CryptoCorner
Miami—not New York—may emerge as the center of Bitcoin activity in the U.S.
The cryptocurrency is designed to be decentralized, and it's therefore unlikely that anything like Wall Street's three major stock exchanges, key investment banks and top ratings agencies will develop in Florida.
But top crypto talent is gathering in Miami and may soon develop critical mass. The reasons? Low taxes, low operating costs, and a welcoming business environment.
In short, there is no longer any reason for financial companies to be in New York when a speedy, reliable Internet connection means you can be anywhere.
"New York has high taxes and is also one of the toughest states to start a crypto-related business," Kevin Kang, co-founder and principal at Miami-based BKCoin Capital, a digital assets hedge fund, told Newsweek. "We made the move not to make any type of statement but to maximize our revenue potential as well as the deep pool of talent in Miami."
Mayor Francis Suarez seeks to catch the next wave of innovation and recast Miami's image as a financial hub rather than just a tourist destination and retirement haven.
"The City of Miami is dedicated to becoming a model 21st century city," the mayor said in a white paper devoted to cryptocurrencies. "We think that means embracing and supporting disruptive technologies that challenge the status quo and improve how we interact with one another. Bitcoin, the decentralized financial network that allows individuals worldwide to store and send value to one another without intermediary agents like banks or payment processors, is a technology we believe will transform the world."
Suarez points to Miami's low electrical cost thanks to the nearby Turkey Point Nuclear Plant as he attempts to recruit Bitcoin miners to the area after China closed down its operations.
The average cost per kilowatt hour is about 11 cents in Miami compared with the national average of just over 13 cents, the Bureau of Labor Statistics reported.
BitStop installed its first Bitcoin ATM in 2015 and now has machines through the Miami area, including Miami International Airport, the 46th Street Mart and Kwik Stop Hialeah.
"To Buy Bitcoin at a Bitstop you will need: valid ID, mobile phone (and a) Bitcoin wallet," the company advises on its website, which includes the crypto's current price in U.S. dollars.
Miami has attracted people fleeing hyper-inflation in Brazil and Argentina and outright confiscation of wealth in Venezuela. For some, it appears Bitcoin is a good way to send money to relatives.
In June, thousands attended Bitcoin 2021, billed as the largest crypto event ever.
On the second day of the event, Miami-Dade County Commissioner Danielle Cohen Higgins told attendees, "These are financial industries and we want them to have a home, and I think Miami-Dade County is the perfect home."
In a video conference, El Salvador's president Nayib Bukele announced a partnership with Strike, a digital wallet company.
The Central American nation has become the first to make Bitcoin legal tender, although it has met resistance from the World Bank and International Monetary Fund.
Bitcoin is also part of Miami's professional sports teams.
FTX, a cryptocurrency exchange, paid $135 million to secure naming rights to the arena the NBA's Miami Heat call home. It will replace American Airlines on the marquee. FTX launched in 2020. Its success underscores the rapid expansion of the Bitcoin sector.
But the New York-Miami battle isn't over.
CoinDesk, a news and analytics website specializing in Bitcoin and other crypto news, is based in New York.
But CoinBase, once located in San Francisco, has gone remote in keeping with Bitcoin's decentralization and says it's no longer centered in any one city. The company recently launched a successful IPO.
The COVID-19 pandemic is also abating, and that may further shuffle choices for crypto startups and locations as cities across the nation reopen.
"During the COVID-19 lockdown, New York had some of the strictest rules that weren't the most business-friendly, whereas Florida overall kept the businesses open and we saw its economy thrive this past year," BKCoin Capital's Kang said. "Now with everyone getting vaccinated and things normalizing in New York, it will be interesting to see how the dynamics change between New York and Florida."
In mid-morning trading Friday, Bitcoin changed hands at $32,956.01, down 0.84% in the last 24 hours but up 12.72% for the year. The 24-hour range is $32,719.08 to $33,960. The all-time high is $64,829.14. The current market cap is $617.79 billion, CoinDesk reported.
MarketPulse
Soaring real estate prices have pushed many young, first-time buyers out of the housing market.
But the need for personal space remains. For some, a car becomes their haven.
"There's a misconception in the market that older generations work on cars and younger people don't even want to drive," Lev Peker, CEO of Torrance, California-based CarParts.com, told Newsweek.
"The largest segment of our customers is between the ages of 18 and 24, revealing that Gen Z is embracing driving as well as do-it-yourself auto repairs," he said. "It's harder for younger generations to afford their own home and they either live with parents or roommates. Because of this, their vehicle becomes their personal space."
Many Gen Zers are still in school or just launching a career. Money is often tight, so when it comes to auto parts, they shop on price.
There are low barriers to entry in the $400 billion auto parts market and competition is stiff. Brick-and-mortar competitors include Advance Auto Parts, AutoZone, O'Reilly Auto Parts, Napa, CarQuest Auto Parts and Pep Boys. Many also offer online shopping.
Online auto parts stores include Parts Geek, Rock Auto, Buy Auto Parts, and 1A Auto. The online segment grabs about 5% of the market.
"Compared to overall e-commerce penetration figures in other industries, we still have a long way to go to catch up," Peker said.
The online auto parts sector, like online shopping, offers a wide range of products. The pitch: Price and convenience.
"In terms of online competitors we are unique in that most of our online competitors don't have their own supply chain," Peker said. "We source products, do quality control and send them out of our own distribution centers to customers directly. This allows us to reduce steps in the supply chain and pass the savings on to the customers."
The COVID-19 pandemic upended commercial real estate as large numbers of employees worked from home. The pandemic boosted food delivery companies such as DoorDash, GrubHub, Uber Eats and Seamless.
While not as dramatic as home food delivery, the coronavirus led to a similar move to online shopping for car parts, Peker said.
"The pandemic has accelerated this trend, as many consumers embraced do-it-yourself as well as e-commerce," the CEO said. "Not only are there more resources available today to teach you how to fix your own vehicle, but also people had more time to learn those skills during the pandemic. Now that the average age of a vehicle (on the road) is 12 years, these skills will come in handy and help consumers save time and money."
CarParts.com's largest markets are in the Northeast and Southeast. About 46% of the company's customers are married and about 57.11% have children under age 18, the CEO said.
Kinks in the supply chain and strong demand have driven prices higher in many sectors, including auto parts. But a do-it-yourselfer can still save as much as 70% on some repairs compared with relying on a mechanic.
Many shade tree mechanics stick to the basics: Oil changes, keeping the fluid levels up and maybe changing the windshield wipers or replacing mirrors and bumper covers.
"What we are working on at CarParts.com is giving customers all the information that they need in order to decide whether they have the skills and tools necessary to complete the repair, information on how to do the job," Peker said, "and if they choose not to it themselves, transparent pricing on having the repair done for them somewhere in their area."
The company was launched about 25 years ago and went public in 2007.
First quarter 2021 sales increased 65% compared with the same period a year ago to $144.8 million. Gross profit also rose 65% to $49.2 million, but the company reported a net loss of $2.7 million.
Carparts.com plans to nearly double its Grand Prairie, Texas distribution center to 366,000 square feet and add 125 new full-time workers when fully operational in the first quarter of 2022.
