDC bill lack counterparts there, suggesting they might stall.

The House has made a bold statement, impacting the financial and crypto worlds.

As these bills head to the Senate, all eyes will be watching.

Will the Senate act, or will these efforts fade? Stay tuned.

SEC Greenlights Spot Ethereum ETF Listings 🚦

Yesterday was a HUGE milestone for crypto…

The SEC just gave the green light to the 19b-4 forms for a spot Ether ETF.

This is a big deal for issuers like BlackRock, Fidelity, Grayscale, VanEck, Franklin Templeton, Ark/21Shares, and Invesco/Galaxy.

Haters were skeptical, but we’ve been long Ethereum anticipating these approvals.

So, what does this mean?

It suggests the SEC is getting cozy with the idea of a spot Ether ETF, but don’t pop the champagne just yet.

The final S-1 forms still need a thumbs-up before these ETFs can hit the market. We think the wait could be a few weeks, but it might drag on longer.

Earlier this week, the industry was rocked when regulators asked issuers to tweak their 19b-4 filings right before the SEC’s deadline for VanEck’s filing.

The odds of approval seemed slim because the SEC had been giving everyone the cold shoulder.

But now, the buzz is real.

Will the SEC follow through and approve the final S-1 forms? We think so, but will keep our ears to the ground for you.

Is The Profitable “Becky”
Portfolio In Trouble? 👩

There are many themes to invest in, but, none more funny (to me) than the “Becky” theme.

There is an unofficial stock index called the Becky index that tracks popular companies that women “can’t live without”.

They call them “Basic” women, or Beckys (aka: no real uniqueness and very mainstream types of chicks).

Some of the stocks in the Becky index have been absolute outsized performers vs. the S&P 500 over the decade. Names like Lululemon, a popular athleisure wear company, and Ulta Beauty, the big box store focused on hair and beauty products.

But, many of these names have had recent stock performance leaving more to be desired.

Lululemon (LULU), Starbucks (SBUX), Ulta (ULTA) and Target (TGT) are some main names in overall decline.

However, more time shows a different story. This is why we like to “zoom out” and look at different time frames to see how a stock is really faring.

The 10-year performance still shows names like LULU and ULTA way outperforming even with recent declines.

SBUX and TGT have really been more recently lagging the S&P. SBUX has had more consistent outperformance while TGT towed the line here and there of under and outperforming the S&P 500.

Not too shabby for some basic girl stocks.

So it brings to the forefront a couple of points:

1. While these companies are seeing short-term headwinds with their consumers (for various reasons), historically they’ve proven to be decent companies to own.

2. Consumer discretionary stocks have always gone through cycles… that will never change. The real question is have these names lost their luster and edge in the market?

First of all, LULU and ULTA are still comping positively with positive revenue growth. Growth has decelerated yes, but, not disappeared. This is more of a testament of the consumer slowing down a bit and businesses maturing, with a touch of some competition.

TGT and SBUX are seeing negative revenue growth…but, nothing we haven’t seen before.

SBUX saw a period of decelerating growth in 2017 (even hitting 0%) and TGT has always been a low grower (despite its ability to put out share returns).

Not only that, these companies are going through a wild transition of business booming in 2020-2021 with consumers spending a lot, to the hangover of that experience.

Really, my spider senses are up with these selloffs in the beloved Becky stocks.

Trading or investing around these cycles can be profitable.

I don’t think these companies are dying anytime soon. They have too much on the line and made too much progress for management to squander.

This is typically how I have found success in consumer discretionary stocks in the first place: buying them when everyone hates them or they show more value in relation to the future potential.

So if you’re building a stock shopping list this year, the basic girl stocks may be worth a deeper look.

Nvidia Does It Again 😮

Despite stratospheric expectations, Nvidia once again delivered a phenomenal quarter of growth in Q1.

The stock responded with a 9% gain on Thursday, one of the only major gainers on a down day for the overall market:

Here’s a quick recap of NVDA’s stellar results:

✅ Revenue: $26 Billion (vs $24B expected

✅ Operating Profit: $17B (vs $16B expected)

✅ Adjusted EPS: $6.12 (vs $5.42 expected)

✅ Q2 Revenue guidance: $28 Billion (vs $27B expected)

✅ Q2 Adjusted EPS guidance: $6.20 (vs $6 expected)

NVDA also announced a 10-for-1 stock split which will go into effect in early June, making it easier for smaller shareholders to purchase stock.

CEO Jensen Huang remained upbeat on the earnings call, calling out strong demand for both current and next generation GPUs, particularly in the datacenter market.

NVDA CFO Collette Kress also stated that “we expect demand may exceed supply well into next year”…

NVDA is currently the third largest public company in the world, now sitting just 11% behind Apple.

The AI boom shows no signs of slowing down just yet!

Food For Thought 🧠

"Every once in a while, a new technology, an old problem,
and a big idea turn into an innovation."
- Dean Kamen

DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.