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3 And Out - Week of May 16, 2022

Happy Monday to one and all and welcome back to 3 And Out. For those of you actively invested in the cryptocurrency space, my thoughts and prayers are with you. It’s been a tough week or so but the bear markets are where we build ourselves into something stronger, something more resilient. Same condolences go out to literally every other asset owner out there (except long vol or US dollar). But enough mourning, let’s dive in.

#1 - More Questions Swirl Around Stability of Top Stablecoin Tether ($USDT)
Tether, the world’s largest stablecoin by market cap (~$76b), continues to honor redemptions despite a brief scare where it lost parity with the US dollar and dipped to $0.97 amid the UST crisis. Astute readers will recall that Terra’s algorithmic stablecoin, UST, de-pegged from the dollar, causing the Luna Foundation Guard to sell many of their held assets (including a rumored 80,081 BTC) to try and preserve the peg. Tether operates very differently from UST and is a fiat collateralized stablecoin, meaning that Tether holds cash, commercial paper, and Treasuries in reserve, but questions are surfacing about the exact composition of those assets or if Tether owns any volatile assets, like Terra utilized. Tether’s CTO Paolo Ardoino proclaimed just last week that company has no plans to complete an audit anytime soon.
#2 - Americans Have Wagered Over $125 Billion Since Mid 2018
According to Legal Sports Report, sportsbooks in the US have an accumulated handle exceeding $125 billion since sports betting regulations were relaxed in the middle part of 2018. Currently, betting on sports is only legal in 30 states and Washington DC but those states have come online in a staggered manner since 2018. New Jersey, one of the first states to adopt new laws in 2018 and the largest sports betting state outside of Nevada, saw a handle of over $26b and revenue of $1.7b over the 4 year stretch. Most interestingly, 80% of all handle in NJ was via a mobile sportsbook app. Their neighbor New York, who legalized mobile sports betting in January 2022, has seen it’s monthly handle explode, recording no less than $1.5b for the first 4 months of the year. With legislative initiatives under way in several other large states such as California, Florida, and Ohio and other states still seeking to approve mobile wagering apps, such as North Carolina, Washington, and Wisconsin, there remains a long runway for the American sports betting industry.
#3 - Cathie Wood Buys $6 Million Of General Motors. End Of The Line For Tesla?
The polarizing CEO of Ark Invest Cathie Wood may be ringing the death knell for Tesla. Last week, Wood bought 158,187 shares of GM for Ark’s Autonomous Technology & Robotics ($ARKQ) fund, which represents around $6 million and less than 1% of the full ARKQ portfolio. GM and their chief domestic competitor Ford have both made serious investments and commitments to produce electric vehicles. GM specifically has earmarked $35 billion to develop EV’s and autonomous vehicle systems. While Cathie Wood’s ARK funds traditionally have focused on emerging growth names in the tech sector such as Tesla ($TSLA) or DraftKings ($DKNG), her new investment into an established value stock like GM may represent a major sentiment shift. With the heavyweight automakers barrelling full speed ahead towards manufacturing EV’s, is this the end of the road for Tesla? Let us know what you think on Twitter @spreadoption_
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