🎙️ Record Territory

Happy Veterans Day, everyone! If you have served: Thank you for your service.

The U.S. bond market was closed for Veterans Day, but other markets were open. One market that’s always open is bitcoin, which surged to another new record. Let’s dive in.

— Matthew & Shawn

Here’s today’s rundown:

Today, we'll discuss the biggest stories in markets:

• Bitcoin’s surge to $87,000

• Trendy shoe brands’ secret sauce

This, and more, in just 5 minutes to read.

Chart of the Day

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In The News

📈 Bitcoin Sets Another Record, Hits $87,000

Talk about a tear. Bitcoin now sets new records almost daily, climbing above $87,000 for the first time. Credit President-elect Donald Trump’s pro-bitcoin stance and the cryptocurrency’s halving cycle, the event every four years when the reward for mining bitcoin transactions is cut in half, thus decreasing the amount of newly-minted bitcoin in circulation as the digital currency slowly makes its away to a supply cap of 21 million tokens.

Bitcoin has surged about 30% since last week's election and doubled so far this year. 

“Bitcoin continues to defy expectations by setting new highs,” said a research analyst. “The market is moving like it finally realizes we’re going to be in an undeniable bull market.”

Shares of related companies also rose sharply. MicroStrategy and Coinbase each soared over 20% on Monday. Miners MARA Holdings and Riot Platforms also jumped. Some traders are already eyeing $100,000 or more for bitcoin — by the end of 2024. 

The surge comes after Trump has vowed to lead the U.S. as the center of the entire industry, including establishing a strategic bitcoin stockpile and appointing regulators who know digital assets. 

More bullish? The ETFs, namely BlackRock Inc.’s $35 billion iShares Bitcoin Trust, posted a record daily net inflow of almost $1.4 billion on Thursday alone.

• “We believe a significant portion of the institutional market de-risked in the lead-up to the election and is now re-entering post Trump’s win, creating material buying pressure — this is likely to be ongoing for some time yet,” said the founder of crypto-focused investment firm DACM.
  

• “Trump has promised supportive regulation, and the sweep of the House and the Senate makes the passage of crypto bills much more likely,” wrote Noelle Acheson, author of the Crypto Is Macro Now newsletter.

Why it matters:

Bitcoin has become increasingly prevalent in financial markets and conversations across traditional finance. The launch of bitcoin ETFs early this year helped pave the way for more adoption. 

The latest rise comes the same day Michael Saylor's MicroStrategy, the largest corporate holder of bitcoin, has bought another 27,200 “BTC” for $2 billion.

MicroStrategy's bitcoin-acquisition strategy is novel but quite simple. The company issues shares, then acquires bitcoin with the proceeds. As the price of bitcoin soars, so has the share price of MicroStrategy, which is up about 400% this year and over 2,000% in the past five years.

Among bulls, the question becomes: How soon will we see $100,000 BTC?

Read more

More Headlines

📈 Analysts adjust Palantir stock ratings as valuation soars

🤯 The shadow ‘financial crisis’ that has cost the world $2 trillion

💭 Wise words on market uncertainty from elite investors

🚗 Tesla shares pop another 9% as postelection rally continues

📦 Amazon developing driver eyeglasses to shave seconds off deliveries

👟 Shoe Brands’ Secret to Success? Going Slow

Bitcoin isn’t the only thing benefiting from scarcity — modern trendy shoe brands are taking cues from luxury marketing.

An unlikely group of brands has emerged as masters of the luxury playbook — without the luxury price tags. Hoka sneakers, On shoes, Ugg boots, and Birkenstock sandals share little in common aesthetically, yet they're all having success through a carefully orchestrated strategy of controlled distribution and measured growth.

Big money: The results speak for themselves. Deckers Outdoor, the parent company of Hoka and Ugg, is thriving. Ugg posted a 16% sales increase last fiscal year, with projections pointing to an additional 7.4% growth this year. Hoka shoes are wildly popular, with a compound annual growth rate of 50% over the past four years. On’s performance running shoes are expanding even faster, and Birkenstock forecasts double-digit percentage revenue increases for the coming years.

Lessons from mistakes: Ugg boots became popular in the 2000s before falling from grace. But in 2016, it made a bold move: withdrawing from ~200 retail locations and concentrating distribution through major partners like Amazon and Macy's. Combined with carefully managed limited-edition releases like the Ultra Mini Platforms, that strategy helped rebuild the brand's desirability.

• Meanwhile, Hoka has taken a "slow, deliberate pace" in expanding its retail presence, carefully curating its stores to create a more luxury, personalized shopping experience. And On has withdrawn from box stores like DSW and partnered with specialty running stores like Fleet Feet and upscale retailers like Nordstrom.
  

• Birkenstock has taken the most aggressive stance on scarcity. 

Healthy margins: All three companies - Deckers Outdoor, On, and Birkenstock - maintain gross margins above 55%. On's stellar 60% gross margin puts it closer to luxury giant LVMH than traditional athletic wear competitor Nike.

Why it matters:

It’s no longer just the world of Nike and Adidas. Walk a block or two in a city like New York, and you’ll almost certainly spot Hoka sneakers or Ugg boots. The brands have taken off in the last few years, with few signs of waning.

Public companies sometimes struggle to balance quarterly growth demands and long-term brand value. European luxury conglomerates, while publicly traded, benefit from family control that allows them to focus on long-term brand prestige over short-term revenue growth and day-to-day Wall Street expectations.

The playbook is working for trendy shoe companies. Success has required adopting the patient perspective of luxury-brand families - understanding that controlled growth and carefully managed distribution are key to sustaining long-term value.

Read more about Hoka’s rise

Quick Poll

On Friday, we asked: If you have a financial advisor, how did you find that person?

— Many investors with a financial advisor said they find them via referral. “New him through business and organizations we both were part of,” one wrote.

— Another said, “I was referred by a CFO I fully trusted. But I also know finance and how to evaluate investments which allows me to have discussions about investments rather than letting someone else make my decisions.”

See you next time!

That's it for today on We Study Markets!

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