In this episode of Macro Markets, Cointelegraph analyst Marcel Pechman discusses the real estate market and its current challenges. He points out that stagnant mortgage demand is attributed to rising interest rates, with an average 30-year fixed-rate mortgage interest rate of 7.27%. This has led to a significant drop in refinancing and home purchase applications. However, Pechman speculates that house prices might rise if inflation continues to grow, as real estate has historically been a reliable store of value.
Pechman also delves into Instacart’s initial public offering (IPO), which valued the company at $10 billion, much lower than its peak valuation of $39 billion. This reflects the challenges faced by venture capitalists in the current economic climate. Pechman suggests that investors should consider alternative metrics and look for a reliable store of value. He highlights cryptocurrencies like Bitcoin as potential options, noting that Bitcoin can serve as a transparent reserve system for banks and nations, issuing Bitcoin-backed digital assets without requiring a large user base.
Key Points:
– Stagnant mortgage demand in the real estate market due to rising interest rates.
– Speculation that house prices might rise if inflation continues to grow.
– Real estate, especially urban residential, has historically been a reliable store of value.
– Instacart’s IPO valuation significantly lower than its peak valuation, reflecting challenges faced by venture capitalists.
– Shift in investor metrics towards a reliable store of value.
– Bitcoin can serve as a transparent reserve system for banks and nations.
– Cryptocurrencies like Bitcoin can fill the role of a reliable store of value regardless of everyday user adoption.
