Is The Commercial Real Estate CRASH Here?! 📉

The banking crisis seems to have abated - at least for the time being - so it’s time to consider where the next threat to financial stability is going to come from. Well, commercial real estate is looking like a strong candidate.

Like so much else, commercial real estate went on a tear during the pandemic, as investors were able to take advantage of low interest rates to refinance their debts. But, as we know all too well, those days of essentially free money didn’t last. Rates have been increasing at breakneck speed over the last twelve months and that caught many investors in the sector napping.

Then came the banking crisis, which has made banks much less willing to extend loan agreements or make fresh loans available. Add to this the fact that many commercial real estate loans originate from small and medium-sized banks - which are feeling the pinch especially hard - and the outlook darkens still further.

In today’s video, we examine the commercial real estate sector and assess just how much trouble it could be in. We dive into the risks facing it and look at what the upshot of all this could be.

You can watch that video here

📈 Crypto Market Forecast 📈

It’s been a wild week in crypto, and the industry has another turbulent seven days ahead. For starters, Americans will have to file their taxes by Tuesday, 18th April. This is important to point out, because it’s possible that we could see some last-minute asset selling as Americans realise that they owe more tax than they expected. Case and point, data by Civic Science suggests that Americans expected to owe more in taxes and get less tax refunds for 2022. Extra tax payments and less tax refunds could therefore result in some selling of assets on the periphery.

On the same day, Binance.US will also be delisting Tron’s TRX and Abracadabra Money’s SPELL token, which is used to govern the decentralised stablecoin Magic Internet Money (MIM). This is significant, because it suggests that stablecoins are facing extreme regulatory scrutiny. For context, Tron launched the USDD stablecoin last May. USDD uses a ‘mint and burn’ mechanism that’s similar to Terra’s UST. This is probably raising red flags among regulators, and the scrutiny of SPELL could mean that the stablecoin crackdown is only getting worse.

Speaking of Binance, the international version of the exchange will allow holders of Binance Staked ETH (BETH) to start claiming the underlying ETH on Wednesday, 19th April. This could potentially add to the sell pressure on ETH, which has so far been next to non-existent. This is surprising, considering that hundreds of millions worth of staked ETH and rewards have been withdrawn, with around 1.5 million ETH pending. Obviously, this ETH isn’t being sold, but then why are Ethereum validators withdrawing their ETH stakes? Why not just keep staking?

In any case, another thing to watch out for on Wednesday is crypto regulations in the European Union, specifically the debate about the Markets in Crypto Assets or MiCA bill. The debate is somewhat surprising considering that the regulation is supposedly a done deal. The thing is that MiCA was written and passed prior to the collapse of FTX and all the stuff we’ve been dealing with since. Not surprisingly, many EU politicians and regulators have called for an overhaul of MiCA, with the European Central Bank recently saying that more rules are required.

This ties into another regulatory wildcard, and that’s the SEC’s ongoing case against Ripple over sales of XRP by the company and its executives. Last week, the SEC filed a letter with the court which showed that the judge presiding over the case had ruled against the defendant in a different case involving the fair notice defence. For reference, Ripple and its executives are arguing that they should not be fined because they weren’t given fair notice their XRP sales constituted sales of unregistered securities. This filing could be bad news for Ripple’s defence.

On that note, uncertainty still remains over ETH’s regulatory status. This is because SEC Chairman Gary Gensler reportedly believes that all proof of stake cryptos are securities. In fact, he believes that all cryptos besides BTC are securities. Given that validators are able to unstake their ETH, could this change ETH’s status in the eyes of the SEC? While anything is possible with Gensler’s gang, I think it’s quite unlikely and that’s mainly because the SEC doesn’t have the money! NGMI.

🤔 Is AI a Threat? 🤔

While AI tools like ChatGPT have had a significant impact on innovation recently, there have been growing concerns about the potential dangers AI poses.

Specifically, a recent petition published by the Future of Life Institute (FOLI) called for a 6-month “pause” on further development of “human-competitive intelligence” models that are more powerful than GPT-4, due to the “profound risks to society and humanity” posed by them. Interestingly, the letter’s signatories include prominent tech leaders such as Elon Musk, Steve Wozniak and the CEO of Stability AI.

But what are these “profound risks” exactly?

Well, to start, the petition states that AI development has been off the rails due to AI labs racing to create and deploy powerful digital minds that not even they themselves can reliably understand, predict, or control.

The authors of the petition state that this will eventually lead to AI bots causing the downfall of civilization, due to the large-scale automation of the many jobs. That’s something I spoke about in my video last week.

However, critics have spoken out against the FOLI petition, calling the letter itself an attempt by OpenAI and its allies to consolidate their dominance by building an extended innovation lead over their competitors. They state that the proposed pause would consolidate control of AI development among the wealthy and powerful and eventually irreparably harm AI development as a whole.

This view seems to only be further validated by Twitter CEO Elon Musk’s alleged recent purchase of nearly 10,000 graphics processing units (GPUs) for developing Twitter’s AI infrastructure, which needless to say appears to be a direct contradiction to his support of arresting AI development.

However, it isn’t just corporations or individuals that have been campaigning against the use of AI. Countries have also been taking a proactive step in placing restrictions or controls on the use of AI products in their territories. Italy recently banned ChatGPT and opened an investigation after its national data agency raised concerns about possible privacy violations by the software.

Following Italy’s move, other countries such as China, Canada, Germany, France and Sweden all announced that they were placing restrictions or opening investigations into possible privacy law violations by ChatGPT .

I can’t say these fears are completely unfounded. Especially since there has been a long-standing debate over the use of copyrighted information in training AI models. The most notable example is the Universal Music Group’s recent request to block AI-generated songs on streaming platforms after many of these songs were almost indistinguishable from the real versions.

In summary, I can’t say for sure how much of this fear surrounding AI is warranted, but I do know that such pushback is common every time we encounter a disruptive technology. But with consistent effort and innovation, there might be enough progress to spark an unstoppable wave of innovation.

That’s how we got here after all, from a single cryptocurrency called Bitcoin to a vast ecosystem of programmable money systems, decentralised governance and permissionless markets.

📊 Personal Portfolio 📊

BTC 36.16% | ETH 33.04% | USDC 16.06% | USDT 6.43% | ATOM 3.55% | USD 3.24% | DOT 1.48%

🔥 Deal of The Week 🔥

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🔮 Video Pipeline 🔮

• US Government vs DEFI: Problems brewing?
• A16z State of Crypto Report: What you need to know!
• Countries Behind The Next Bull Run: What to expect?
• Top Crypto Twitter Accounts: Who to follow?

🏆 What's New At CoinBureau.com This Week? 🏆

✅ Top 5 AI Crypto Projects: Artificial Intelligence on the Blockchain!

That’s all for this one. Thanks as always for all your support 🙏

Team Coin Bureau

Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.