Before I begin…good news for people nervous about the stock market panic today….CNBC is airing a ‘Markets In Turmoil‘ tonight. It never has failed at producing an investable bottom.
If you are confused or angry…you might be too heavily weighted in stocks. The warning signs have been epic. Read Ben Carlson’s excellent piece titled ‘markets have always been rigged, broken and manipulated‘.
I have always said to just assume the above when investing your hard earned money.
Onwards…
Before my fintech rant begins, do read this excellent fintech piece from John Street Capital in December titled ‘Fintech: The 2020’s‘.
Ok…begin rant…
I think we are in a fintech bubble. I am not sure if we topped for now or a big acceleration is at hand.
I’m all for bubbles. They happen. I’m guilty for blowing on this one. I am even working on a fintech SPAC which has to be the top.
I have been trying to ride this boom now bubble for 13 years when Youtube inspired me to start Wallstrip and Twitter inspired me to start Stocktwits.
On a macro level of this bubble, rates are low and printing money seems to be accelerating. I see no end to this so that is a plus for the bubble inflating further.
There is a multiplier of ‘fresh’ fintech money being unleashed on a world that will do its job pushing valuations in fintech higher (at least that’s what I am seeing at the seed stage).
What is this multiplier you ask? The founders and early employees of the companies below will have serious cash that they will use to buy homes and Tesla’s no doubt. Bored with stocks and zero interest rates, they will triple down on fintech (and other startups) because that is their domain experience. These teams see the problems that their own startups could not fill. The fresh money comes from:
Intuit buying Credit Karma
Paypal buying Honey
Schwab buying TD Ameritrade
Morgan Stanley buying Etrade
Visa buying Plaid
These are just the recent multi billion acquisitions. Revolut just raised $500 million more for their neo bank in Europe now coming to USA. Lending Club just bought Radius Bank for $170 million. My friend and fellow venture capitalist Semil unpacks the Intuit/Credit Karma deal and chimes in on fintech as well in this short but sweet post.
Goldman and JP Morgan are still thinking they can build things themselves. Good luck. They will likely panic and chase prices too.
If the chase is on, there will likely be a cushion for fintech startups that cannot get traction.
Not to be outdone…you can basically hedge the fintech bubble in what might be another bubble…Bitcoin is at $10,000 (the trust and scarcity are the features that matter right now) and Gold is ripping higher. Gold miners are cool again. Smacks forehead!
Just a quick rant on what I am feeling and seeing…
Go yell at me on Stocktwits or Twitter is you agree or disagree.