The Best One Yet - 🪑 “Crypto’s 3-legged stool” — Bitcoin’s rough week. Home Depot’s home-vesting. Google’s algo-money.

Episode Date: May 20, 2021

Bitcoin plummeted to $30K before recovering, and it can all be explained by a single piece of furniture. Home Depot just threw up insane House Hype numbers, but the story of the summer will be what we call “home-vesting.” And we noticed one interesting thing from Google’s first big conference in 2 years: An algorithm change that can change an economy.$BTC $ETH $DOGE $GOOG $HD $SHOPGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Got a SnackFact for the pod? We got a form for that too:https://docs.google.com/forms/d/e/1FAIpQLSe64VKtvMNDPGSncHDRF07W34cPMDO3N8Y4DpmNP_kweC58tw/viewformLearn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks Daily. It is Thursday, the new Friday, May 20th. It works every time. By way, Jack, is there caffeine in a macho latte? Of course. Yeah, I think so.

Actually, I don't know. I'm not an expert on this. I don't drink coffee. I don't know. I'm telling you what, Jack. I'm feeling something right now. This is going to be extra T-Boy. The best one, yeah.

For our first story, Snackers, Bitcoin plummeted to $30,000 yesterday, and then rebound it back to $40,000 in a matter of hours. Here's the thing, Snackers. Bitcoin's price, it sits on a three-legged stool. For our second story, Home Depot's 2020, it was house height. Yes, it was. 2021 so far has booming from home investment.

Jack, the numbers were so good that we had to measure twice, cut once. For our third and final story, Google is sick and tired of you going directly to Amazon.com and skipping Google search. So Google tweaked its algorithm. But Snackers, before we hit those three fantastic stories. It's a wonderful mix, Jack. If you're fully vaccinated like Nick and I are, you may feel comfortable showing your face in public a little bit more often. We're very happy about this, but guess what? We're not the happiest people in the world right now.

The happiest person isn't a person at all. No, it's not. Lipstick. Lipstick, the happiest thing in life right now. Lip liner is rebounding this week like it was a young Dennis Rodman. Yes, it is, Jack. Last year, it was buying the dip. This year, it's glossing the lip.

Lipstick prices fell 28% last year because it was mask smudge a paloza. We jumped in snack style. Turns out sales of lipstick fell by a third since masks are basically the Joker to Lipstick's Batman. The one lipstick style that actually sold decent last year in 2020, it was matte finish. You got to love the matte finish. It is resilient even when it's like rubbing up against an N95. Lip gloss on the other hand, that created a whole bunch of maskstaffes. I mean, Jack, lip gloss is going to turn.

on the inside of your mask into an Andy Warhol painting. Congratulations, lipstick. Welcome back to society. Let's hit our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. It's snacks about to hear ain't food. It's air candy.

They don't reflect the views of the robberhood family. It's all informational just so. We're not recommending any securities. It's not a research report or investment advice. Not an offer or sale about security. Right. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, Bitcoin plummeted to a low point of $30,000 yesterday before climbing back to $39,000.

It was a cryptocurrency epic flash crash. It was. And those numbers were all as of this recording. This year, though, Bitcoin been rocketing living its best life. From $9,000 one year ago. Not bad. To $64,000. at its high about a month ago. Yesterday it was a little painful, though.

A lot of laser eyes on Twitter got unplugged. A lot of laser eyes needed some new batteries after yesterday, check. It wasn't just Bitcoin either. No, it wasn't. Ethereum and Dogecoin were down as much as 43% and 54% at their lowest points of trading yesterday. F-O, what are you doing to me? It actually wasn't just Bitcoin, Ethereum, and Doge. If you look at the entire cryptocurrency market and the value of all those coins,

in one week, a trillion dollars of value was lost. I mean, the only way we can do this is like full sprinkling on context, Jack. Can we give some context to the $1 trillion? A trillion dollars is more than the entire value of all of Facebook. Jack, a trillion dollars more than two JP Morgan's. More than three Walmarts. Jack, more than four Disney's. And can you give me something that I can understand, please?

And of course, more than 60 lifts. That's how much value the crypto markets lost this week. But then, out of nowhere, Bitcoin, Dogecoin, Ethereum, recovered most of yesterday's brutal losses. Jack, an insane comeback after halftime. They were sweating. It was intense. But they're still losing, Nick, because the crypto market is still down 30% from one week ago. So not half of its value, down 30% of its value in one week. And stackers, it wasn't just Bitcoin and it wasn't just other coins. It was also companies related to those cryptocurrency. Square, a fintech company that loves Bitcoin, their stock fell because they trade and do business

in Bitcoin. Coinbase, it stock fell because their business is basically correlated with the price of Bitcoin. Crypto is famously volatile. It is. But this yesterday and the past week has been a historic fall. Although a little more context here, the crypto market has soared so far this year. So we got a two steps forward, one step back situation. Now, Snackers, we know what you're thinking. When you add all this up and the crypto markets plummeted yesterday, you're asking why. It's totally fair. We were asking why too. And with crypto, it's really hard sometimes to find out why. Fortunately, Jack and I jumped in Snack style. And really, there are two pieces of new news that caused the great crypto sell-off yesterday. The first was he who must not be named. It was Elon. It was

Elon tweets. Last week, he tweeted that Tesla would stop accepting Bitcoin as a payment for Tesla's cars. Yeah, and he said that for environmental reasons, he said. Over the weekend, Elon tweeted again, implying that Tesla has sold all those Bitcoins they'd accumulated since February. Although, apparently, he hadn't actually sold them based on his Diamond Hands emoji tweet today. All right. So Elon's big. China's bigger. Yes, it is. Three Chinese government regulators issued a blunt statement on Tuesday. Get this. China banned financial institutions from the crypto business. No using crypto, no trading crypto. If you have crypto right now in China, by the way, you can still hold it apparently. Which is kind of ironic because the decentralized part of crypto jack,

I feel like that's the most important part. Well, the Chinese central government. Highly central. Not a fan of a decentralized currency. They can't control. So Jack, what's the takeaway for our buddies over in the whole cryptocurrency market? Bitcoin failed the past week. because of the three-legged stool of crypto. All right, Snackers, here's how Jack and I see this. Cryptocurrencies, they sit upon a three-legged stool, the first leg of which is enthusiasm from the public.

The second leg that crypto prices stand on is corporate validation of cryptocurrencies. And the third leg of this crypto stool is government regulation. Or actually, lack of government regulation. That's what crypto loves. The less regulation, the more Bitcoin happy. Snackers, when any of these three legs crack, cryptocurrency prices tend to wobble. And when any of those legs break,

cryptocurrency prices tend to fall. This week, two of the legs of the crypto stool cracked really hard. First, Elon, he cracked the corporate validation leg of the crypto stool. And then China cracked the government lack of regulation leg. Now, this doesn't mean that the crypto stool is fully broken

and it doesn't mean that the crypto stool can't be fixed. But if you see the price of Bitcoin fall, take a look at the three legs of the stool and see which one cracked. For our second. story. By the way, there was definitely caffeine and macho, by the way, Jack. House type just evolved into a totally new thing. Home Depot is acting like a tech company?

It is. Even though it's in the business of like wood, lumber, metal. You're on a roll. And like PHP board, I think it's called. I don't know. That sounds dangerous. Okay, Home Depot stock. Honestly, Jack and I are looking at it looks less like a big box retailer, more like a live audio social dating app. What my co-host Nick is trying to say is, back in the day, the home depot we knew from the past. Two years ago. Sales grew like one to two percent each quarter. That's it back in 2019. That was it. But Jack, can you grace us with the sales growth that Home Depot experienced last quarter, which feels like it was more than one or two percent? Home Depot is Zucking Zuck's growth rate because quarterly sales grew by 31 percent for Home Depot to just last quarter, 37 billion in sales.

Jack, that is inappropriate for a company like this to do. It's a classic second puberty situation. This company is worth $340 billion. Let that sink in. $340 billion. They grew 31%. Jack, how many lifts is this? 20. This big box is a big box.

Home Depot, sit down. You're going to hurt yourself. Now, the star of the show was Lumber. And we're not talking Sammy Sosa versus Mark McGuire here. No, no, no. They mentioned lumber 19 times on the earnings call. That's more than DIY power tools or paint combined. Two by fours are in ridiculously high demand.

and Home Depot is describing the wood market as a storm-like environment. Literally, because people are buying up boards like there's a hurricane coming, but there's no hurricane coming. That's why lumber prices are up four times over the past year to an all-time high. Jack, have you ever heard of OBS? I haven't. I hadn't heard of OBS either. Sounds like a baseball statistic, though. It stands for oriented strand board, which like I grew up in concrete, so that's acceptable.

You like, weren't you climbing maple trees over the last 30 years? Yeah, so. Apparently it's the main type of board they're selling. They're selling these things for $1,400 a board in the futures market. The reason prices are so high for lumber is that you have a freaky, vicious cycle situation. All right, Snackers, this is wild. First, when the pandemic started, people wanted new homes. But we didn't have enough sawmills to produce the lumber to keep up with that demand.

So now we've got a shortage of sawmills, which led to a shortage of lumber, which led to a shortage of homes. And the shortage of homes caused the prices of the homes that are out there to spike. which led to more confident homeowners. Which is leading to even more investing in homes, which is leading, Jack, to what final thing? Even more demand for lumber. Yes. And an even shorter shortage of lumber. So, Jack, what's the takeaway for our buddies over at the Home Depot?

Home vesting is the new investing. Okay, Snackers, in 2020, homeowners, they bought up goodies to make your home comfortable, to make it cozy, to make it yours. We called it house hype, that phenomenon. You bought surround sound. You bought a Rumba. So there weren't crumbs on the kitchen floor. You bought a standing desk, you about patio gear.

Jack, I've got enough vote of Campbells in our home right now to like launch a cult. But this year, homeowners are investing in their homes to boost the value of their nest egg that their home is. Yeah, this snackers, the average number of Home Depot receipts over $1,000, which they call big ticket receipts, up 50% from last year. Mom is now comfortable with a contractor coming into the house to putting a new vanity. Not doing it just, you know, to make her house nicer. She's doing it because the house market is hot and this could boost the value of your home. entities in the bathroom go a long way they pay for themselves. 2020, that was house hype.

2021, it's home vesting. For our third and final story, in its biggest public event in two years, because they canceled the last one, Google just announced it is partnering up with Shopify. A single algorithm tweak. This is key. With enormous implications. Now, according to Google here, there are a billion shopping journeys that happen every single day across Google websites.

Journey is the key word. Shopping journey. Is their words actually? It is. But we'll illustrate it here. I like it. Some start their shopping journey with an OG search on Google.com. I want a robot vacuum.

I'm going to type in here, robot vacuum. And then you're going to see like six ads that Google collects money from. Some start their shopping journey on Google Maps, actually. Yeah. Open up Google Maps app. I'm going to type in mattresses around me and I'm probably going to get 40 ads for direct-to-consumer mattress companies after this. Others are mine at the robot.

business, watching an influencer play with a cat on YouTube. Mattress, mattress, mattress, boom, an ad for sustainably source. Swimware pops up. Next thing you know, you're sleut and for sandals. You can imagine how a billion shopping journeys would happen every day with all those opportunities. You can. You can't.

But starting now, sellers who use Shopify's e-commerce services, they're going to get special treatment to be included in those shopping journeys that happen on Google. Yeah, here's how Google put it. They're enabling Shopify's merchants to become discoverable to high-intent consumers across Google search, Google's shopping, Google's YouTube, Google Images, Google Maps, you name it, a Google product. That is valuable. This deal, we calculated it, is actually a $5 billion gift to Shopify. Jack, I love this because Snackers, you know how we calculated this? Shopify stock jumped $5 billion worth of value on this news. Three and a half percent

stock price jump multiplied by a $140 billion market cap. Now, this is a weird couple that got together here, So we know the question you're thinking, why is Google being so nice to Shopify, which is like a company that helps seller sell stuff online? It's actually because Google is sick and tired of losing online shopping traffic to Amazon and all the social media companies. Now, Snackers, picture yourself. You're increasingly beginning your shopping journeys not by tapping into a Google search browser. Amazon's search browser, the one you see on Amazon.com, it has become so powerful. It's its own soaring online ad business. now. Okay, so let's say didn't start your shopping journey with Amazon. Maybe you're starting it with social media. I'm going to quickly see what my friends are up to on social media. Quickly becomes, I'm going to see how much this couch cost that I just got an ad for on social

media. And Shopify, they got 1.7 million businesses selling burgers, bicycles, bidets, online with their own Shopify e-commerce tools. And now with just a couple clicks, any of those 1.7 million companies can opt in to get preferential treatment on Google search. I mean, who wouldn't do that? Why wouldn't you do that? Google. is doing this to make Google the world's door to all of e-commerce. And to stop losing your shopping journey to Jeff Bezos and Pinterest, yada, yada, yeah. So, Jack, what's the takeaway for our buddies over at Google? This deal highlights the power of an algo tweak.

Snackers, the essence of this news is that Google is tweaking its algorithm, its famous algorithm to treat Shopify sellers better than anyone else. And Google has tremendous power to influence what you see in your search results. and it's all based on their algorithm. Jack, I love our case study here. The economic power of this algorithm tweak was $5 billion of new value for Shopify's stock. The algorithm tweak implies that Shopify can make $3,000 more money

with each of its $1.7 million sellers by our math. Snackers, you live by the algo, you die by the algo. Shopify will now tell its customers that with Shopify, you'll thrive by the algo. Jack, can you whip up the takeaways for us for Thursday at the new Friday? Bitcoin sits on a three-legged stool. Public enthusiasm, corporate validation and lack of government regulation. So Snackers, when you see the price of Bitcoin fall, check which leg broke.

Home Depot saw soaring sales in 2020, thanks to pandemic house hush. 2021, it's looking like home vesting. Shopify is now going to tell potential customers they'll get top spots in Google search results. And they will. You live by the algo. you die by the alga. Now, time for our snack fact of the day. This one's sent in by Yuna from Pebble Beach, California.

Also, a brown bear loves East Side Pockets. In 2008, Yishoyun became the first South Korean person to head into space. Okay, but that wasn't her only accomplishment, as Yuna points out. Yon happened to bring some kimchi up with her to outer space, and therefore it was the first kimchi ever in outer space. Now, this classic Korean spicy pickled cabbage dish was successful. successfully and enthusiastically consumed in orbit. One small step for Korea, one giant leap for fermented vegetables.

Snackers, you look fantastic today, except for Athlvia, Theoretorette. You're really hurting me today. Don't let Nick's downer-ness down your day. We would love if you could share snacks daily. That's how we grow. Just ask your buddies, H-Y-H-Y-S day. Have you had your snacks daily? If you know, you know.

Nick and I'll see you tomorrow. But before we go, happy birthday to Bob, so to Kuyah from Uzbekistan, currently in Brooklyn. Thanks County. Love it. Happy birthday to Olivia Foster in Whitby, Ontario. And Enzo Deprenda from Get This Jack, Spa, Belgium. Sounds lovely. And happy birthday, Macy Slaughter in Milwaukee, Wisconsin.

And Dr. Dane Anderson from Ridgefield, Washington. And happy birthday to George Dwyer in Derryan, Connecticut. George, happy birthday. Next coin. It's George Coyne. And Amelia Villa Real in Napa, California. And Jerome Yapitana in Tintin Falls. And Ross Goldberg is both a birthday boy.

Rare. and a master of business administration. And congratulations to Page and Trevor University in lovely Bluffdale, Utah. And Luke Stockmeier graduated in New York, Maine, just outside of Boston. And Zach Moose, Jack, got the internship down in Louisville. And Sophia Keys finally got her dream job in San Diego, California.

And Kenny Winn, congrats on the new job down in Austin. Anybody else celebrating anything today? Anything. Make it a T-Boy. Celebrate the wins. This is Jack. I own stock of Amazon. And Nick, whoo, Nick own stock up Shopify, Square, and he's got a whole bunch of Vethel of the Ethereum.

The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, or any of its subsidiaries or affiliates. The podcast is for informational purposes only and is not intended to serve as a recommendation to buy or sell any security and is not an offer or sale of a security. The podcast is also not a research report and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA, SIPC.