EM overtaking the US, SEC Approved Bitcoin Futures, AI Chatbot Race
Baidu vs OpenAI, Bitcoin Futures, EM to overtake US
By Terrence Hooi
Chief Investment Strategist
This Substack Post does not take into account nor does it provide any tax, legal or
investment advice or opinion regarding the specific investment objectives or
financial situation of any person.
This week, the Securities and Exchange Commission (SEC) has granted approval for the first-ever leveraged Bitcoin Futures ETF. This development comes as Bitcoin has experienced an 83% increase in value over the past six months. Now the question arises: will Bitcoin continue to rise?
1.) SEC Approved Bitcoin Futures
Volatility Shares is set to launch the first US-based ETF offering leveraged long exposure to bitcoin futures contracts.
The 2x Bitcoin Strategy ETF (BITX) aims to correspond to two times the excess return of the S&P CME Bitcoin Futures Daily Roll Index for a single day.
The ETF provides convenient and liquid access to leveraged bitcoin exposure through traditional brokerage accounts, eliminating the need for a crypto exchange account.
The SEC approved bitcoin futures ETFs in October 2021, but had concerns about leveraged products.
Valkyrie previously withdrew its application for a leveraged bitcoin futures ETF after the SEC's request.
Volatility Shares' launch suggests a potential shift in the SEC's stance on leveraged bitcoin futures products.
Singular’s Take: The SEC has not allowed spot bitcoin ETFs to come to market, but the approval of leveraged bitcoin futures ETFs may indicate a more favorable stance towards bitcoin-related products. Bloomberg intelligence analysts suggest that the SEC's willingness to approve leveraged bitcoin futures ETFs could signal a general "lightening up" on bitcoin products.
2.) EM to Overtake the US by 2025
According to a recent report by Goldman Sachs Research, emerging markets (EMs) are poised to outpace the United States and other developed markets in terms of stock market capitalization in the coming years.
The share of global equity market held by EMs will rise significantly, starting from approximately 27% at present and reaching 35% by 2030. The forecast suggests a remarkable increase to 47% by 2050, and an even more substantial surge to 55% by 2075. India is expected to experience the largest surge in global market capitalization share. Currently standing at just under 3% in 2022, India's market cap share is projected to rise to 8% by 2050 and further to 12% by 2075. This growth is attributed to a promising demographic outlook and rapid GDP per capita expansion.
In the case of China, its market capitalization share is anticipated to increase from 10% to 15% by 2050. However, due to a slowdown in potential growth driven by demographics, China's market share is predicted to decline to approximately 13% by 2075.
The report forecasts that by the end of this decade, EMs will surpass the United States in market capitalization. The United States' current share of global equity market capitalization, which stands at 42% in 2022, is projected to decline to 35% by 2030, 27% by 2050, and eventually settle at 22% by 2075.
3.) Baidu’s AI Outperforms OpenAI’s GPT-4
Since the launch of OpenAI's GPT-4 LLM model, various AI and research organizations have been striving to match or surpass its performance. While some have achieved comparable results to GPT-3.5, GPT-4 has remained the benchmark to beat.
This week, Baidu unveiled their latest LLM model called ERNIE 3.5. According to Baidu, ERNIE 3.5 not only surpasses the comprehensive ability scores of GPT-3.5 but also outperforms GPT-4 in several Chinese language capabilities.
With the enhanced capabilities of ERNIE 3.5, the ERNIE Bot now offers improved functionalities in creative writing, Q&A, reasoning, and code generation. Following in the footsteps of OpenAI, Baidu has also introduced the concept of plugins for ERNIE. Similar to ChatGPT plugins, ERNIE's plugins allow users to expand the capabilities of the bot.
One of the built-in plugins called "Baidu Search" equips the ERNIE Bot with real-time and accurate information generation. Additionally, the ChatFile plugin enables long text summarization and Q&A. Baidu plans to introduce more high-quality plugins for ERNIE Bot in the future.
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See you again next week!