The Brief by Introduction.com - Fintech Friday: Buy the Venue. Not the Coin.

Hey guys, happy Friday. Hope you're well.

Four central banks tightened in eight days and the market said thank you. Stocks bounced, bond volatility fell, and bitcoin ran back to $80,000 the morning after the Fed hiked. That is not what a rate hike is supposed to do, and the reason it did is the whole story this week.

Here's our take on what's happening out there, and what we actually think about it. Grab a coffee, let's get into it.

The Fed raised rates a quarter point to 3.75 to 4.00%, the first hike since 2023, and the 10-year fell instead of rising. We read that as the bond market rewarding the Fed for taking inflation seriously, so the long end is being defended now, and mortgages near 7% are the price of that defense.

🇺🇸 At home

🌍 Abroad

The biggest check of the week was a $22 billion bank loan to buy chips, and the biggest venture round was $3.9 billion to build power for them. Capital is not waiting for rates to come down, it is paying up to own the hardware, and we think that is the clearest signal in the whole tape.

🇺🇸 Domestic

🌍 International

Oil fell 5% this week to $99 while the cost of moving it went vertical, with supertankers earning more than $1 million a day and US diesel at an all-time high of $6.40. The Fed hiked into that and freight did not flinch, which tells you the bottleneck is ships and refineries, not money.

🌐 Prices

⚡ Power for AI, the week's grab for electrons.

🌍 The East, who controls the barrels and the minerals.

Saudi Arabia says half the East-West pipeline is back within days. Power of Siberia 2 is still deadlocked. Watch the Sept 24 Xi and Trump summit.

A supertanker just made $1 million in one day. That is the real inflation story this week.

On Monday a ship carrying oil from the Persian Gulf to China earned $1.035 million for a single day at sea. In an ordinary year that ship makes about $40,000 a day. Rates are up like this on every route and every size of ship, and one owner just locked in $100,000 a day for three years because he thinks it lasts.

Here is why it matters to you. The price of oil actually fell this week. The price of moving oil exploded. You pay for both at the pump, which is why diesel hit $6.40 a gallon, the highest ever. Diesel is what moves food, packages and everything in a truck, so the trucking companies are already warning about their profits and Amazon added a fuel fee.

Into all of this, the Fed raised interest rates on Wednesday, its first hike since 2023. Normally a rate hike is meant to cool prices by making borrowing more expensive. But a rate hike cannot build a ship or reopen a shipping lane. Strip out energy and inflation is already down to 2.4%. The Fed was not really fighting diesel.

It was fighting for trust. Government bond yields had hit 5% for the first time since 2007, which means investors wanted more and more to lend to Washington. The hike was a signal that the Fed is serious about inflation, and investors took it: yields fell and stocks rose.

So the Fed won its argument this week. The tanker market is still having a different one.

On Thursday the SEC gave crypto platforms permission to trade real stocks, like Apple or Nvidia, as tokens on a blockchain.

Until now, only a licensed stock exchange could run that kind of market, and every firm making trades on it needed a dealer license. This new rule waives both for five years, as long as the venue is approved and its code can be audited. Two days earlier the Senate had killed the bill that was supposed to give crypto its rulebook. Bitcoin fell to $75,000 on the vote. It was back above $80,000 by Friday morning, with Coinbase and Robinhood up with it.

🪙 Majors

🐸 Memes

Tuesday. The Senate killed the crypto bill by one vote. Bitcoin fell 5% to $75,000, and Coinbase, Circle and Robinhood all dropped with it.

Thursday. The SEC let crypto platforms trade tokenized stocks for the next five years, no exchange license required. Bitcoin ran back to $80,000. Coinbase jumped 6% Thursday and another 12% Friday, and the whole group ran with it.

How we would price it in. The bill dying was bad for the coins for about 48 hours. The SEC ruling is good for the exchanges for five years. It hands Coinbase and Robinhood a whole new product, stocks on a blockchain, that they get to run and nobody else does yet. So the trade was never bitcoin, which ended the week where it started. It was the exchanges, which got paid for a rule change that is not going away.

Buy the venue, not the coin.

After 50 years in the seat, the Oracle of Omaha handed the chair to his son Howard. He is 96 and stays on the board.

→ Read The Intelligent Investor at 19 and spent 70 years proving it right
→ Took control of Berkshire, a failing textile mill, in 1965
→ Compounded it at roughly 20% a year for six decades
→ Still lives in the Omaha house he bought in 1958
→ Pledged 99% of his fortune to charity and has given away more than $68 billion
→ Presidential Medal of Freedom, 2011

He never hid how he did it. Every year he wrote a letter anyone could read, in words anyone could follow: buy a good business at a fair price and keep it. Then he did exactly that, in public, for five decades, and made more people rich by teaching than by trading.

We got to watch the best ever do it live. Thank you, Warren.

Disagree? Reply and tell us where you'd put it.

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