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Redwood Trust Stock – The Mortgage REIT Innovating the Industry

Redwood Trust stock is still recovering from the pandemic. Despite being up over 80% in the past year, RWT stock still isn’t back to pre-pandemic levels.
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Redwood Trust Inc. (NYSE: RWT) is busy transforming its business to survive in a challenging industry. With that in mind, Redwood Trust stock is still recovering from the effects of the pandemic. Despite being up over 80% in the past year, RWT stock still isn’t quite to pre-pandemic levels.

Mortgage backed securities (MBS) are a hot topic lately, with home prices skyrocketing. In fact, the median home price has increased 17% since last year at this time.

With that being said, as the housing market is quickly expanding, it’s pressuring the Federal Reserve to start scaling back asset purchases. In particular, the fed is discussing slowly reducing the purchasing of MBS. The reason they began purchasing these in the first place is to support the housing industry and economy.

Now that signs show the economy is recovering (Ex. Lower unemployment & housing market), the fed is discussing slowing buying. But in a recent Fed statement, the agency said it’s waiting until specific targets are met with inflation and employment.

When the Fed decides to begin tapering, it can have major effects on Redwood Trust stock. How does the company plan to overcome these challenges?

Let’s take a closer look…

What Does Redwood Trust Inc. Do?

To better understand what Redwood Trust Inc. does, it’s best to understand what a Mortgage Backed Security is fully. An MBS is a type of investment that’s backed by a real estate loan. Many times, these investments are grouped into “pools” and then sold to investors.

In many instances, the MBS is backed by a government agency like Fannie Mae. But, those who aren’t can go through someone like Redwood Trust Inc.

On top of this, it provides mortgages to those whose loans are too expensive to be government-backed. Loans that are too big to be covered are known as “jumbo mortgages.” These types of loans are becoming more common as housing prices continue rising.

According to the Radian Home Price Index, home prices have grown 13.2% since the start of the pandemic. The appreciation can help the REIT Company’s market.

Redwood Trust Inc. Business Segments

With that in mind, Redwood Trust serves three different groups of customers. The company is currently managing $12 billion in assets through the following segments.

  1. Redwood Residential – Helps secure jumbo loans for individual consumers.
  2. Business Purpose Lending – Provides loans to real estate investors.
  3. Investment Portfolio – Invests in 3rd party MBS loans.

Despite a massive blow to the business when the pandemic struck, it’s recovering nicely through strategic investments.

Redwood Residential

Redwood Residential is another promising area that could help skyrocket Redwood Trust stock numbers.

It’s no secret by now that home prices are going up. But, the price hike is pushing more people to use an agency like Redwood Trust to secure a jumbo loan.

Redwood Residential helps home buyers obtain large loans. Additionally, the company then sells the loan to investors. The process helps support the mortgage industry by providing funding. Giving private loans helps bridge the gap between bank deposits and the growing number of loan requests.

In the second quarter, the company secured $3.9 billion in loans. Also, Redwood sold $1.8 billion in loan sales and another $1.5 billion in pooled investments.

Business Purpose Lending

Redwood Trust broke headlines in 2019 by buying CoreVest, a business finance provider. The move gave a huge boost to the company’s business purpose lending unit with over $900 million in assets. Not only that, in April, they expanded the division by investing in Churchill Finance, a real estate credit company.

Business lending generated $312 million in single-family rental loans in the second quarter, growing 23% from the previous quarter. Furthermore, it took in $215 million in short-term loans, representing a 61% increase.

Investment Portfolio

The company’s investment portfolio is its primary revenue source. By investing in 3rd party loans, Redwood can generate a steady profit. This should play a factor in Redwood Trust stock price.

During the second quarter, investments generated $31 million in net interest income.

Launching RWT Horizons

Another business unit is launching that will help support Redwood Trusts core business. Introducing RWT Horizons. The team invests in early-stage tech startups and launched in the first quarter.

RWT Horizons will focus on technology investments such as fintech, proptech, and digital infrastructure. It will also help leverage the tech to improve the company’s other divisions.

In Q1, the firm made its first investments in Rent Butter and Rentroom. Rent Butter is developing software, a tenant screening tool, while Rentroom offers property management solutions. Not only does the stake have the potential to deliver returns, but it can also help the company innovate and grow.

Redwood Trust Stock Is Now Leveraging Blockchain Technology

In addition to the investments above, the company purchased a stake in Liquid Mortgage. The acquisition is significant because the startup assists the mortgage process through digitization on the Blockchain.

More importantly, the company just announced its first residential MBS using Blockchain technology. The news can be huge for the industry and Redwood Trust Inc. as the Blockchain tech market expects to reach $394 billion by 2028. Fred Matera had this to say “Today was an important step in building the infrastructure to someday have fully digitized and tokenized mortgages.”

The technology gives Redwood a big competitive advantage as the tech can be more secure and easier to scale.

Redwood Trust Stock Analysis – Will It All Come Together?

All in all, Redwood Trust stock is up 60% in 2021 and racing towards pre-pandemic highs. Currently sitting at $12.89 per share, RWT stock is still down over 20% from the beginning of 2020.

Will the mortgage REIT be able to overcome the FED slowing asset purchasing? The company is betting on the future of technology to help it overcome future challenges it may experience. Through RWT Horizons, Redwood is using the latest tech to expand its market.

Not to mention Redwood Trust stock is sitting at $13.34, below its average price target of $14.75. With a P/E ratio of 4.91, RWT stock price doesn’t seem too overvalued at this point. Also, the company just raised its dividend 17% to .21 per share, a good deal for investors. The increase now brings RWTs dividend yield to 6.30%.

Lastly, Credit Suisse maintained their outperform outlook for Redwood Trust stock earlier this month, suggesting more upside potential is possible.

For more info on Redwood Trust stock, make sure to sign up for our Trade of the Day e-letter. This free mailing will give you daily insights into the latest profitable investment opportunities. Sign up today!

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Spread & Containment

How China combined authoritarianism with capitalism to create a new communism

What does communism 2.0 mean for democracy?

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After the 1989 fall of communism in the Soviet bloc, five self-declared communist states remain today: China, Cuba, Laos, North Korea and Vietnam. Belarus and Venezuela can also be added to the mix as they fulfil the criteria of a communist state – even though they do not officially invoke the ideology. So, at present, the number stands at seven. The question is, now that capitalism is the engine of China’s economy, what is communism today? And if the number of communist states is poised to grow in the near future, as some predict, what does this prospect mean for democracy?

My interest in communism goes beyond my work as a historian – it’s personal. I was born and raised in communist Poland in the 1970s and 1980s. It was a grey country where people seemed to have lost all hope. All essentials, including shoes and coffee, were rationed. But rationing cards did not mean you would get what you wanted, or even needed. Queuing for hours (sometimes even days) to buy anything that had just been delivered to a shop was a regular occurrence.

I have no doubt that my upbringing shaped my life and inspired my career. My research has examined modern central and eastern Europe, nationalism and the politics of language – particularly in the region’s totalitarian and authoritarian regimes during the past two centuries.

During my youth in the 1980s, bartering became more common, while scarce goods could only be bought with US dollars. You could exchange a summer dress two sizes too large for a T-bone steak (kotlet), or a record player that you did not need for a large can of baby formula. Only vinegar seemed to be in constant supply on the near-empty shop shelves – perhaps accounting for the sour faces and almost permanent lack of smiles. Western scholars came up with an apt term to describe this existence. They called it the “economy of scarcity” – the impact of central planning on production and the population.

And it wasn’t just a lack of food. Freedom was scarce, too. Poland, like all Soviet bloc countries, was kept under a “double lock” – meaning it was even difficult to travel to another socialist country, be it neighbouring Czechoslovakia or East Germany. You needed to apply for a particular kind of passport to travel to the “people’s democracies” (that is, Soviet bloc countries) in Europe. And after coming back home from your travels, this precious document had to be returned to a local militia headquarters (the police was then known by this militarised sobriquet).

If you wanted to visit a European capitalist country, like West Germany, you needed a another kind of passport. But only a single member of any family would be allowed to go to the “rotten capitalist west” (as it was often referred to). So the rest of your family remained as the state’s hostages to ensure you wouldn’t dare to defect. I never once saw the passport that permitted travel to all the countries of the world, which allowed the lucky few to travel to the US or Australia.


This story is part of Conversation Insights
The Insights team generates long-form journalism and is working with academics from different backgrounds who have been engaged in projects to tackle societal and scientific challenges.


To me, and many others, my home country felt like one big prison. Stringent censorship of publications, films and television aimed to convince us that life in Poland and the Soviet bloc was much better than in New York or Paris. But few believed the propaganda. People clandestinely listened to Radio Free Europe and Voice of America (despite the state attempting to jam them). And during the 1980s, it became easier to buy banned books in the form of samizdat (uncensored, underground publications).

Among the youth, the dream was to escape this prison and enjoy a “normal life” in a “normal country”. In a place with no rationing cards and well-stocked supermarkets, where working a single job you would be able to afford a decent standard of living, an apartment and summer holidays in the Canaries. The slang Polish name for this Spanish archipelago, “Kanary”, became colloquial shorthand for the unattainable.

Pie in the sky, our parents warned us. Their advice was to be quiet, to do what we were told by teachers or overseers – and to never say what we thought. After all, refusing to toe the Communist Party’s line, not praising Poland’s socialism – let alone opposing the system – might cost you a coveted place at a university, the loss of an apartment, or land you in prison. In the 1950s, at the height of Stalinism, people were even executed for such ideological misdemeanours.

For people who did succeed to escape the regime, the journey was fraught with complications.

But, unexpectedly, the cold war between the western democracies and the communist Soviet bloc came to an end in 1989, followed, two years later, by the collapse of the Soviet Union itself. This communist superpower simply and peacefully (at least in Europe) vanished into thin air, causing communism as a political and economic system to disappear from much of the world.

We were free. The last General Secretary of the Soviet Union Mikhail Gorbachev was the good fairy, who made our heartfelt dream come true. The Soviet leader decided that starving his own people in order to keep up with the west in the arms race was no way forward. The subsequent systemic transition, in the span of a decade and a half, enabled former Soviet bloc states, from Poland and Hungary to Romania and Bulgaria, to accede to NATO and the European Union.

With my newfound freedom, I continued my education in South Africa and the Czech Republic. I researched in Italy, the US and Japan, before finding university positions in Ireland and Scotland.

But in the case of the 15 countries that emerged from the defunct Soviet Union, only the Baltic republics of Estonia, Latvia and Lithuania became truly western and democratic. Most, Russia included, became autocracies – even if they stuck to the pretence of parliamentary elections.

Georgia, Moldova and especially Ukraine are tantalisingly close to becoming genuine democracies with the prospect of EU and NATO membership. Yet, Turkmenistan is almost as oppressive as North Korea, while Azerbaijan and Uzbekistan are seen as textbook examples of repressive and kleptokratic dictatorships.

But at present, not a single post-communist or post-Soviet state declares itself to be communist.

China leads the autocracies

With the economic and political demise of Soviet-style communism, most of the communist regimes supported by the Soviet Union across the world, like Ethiopia, Afghanistan and South Yemen also collapsed. Communist Cuba is a lone exception to this trend. The Caribbean island has been a permanent thorn in the side of the US since 1961.

Present-day communism, then, is led by China – the world’s second largest economy. Beijing has been proudly communist since 1949 and is now taking on the US, which still leads – though falteringly – the globe’s shrinking camp of democracies. Since 2010, an increasing number of states have parted with democracy.

Over the past decade, democracy has been quickly reversed in post-genocide Rwanda. The same also happened in Ethiopia after the civil war in Tigray (2020-present day), while the Arab Spring’s democratic gains have been squashed across the Middle East. As in Putin’s Russia, electoral autocracies were installed in Bulgaria (2009), Hungary (2010), Serbia (2014), Turkey (2015), Poland (2016) and Slovenia (2020).

On July 1, 2019, China’s Communist Party celebrated its 100th birthday. From www.alamy.com

China’s population of 1.4 billion means that a fifth of all humankind lives under its communist regime. The other three self-declared communist states – Laos, North Korea and Vietnam – all border China. A new communist – and Sinic (Chinese influenced) – bloc, indeed.

So, after the two decades of decline in the wake of the 1989 collapse of the Soviet bloc, is the turbocharged Chinese-style communism 2.0 – which embraces capitalism – going to take over?

The rise and fall of democracy

The looser post-cold war definition of communism marries capitalism with socialism, as understood in the former Soviet Union. The overarching principle of socialism (seen as communism in the west) says: “From each according to his ability, to each according to his contribution.” In practice, this unorthodox mix of Soviet-style socialism and capitalism means an authoritarian, or even totalitarian, regime under a single party’s full and (these days) AI-enhanced control. This control extends over the now capitalist-style economy, too. Through this mono-party, the invariably male leader single-handedly rules.

Often a cult of personality is developed for him and the deal is sweetened with a modicum of a welfare state. In most cases these states advertise themselves as being communist. Others, like Belarus and Venezuela may not actually call it “communism” and a different name may be given to this ideology.

For example Bolivarianism in Venezuela, national unity in Belarus or Juche in North Korea. The mono-party political system makes the Communist Party into the state and its leader into the de-facto dictator. Unchecked collectivism, or the ruling dictator’s self-serving and populist rhetoric of prioritising masses (referred to as “nation or people”) over individuals, “justifies” his rule and the system. In places like Belarus and China, this has led to dissenters being repressed and concentration camps being built to remove them from “healthy society”.

Like the pre-1989 communist states, all these countries’ ruling regimes are anti-western in their official rhetoric, and often in their actions too. This anti-western aggression was another important defining feature of the communist states of the 20th century.

But will this number rise or fall in the 21st century? During the two decades following the fall of communism in Europe, democracy as the doctrine of human and political rights steadily spread across the world. Dictators felt pressured to keep up at least the appearance of working electoral democracy in their countries. Amnesty International and Freedom House successfully shamed autocrats into mending their notorious ways and freeing political prisoners.

But after 2010, this trend was incrementally reversed. Symbolically, in this year the Chinese writer and pro-democracy dissident Liu Xiaobo was awarded the Nobel Peace Prize. Beijing felt offended by the west and took steps to suppress Liu, his family and friends. The authorities denied Liu cancer treatment and he died prematurely seven years later.

Liu’s ashes were scattered in the sea to prevent the establishment of a grave for a person many saw as a democratic hero and martyr. That would have been a focal point for China’s democrats, who might have gone on pilgrimages to pay respect to Liu’s unwavering loyalty to liberty and democracy.

Then, in 2020, the pandemic created an ideal opportunity for Beijing to dismantle democracy in Hong Kong, and a place that was once a beacon of political and economic freedom fell. Autocrats of all stripes took note.

‘To get rich is glorious’

But isn’t the whole idea of capitalism and profit anathema to the central tenets of communism? And if so, how did these two opposites attract? In the wake of then Chinese leader Deng Xiaoping’s 1978 reforms, a great discovery of applied politics was made in China: that you can have capitalism without democracy. Spotting a gap in the market of ideas, Deng decreed that “to get rich is glorious”, meaning that capitalism was ideologically neutral and could serve the needs of a communist regime.

The current marriage of capitalism and communism is a lesson for democrats not to trust in their wishful thinking. Instead, the often touted hypothesis about capitalism’s democratising effects must be put to the test. It is clear that capitalism does not make authoritarian or totalitarian Belarus, China, Laos or Vietnam any less authoritarian or more pro-democratic or pro-western. Cuba, North Korea and Venezuela ditched capitalism once before, when they became communist, in 1948 and 1959 and 1999 respectively, and they are reluctant to re-embrace it. But China’s enthusiasm for undemocratic capitalism since 2004 – known as the Beijing consensus in the west – may compel them to follow suit soon.

China’s economic success, if it lasts for several generations, may lead to the fortification of nascent communism 2.0, with capitalism as an integral part of this ideology. Communist-capitalism is not an oxymoron any more, as long as the ruling communist party keeps entrepreneurs subservient to its ideology and governance.

So what are the specific characteristics of the new communist 2.0 state? Perhaps, the self-declaration of being a communist state is the most obvious and that this features in the constitution. Even if some states give it a different name.

Civic and human rights are seriously limited and often denounced as a “western ploy”. For instance, no individual right to vote exists in China, while the state actually owns citizens’ bodies to do with them as it pleases.

A similar level of abuse is observed in North Korea and Vietnam. And growing repression has also been observed in Belarus and Cuba.

Recently, the west woke up to the dangers that its liberal and democratic values may face and the fact that capitalism alone cannot guarantee freedom and human rights. The fear that the age of communist China’s imperialism has already arrived motivated Australia, the UK and the US, for example, to form a new military pact. Imperfectly – and probably to Beijing’s delight – AUKUS agreement excludes the EU.

Technological totalitarianism

In China, the traditional features of totalitarianism have become irretrievably combined with the system’s appetite for hi-tech conditioning and surveillance. For example, the total control of Xinjiang’s Muslims is made possible through the region’s mass database of the population’s DNA and irises.

Technology and AI are communism 2.0’s largely bloodless methods for extending total control over the population, making sure that every individual toes the party’s line. This compliance is also enabled by the emerging military surveillance industrial complex, which is going to be at the core of successful communist-capitalism.

More control means more job openings in this complex, directly translating into economic growth, that in turn will go back into financing that control – totalitarianism’s perfect feedback loop, with no way out. And so repression becomes recognised as the engine of the economy; a guarantee of prosperity for most (though not all).

The seismic shift from Soviet-style communism 1.0, based on heavy industry, to China’s AI-supported communism 2.0 can be observed to different degrees across those seven communist states. North Korea remains an outlier and a squarely communism 1.0 state. To this day, Pyongyang refuses to follow the communism 2.0 path, despite Beijing’s quiet nudges in that direction (although there are signs that could be changing). Cuba and Venezuela, meanwhile, are also closer to communism 1.0, still making non-pragmatic choices informed by idealism and ideology. At the other end of the spectrum, Belarus, Laos and Vietnam are using whatever works economically (as long as the ruling party controls production and profits). They are China’s conscientious pupils, bent on implementing communism 2.0.

Democratic alternatives

Unless the world’s democracies come up with attractive and effective solutions to socioeconomic ills such as unemployment, falling living standards and income, and inaccessible medical care, then I am afraid that communism 2.0 is going to win hands down. In this scenario, the number of communist states is bound to grow and individual and political freedoms will diminish.

China’s Belt and Road Initiative (BRI) is exactly the type of ambitious project that the world’s democracies acutely lack at this moment in time. The plan is to link and build a coordinated network of railway, road and maritime corridors to span all of Africa, Asia and Europe for the seamless export of products from China and the easy import of raw materials to this communist powerhouse.

Not only does the BRI already facilitate China’s exploitation of Eurasia and Africa, but it also functions as the main conveyor belt for spreading communism 2.0 globally.

Adoptions of the Chinese model’s signature mix of welfare state policies with growing authoritarian tendencies and a single party’s aspiration to seize all power have been observed in present-day Europe since 2015, be it in Bulgaria, Hungary, Poland or Serbia. Unsurprisingly, these countries’ pro-authoritarian leaders are enamoured with Chinese economic and political success. They hope to establish privileged links and collaboration with the communist superpower and they may not be the last western states to fall under its spell.

To curry favour with Beijing, Europe’s aspiring autocracies are busy dismantling democracy and putting curbs on political rights and freedoms at home. Since 2015, Poland has repeatedly been risking tens of billions of Euros in developmental aid from the EU by rejecting the basic principle of EU legal primacy. Facing growing censure, in 2017, incredulously, the Polish prime minister said that it did not matter, because in such a case China would offer Poland more money than Brussels.

I fear that, after my childhood in communist Poland, I may have to live out my old age under a communist 2.0 regime of renewed oppression. However colourful and hi-tech its façade may be, the enforcement of the ruling party’s line in this possible future will be swifter and more totalitarian than in the Soviet bloc’s pre-cyberspace past.

Vast databases of citizens’ DNA and irises will make personal identifications impossible to fake, while ubiquitous online, mobile and CCTV monitoring will liquidate privacy and any possibility of organised dissent.

In the state’s gaze, each person will stand naked with no choice but to do the autocrat’s bidding or be vanished and die, forgotten by all, out of sight in a “black jail” or in an officially non-existent concentration camp.

Even the memory of such an ideological miscreant will be erased from people’s minds, thanks to the rise of the state-controlled “sovereign internet”. As George Orwell predicted in 1984: “Who controls the past, controls the future.”


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Tomasz Kamusella does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Commodities

Culture converges with blockchain as luxury fashion brands launch NFT collections

Luxury fashion brands are launching NFT collections, but will the concept resonate with the fashion industry at large?
It’s no surprise that nonfungible tokens (NFT) have been dominating the crypto market this year. The booming digital

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Luxury fashion brands are launching NFT collections, but will the concept resonate with the fashion industry at large?

It’s no surprise that nonfungible tokens (NFT) have been dominating the crypto market this year. The booming digital asset class generated over $2.5 billion in sales within the first six months of 2021, demonstrating unheard-of financial gains for artists, brands and content creators across the globe. 

The rise of metaverses has also impacted the adoption of NFTs, as the world is moving closer toward visions of a future defined by augmented reality. As such, NFTs are further demonstrating the convergence of culture with technology, which in turn is having an impact on a number of mainstream industries.

Showcasing culture and community

Specifically speaking, the million-dollar luxury fashion sector has started taking note of NFTs. High-end fashion brands, such as Dolce & Gabbana and Jimmy Choo, have recently launched their own NFT collections, while designer Rebecca Minkoff became the first American female designer to create and showcase an NFT collection during New York Fashion Week 2021.

Megan Kaspar, managing director at Magnetic Capital and member of Red DAO — a fashion-focused decentralized autonomous organization — told Cointelegraph that she believes fashion is one of the most interesting NFT categories:

“The fashion industry, one of the largest industries in the world, generated $2.5 trillion in global annual revenues prior to the pandemic. Red DAO’s thesis around digital NFT fashion includes the potential of global revenues at least doubling over the next two decades due to the digitization of fashion and new capabilities offered.”

While NFTs for the fashion industry is still a very early concept, Kaspar explained that physical fashion today has limitations. For instance, she pointed out that luxury fashion items will always have a secondary retail market value, but as a product is diminished over time, the items lose their worth.

Yet digital fashion pieces will always remain intact, with the added potential to increase in value if they are highly sought after. Kaspar commented that digital NFT fashion pieces can also be worn virtually, as she recently demonstrated during a video interview where she sported virtual NFT earnings and other accessories.

Kaspar further noted that unlike tangible fashion pieces, digital items can be used as collateral for client retention and community engagement. Kaspar mentioned that high-end designers currently have limited engagement with consumers: “NFTs can be used to redeem physical items or to unlock upcoming fashion drops. They can also provide access to private events.” She added, “Designers will also be able to communicate with customers through digital wallets, almost like email.”

While Kaspar realizes that these use cases are still very early, she believes that more brands will eventually start to create NFTs to achieve such benefits. For now, however, it’s notable that a few innovative luxury and haute couture fashion brands have already started to demonstrate the potential of NFTs.

Source: UNXD and Dolce & Gabbana

Shashi Menon, the Dubai-based publisher of Vogue Arabia and founder and CEO of UNXD — a creator and curator platform that designed all of the digital assets for Dolce & Gabbana’s nine-piece NFT collection — told Cointelegraph that his team directly approached Dolce & Gabbana in April this year with the idea of launching an NFT collection.

Menon shared that the opportunity was contextualized from a place of understanding both the luxury fashion sector and the crypto world. “We’ve been involved in both for years and think we have a unique perspective to offer,” he said. Menon believes that the story around NFTs and fashion is not one of technology but rather about culture, remarking that both fashion and NFTs are “ultimately forms of cultural expression.”

While culture may be the most important element from a brand’s perspective, blockchain technology plays a critical role in ensuring the unique benefits achieved by NFTs, such as immutability and provenance. For instance, Menon explained that Dolce & Gabbana’s NFT collection — known as “Collezione Genesi” — was historic for a number of reasons:

“There is deep provenance — here we had one of the world’s iconic luxury brands creating its debut NFT collection, and it was personally designed by the founders/namesake designers. There is also extreme rarity, as the collection only featured nine items. These pieces were made once and will never be made again.”

Menon added that the craftsmanship and materials used in the physical creations were exquisite, which in turn meant that a great deal of time was spent on the digital artwork. “We obsessed over the smallest details of texturing, fabrics, lighting, shadows, reflections and physics to achieve an intensely photorealistic result. The dresses and suit featured Murano glass and Swarovski crystals, while the crowns were made of silver, plated in gold and palladium, and featured beautiful rubies, sapphires and diamonds,” he commented.

The Gold Glass Dress NFT designed by Dolce & Gabbana. Source: UNXD and Dolce & Gabbana

One of the major benefits of digital fashion pieces is the experience they can bring to the virtual world. Menon elaborated:

“The benefits for Genesis holders bridge the digital and the physical worlds in a way not previously done before. We’re providing digital utility through metaverse wearables, physical utility with the products, and exclusive access/experiences to create a truly special result.”

Although the concept remains futuristic, sales were impressive. Dolce & Gabbana announced on Sept. 30 that it had sold the nine-piece NFT collection, alongside some physical couture pieces, for a total of 1,885.719 Ether (ETH), equivalent to nearly $5.7 million at the time.

Kaspar mentioned Red DAO won the auction for “The Doge Crown,” which also came with a physical version. Red DAO paid 423.5 ETH or $1.27 million at the time of sale. The organization also won the two purely digital “Impossible” jackets, bringing its total spending to nearly $1.9 million.

“The Doge Crown” designed by Dolce & Gabbana. Source: UNXD and Dolce & Gabbana

Kaspar explained that winning “The Doge Crown” was an exciting moment for Red DAO, given the fact that the rank of “Doge” (as in an elected head of state) has its roots in Italy, along with the Dogecoin (DOGE) crossover. “We’ve already had a number of celebrities who promote Dogecoin reach out to us asking to wear the crown at upcoming events,” said Kaspar.

In addition to Dolce & Gabbana’s Genesis collection, luxury fashion accessories brand Jimmy Choo has recently launched an NFT initiative in collaboration with New York artist Eric Haze. The collection features 8,888 “mystery boxes” for purchase, underpinning the theme of collectability.

Jimmy Choo x Eric Haze Mystery Box. Source: Ucollex

In addition, a digital version of the sneaker produced for the collection was recently made available for bidding on the Binance platform. All profits from the auction will be donated to The Jimmy Choo Foundation in support of “Women for Women International,” an organization helping female war survivors.

Robert Tran, CEO of Ucollex — the NFT platform behind the launch of the Jimmy Choo collection — told Cointelegraph that the sneaker NFT rotating against a canvas of Haze’s signature script only exists digitally. However, the auction’s highest bidder will also receive a limited-edition hand-painted sneaker.

Remaining true to the theme of culture, Tran added that this collaboration blends fashion with art, along with the evolution of street culture in an experimental meeting of creative minds from different worlds:

“The notion of collectability is a strong theme in the collaboration, as seen with the limited edition ‘Be@rbrick,’ which sold out the morning it launched. So, the timing felt right for the brand to enter the NFT conversation, amplifying New York artist Eric Haze’s creativity and Jimmy Choo’s designs as digital collectibles talking to a new audience. The fusing of digital and physical will only continue to grow in influence.”

Is the mainstream ready for fashion NFTs?

While there certainly are a number of benefits associated with digital fashion today, the concept is still in early development. As social media platforms such as Facebook and TikTok continue to invest in metaverse capabilities, industry experts predict that fashion NFTs will become increasingly common.

For instance, Tran pointed out that metaverses have already been introduced to the mainstream through remote work meetings. In turn, he believes that mass NFT adoption is not far off: “There should be no argument, the industry will only continue to explode. There will come a day when fashion shows are done digitally and the rights of those elements on display are bid on and sold, purely for digital use.”

Jimmy Choo x Eric Haze, Chasing Stars Auction. Source: Ucollex

Menon added that while these concepts may not be universally applicable today, they will become the norm in the future. He pointed out that fashion brands and other businesses interested in continuity will want to create NFTs for their audiences moving forward. In terms of community engagement, Menon said that Dolce & Gabbana plans to launch its own NFT community known as “DGFamily,” which will be rolled out in the near future.

Education is still required

Although it may be safe to assume that more brands will want to create NFTs to stay current, Kaspar pointed out that we are also witnessing a trend where fashion brands and designers are jumping in on the NFT hype just to capture their share of the market. With this in mind, she believes that most brands still do not fully understand the power of wearable digital fashion and the full range of features that NFTs can provide.

For instance, Kaspar shared that a less-discussed disruptive feature of digitizing luxury fashion is the ability to use these items as collateral in decentralized finance smart contracts: “These will all be NFTs on the blockchain that will be tied to smart contracts. That’s what this technology provides.”

Given the early nature of fashion NFTs, Kaspar mentioned that this opportunity also comes with an educational component: “I have fashion brands calling me to figure out how to get involved. I think what Dolce & Gabbana has done is progressive and will lead the way for other brands.”

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Bitcoin bull market ‘2nd leg has started,’ says BTC price model creator

The popular prediction model has been remarkably accurate in the past when it comes to forecasting Bitcoin’s bearish and bullish cycles against its rising scarcity.
Bitcoin (BTC) marking a new high of $67,000 last week has opened…

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The popular prediction model has been remarkably accurate in the past when it comes to forecasting Bitcoin’s bearish and bullish cycles against its rising scarcity.

Bitcoin (BTC) marking a new high of $67,000 last week has opened the possibility of hitting $100,000 by the end of this year.

PlanB, creator of the popular Bitcoin Stock-to-Flow (S2F) model, called Bitcoin’s price retracement from the $60,000-level the “2nd leg” of what appeared like a long-term bull market.

In doing so, the pseudonymous analyst cited S2F, which anticipates Bitcoin to continue its leg higher and reach $100,000 to $135,000 by the end of the year.

The price projection model insists that Bitcoin’s value will keep on growing until at least $288,000 per token due to the “halving,” an event that takes place every four years and reduces BTC’s issuance rate by half against its 21 million supply cap. 

Bitcoin after the 2012, 2016 and 2020 halving. Source: PlanB

Notably, Bitcoin has undergone three halvings so far: in 2012, 2016 and 2020.

Each event decreased the cryptocurrency’s new supply rate by 50%, which was followed by notable increases in BTC price. For instance, the first two halvings prompted BTC price to rise by over 10,000% and 2,960%, respectively.

The third halving caused the price to jump from $8,787 to as high as $66,999, a 667.50% increase. So far, S2F has been largely accurate in predicting Bitcoin’s price trajectory, as shown in the chart below, leaving bulls with higher hopes that Bitcoin’s post-halving rally will have its price cross the $100,000 mark.

Bitcoin S2F as of Oct. 26. Source: PlanB

PlanB noted earlier this year that Bitcoin will reach $98,000 by November and $135,000 by December, adding that the only thing that would stop the cryptocurrency from hitting a six-digit value is “a black swan event” that the market has not seen in the last decade.

An 80% crash later

Despite the high price projections, Bitcoin can still see big corrections in the future. PlanB thinks the next crash could wipe at least 80% off Bitcoin’s market capitalization, based on the same S2F model.

Related: COVID-19 vaccine will spark Bitcoin ‘crash’ — Rich Dad Poor Dad author

“Everybody hopes for the supercycle or the ‘hyperbitcoinization’ to start right now and that we do not have a big crash after next all-time highs,” the analyst told the Unchained podcast, adding.

“As much as I would hope that were true, that we don’t see that crash anymore, I think we will. [...] I think we’ll be managed by greed right now and fear later on and see another minus 80% after we top out at a couple hundred thousand dollars.”
BTC/USD daily price chart. Source: TradingView

But not everyone thinks the next correction will be as dramatic as the previous ones. Dan Morehead, CEO of Pantera Capital, said in mid-October that the next Bitcoin price drop will be less than 80%, citing a consistent drop in selling sentiment after each halving cycle.

Last week, Bitcoin established a new record high at around $67,000 following a 53% rally in October so far. But the new highs prompted profit-taking among traders, resulting in retests of the $60,000 support level.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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