Crypto winter: why did it happen and how to fill the hole?

Причины, последствия и преодоление встречных ветров криптозимы 2022 года

Reading time 6 minutes

According to CNBC statistics, 2022 rocked the cryptocurrency market, which has lost two trillion dollars since its peak in 2021. This period of market cooling is known as “crypto winter”. But there is something about this latest crash that sets it apart from previous crypto downturns: this year’s crypto winter was marked by a series of industry-wide events that exposed holes in the operating system of the “future money” market.

Stablecoin no longer stable
Coinbase and Bitcoin signage during an Initial Public Offering (IPO) at the Nasdaq MarketSite in New York, USA on April 14, 2021. Photographer: Michael Nagle/Bloomberg
Coinbase and Bitcoin signage during an Initial Public Offering (IPO) at the Nasdaq MarketSite in New York, USA on April 14, 2021. Photographer: Michael Nagle/Bloomberg

The most important reason for the crypto winter is the explosion of TerraUSD or UST, a currency known as stablecoins designed to reduce volatility in the cryptocurrency market by maintaining a fixed value. The stability of TerraUSD depends on a complex mechanism driven by an algorithm tied to its sister cryptocurrency LUNA rather than a stable reserve asset like gold or dollars. As Nansen reports, in early July, LUNA’s valuation plummeted from $80 to a fraction of a cent, and TerraUSD also collapsed.

Once praised for providing cutting-edge blockchain investments to users around the world, “the collapse of the Terra blockchain and the UST stablecoin was unthinkable,” Clara Medali, director of research at crypto data firm Kaiko, told CNBC.

The sudden collapse of TerraUSD and UST caused panic in the market. The price of bitcoin has fallen to $26,000, 60% from its peak in November 2021, while ether, the next largest cryptocurrency, has lost 30% in value. Coinbase, one of the largest cryptocurrency exchanges, posted a loss of $430 million. In addition, a tornado swept through crypto networks and hedge funds that had direct contact with UST, in particular the hedge fund Three Arrows Capital or 3AC.

The burden of individual traders
TerraUSD cryptocurrency crash. Source: Coinbase
TerraUSD cryptocurrency crash. Source: Coinbase

The collapse of TerraUSD and LUNA caused a domino effect throughout the electronics industry, including individual investors. Celsius, a company that offered users over 18% returns on staking its cryptocurrencies, filed for bankruptcy in July 2022. In the US, this procedure allows you to restore the corporate debt structure to support the company’s business. Individual investors who have invested their assets in Celsius risk losing them completely.

The risk stems from the fact that the protections and property rights that are used in normal banking legislation for deposits do not apply to cryptocurrency exchanges and exchange contracts. Cryptocurrency translators may disclaim liability for the total deposit amount in accordance with the Celsius terms of use.

Celsius operates like a bank. He will take the deposited cryptocurrency and lend it to other players with high returns. Other players will use it to trade. And the Celsius profit generated from the yield will be used to return back to depositors.

“Players looking for high returns exchanged fiat for cryptocurrency, used lending platforms as custodians, and then those platforms used the funds they raised for high-risk investments – how else could they pay such high interest rates?” said Carol Alexander, professor of finance at the University of Sussex.

Government reaction

As the global financial outlook becomes increasingly cloudy due to rising interest rates, the Special Military Operation in Ukraine, and fuel and grain shortages, consumers are looking for safe investments such as less risky crypto products like ETH. Therefore, it is necessary to issue some rules related to the security of cryptocurrencies in order to minimize the risks and instability of this market.

The Central Bank of Singapore has proposed new measures to regulate the trading of cryptocurrencies and stablecoins, including banning lending companies from taking cryptocurrencies from some retail customers and then lending to others with it – such a scheme does not provide sufficient security for depositors’ assets.

On October 26, the Australian government stated in its budget announcement that investors would be required to pay capital gains tax on profits from the sale of crypto assets through exchanges.

On October 27, the UK Finance Minister added to a bill submitted to Parliament the UK’s right to regulate all cryptocurrencies.

In all the chaos of the crypto winter, imposing rules on all participants, potentially destabilizing the market, will provide the necessary protection to consumers and maintain long-term market stability.

 

 

 

 

How does Netflix make money and why is it at a loss?

The financial strategy of the global leader in the streaming-on-demand entertainment business

Reading time 8 minutes

During the three-month period, the streaming giant laid off around 450 employees due to a loss of a raft of subscribers. According to the statistics provided by Macrotrends, from 2014 to 2019, the loss of Netflix has only increased, although the situation was rectified in 2020 and the coronavirus pandemic, which brought in a profit of almost two billion USD, 2021 again ended with negative indicators for the platform. Many experts attribute this situation in the market to the economic model in which the platform operates.

THE BIRTH OF STREAMING AND THE DEATH OF CABLE

In 1999, Netflix started as a DVD rental service, offering customers an unlimited monthly cassette subscription, as well as a personalized movie recommendation system. To create a large movie library, the company purchased the rights and licenses to a wide variety of content, part of an online cinema portfolio that still includes these acquisitions.

A decade later, Netflix pioneered the Internet streaming market, while other media giants offer cable TV subscriptions for $100, Netflix only requires its subscribers from 8 up to 15 dollars. In addition to the pricing policy, viewers are bribed by other factors: multiple people can use the same account from different devices, favorite shows can be viewed at any time, and the library constantly being replenished with hit shows that Netflix buys the rights to and content of its own production.

All this caused consumers to abandon cable subscriptions in favor of streaming, and movie and TV series creators not to release their products on TV, simply because Netflix and its similar companies offered more money than cable channels that were losing money. According to Bloomberg’s statistics in 2018, 6 people give up cable TV every minute, of which in return, many people subscribe to online services.

THE FLYWHEEL MODEL
Flywheel model for Netflix
Flywheel model for Netflix

Despite the removal of these competitors, Netflix is still operating at a loss. This is largely due to their economic policy, known as the “flywheel method”. It works like this: the service takes money from a user’s subscription and spends it on content creation, content distribution and creating a pleasant user experience, which forces the user to renew the subscription theirs and everything went back to the way it was. The problem is that Netflix spends more than $500 per user while it only brings the company about $10. This difference is covered by the new viewer’s subscription, i.e. your payment for one subscription offsets the cost spent by the user who purchased it before you and the amount the next subscriber will reimburse you.

The problems of this plan will become apparent once Netflix hits the subscription threshold – there will simply be no potential buyers left in the US and the world able to cover these losses with their own money. Analysts estimate that the maximum number of Netflix subscribers in the US is 60-90 million and around 200 million in the rest of the world, while in the first quarter of 2022 there were around 80 million people in North America and about 150 million people in the rest of the world.

Simultaneously, due to the peculiarities of the market, a subscriber outside the United States brings the company much less money than an American: for example, the cost of a subscription in India at the start was only $3 – three times less than in the company’s homeland.

By way of explanation, in order for the flywheel to continue working, Netflix is forced to look for new subscribers outside the United States, in the face of the fact that local markets cannot offer a profit comparable to the United States, as well as to raise prices in richer and more developed countries, which already leads to an outflow of subscribers.

COMPETITORS AND WOLVES OF WALL STREET

For Netflix, the situation is compounded by increased competition: almost every major corporation has already launched or is preparing to launch its streaming service. Coincidently, knowing the need for their competitor to raise prices, other streaming services deliberately underestimate the cost of a subscription: Disney+ asked for only $ 7 at the beginning, while providing exclusive and discussed content like the new parts of Star Wars and the Mandalorian series, as well as absorbing another online movie theater Hulu. In other words, purchasing Disney+ for a price half the price of a subscription to Netflix, the user received two streaming services at once.

Netflix official account tweet saying "Love is password sharing"
Netflix official account tweet saying “Love is password sharing”

Simultaneously, Netflix itself is also forced to take not very pleasant measures for users, along with the mentioned price increase, the company also wants to ban users from sharing passwords with loved ones, and about 1/4 numbers all subscribers do this, although the company previously considered this function as one of the important being.

This policy affects the number of people who unsubscribe. Users are also canceling subscriptions due to the lifting of quarantine restrictions in many countries: people work, study, travel, and less sit at home in front of computers and TVs. As a result, in the second quarter of 2022, one million people canceled their Netflix subscription, and a similar number of unsubscribes is expected before the end of the year.

Netflix's largest shareholder Bill Ackman
Netflix’s largest shareholder Bill Ackman

This situation in the market also affects the investment attractiveness of the company: in the past year, the value of shares has decreased by more than 60%, in such a crash, one of the company’s largest shareholders lost more than a billion dollars, and then sold his entire three million shares.

Despite the unfavorable economic situation and loss, Netflix is unlikely to stop, in a letter to shareholders the company assured that canceling family subscriptions will only lead to new users. Streaming and the loss of subscribers are also tied to macroeconomic factors: the consequences of the pandemic and the Russian invasion of Ukrainian territory. In addition, the company will not reduce its content costs: in 2021, online cinemas have spent 17 billion dollars on it.

How to be employed in 2030

What skills employers will need in 10 years

Reading time 5 minutes

It is not enough for today’s employers that a programmer knows how to create applications and a translator has a good grasp of texts. Potential employees must have not only professional but also «soft» skills.

Soft skills are supra-professional competences, which help to work more effectively in any sphere. For example, they include the ability to communicate with people and quick learnability. The value of these skills has increased in today’s world, where humanity’s opportunities are increasingly global. You need to adapt to technological changes and communicate with people of different nationalities.

According to Kontakt InterSearch Russia consulting company’s research for Forbes Woman employers already expect soft skills from potential employees. Creators of the  «Atlas of professions» project predict even more significant changes on the labor market.

What is worth getting better at today to be a sought-after specialist in 10 years?

1. Working with people

Communication with people is a skill worth learning

This skill has 3 components::

Multiculturalism and multilingualism. More and more companies are operating in the international market, so employees need to know foreign languages. Knowledge in the specifics of intercultural communication will be a plus.

Representatives of different cultures working together

Customer centricity. It is possible to win the battle with the competitors only if the product is created exactly for the client’s needs. That is why employers appreciate the ability to see the demand and to adjust to it.

Emotional intelligence. Empathy, the ability to feel another person is valued in today’s world. People with these qualities find it easier to find common ground with others, which helps not only in everyday life but also in work.

2. Flexibility

Quick learning curve helps you adapt to the demands of the modern world

Quick learning curve. In today’s world, new technologies often appear and you need to adapt to them in a minimum of time. The needs of the labor market are also changing, so you need to learn new professions quickly.

Working under uncertainty. The year 2020 showed that you can’t always be sure of tomorrow. It is necessary to be able to work here and now, to try to foresee the further development of events and not to be afraid of the unknown.

3. Project Management

Project management is no longer the task of the manager

The strict hierarchical structure of companies is replaced by project groups. Representatives of different professions have to show leadership and take responsibility for leading part of the work.

4. Green thinking

Businesses pollute the environment

Manufacturers of goods are thinking about the impact of their business on the environment. Therefore, modern professionals in any field must understand at a basic level how to reduce harmful emissions and the use of natural resources. In Russia this culture is in its infancy, but in Japan the environmental friendliness of production is already controlled at the legislative level.

To develop soft skills, you can join a discussion club, read books on the topic, watch professionals on TED, or take a course.

«Soft» skills are useful not only in work. In life, we communicate with people, learn, and set goals, each of which can be viewed as a project. Above-the-professional skills will help in these areas of life as well.

Nonexistent clothes

What is virtual clothing and why is it becoming popular?

Reading time 4 minutes

Imagine that you browse online stores in search of new clothes, and your eye involuntarily clings to a magnificent jacket. After a moment of thought, you decide to purchase it. But instead of ordering this jacket and getting it in your hands, you send one of your photos, and after a while you get it back. The only difference is that now you are depicted in a new jacket.

виртуальная одежда
The collection of virtual clothing by “Carlings”

This concept of digital clothing may seem strange, but it was based on games and applications. The users spend real money on their virtual character’s clothes and hairstyle. Thus, the profit of the game “Covet Fashion”, which allows players to try on designer clothes and accessories using digital visualization, amounted to $ 53.4 million for 2018.

The first collection of virtual clothing, which was released in November 2018 by “Carlings”, instantly gained popularity. “In real life”, says Kiki Person, a manager of Scandinavian company, “such designer clothes cost thousands of pounds and are worn only once —to be posted on social networks.”

виртуальная одежда
The collection of virtual clothing by “Carlings”

Digital clothing has received many positive reviews and has become a trend not only in Scandinavia. So, the influencer Daria Simonova was one of the first in the world to try on virtual trousers and a jacket. The girl noted that the concept was interesting and in line with modern trends.

“Firstly, it is eco-friendly, and secondly, clothing these days is more of an art on social networks. Virtual clothing is very convenient, and its design potential is huge, because it is cheaper to create.”

 Since 2018, digital clothing has spread throughout the world. In May 2019, a virtual dress was sold at a charity auction for £ 7,500. “In ten years, everyone will be wearing digital clothes”, says Mr. Ma, a buyer of this dress. “It’s definitely very expensive, but it’s a bit of an investment”, he added.

виртуальная одежда
The collection of virtual clothing by “Carlings”

There are also companies producing digital clothing in Russia. The “Грань” brand presented a collection that was advertised by Alyona Pole, a virtual model: “I experiment a lot with digital materials, because I believe that new fashion should be environmentally friendly and should not destroy the environment.”

 

 

Coronavirus is a new trend of the year

How the disease has incluenced on the fashion industry

Reading time 5 minutes

When you enter the subway, citizens with masks on their faces surround you. When you scroll through social networks, you notice numerous memes about the coronavirus and the end of the world. We follow the covenant of Joan Rowling: “Fear of a name only enhances the fear of one who wears it.” Masked people went outside, but they won’t save your lives.

Coronavirus is a serious disease, a cure from which will be found in the near future. We hope. In the meantime, it not only affects the body, but also influences on various areas of life. For example, coronavirus is ruthless to the fashion industry. Shanghai Fashion Week has been postponed due to concern of the organizers. It was supposed to start on March, 26th. New dates have not yet been announced, but it is already mid-February. We remind you that Fashion Week is a large-scale event and it takes time to prepare for one: you need to book locations, arrange with coordinators and look for venues for an after-party. A month before the start, a lot of people have already been involved and the  designers take care of their health.

Marine Serre show 19/20

The economic component is an equally important indicator for the organizers. According to Kommersant, a relatively small number of Chinese buyers were recognized at London Fashion Week. This fact worries brand founders a lot. Ralph Lauren, Burberry, Nike, Capri fashion house, which owns brands Michael Kors, Versace, Jimmy Choo and others, have closed many of their outlets in China, as well as they reduced the opening hours of the remaining ones. The ProFashion portal claims that Ralph Lauren sales will fall to $ 55-70 million because of the epidemic during the fourth quarter of 2020. While looking for a way to survive possible losses, two large conglomerates LVMH and Kering, as well as other fashion companies donated over $ 2.88 billion for the vaccine’s research.

Marine Serre Ready To Wear Fall Winter 18/19

Despite the financial torubles, coronavirus made another problem visible – the popularity of various things that hide faces. Robbers have never been so in vogue. Lots of magazines, for example, Fashion United, call medical masks a new trend of the season. A curious fact is that fashionistas or sincerely frightened individuals buy rolls of masks from Aliexpress, a web-site which supplies goods from China. The Blueprint mentions that the virus cannot exist outside of biological objects. So, you can safely purchase cheap goods from Chinese retailers. But it can be doubted that they will be delivered quickly, as the work process is intermittent. The workers might get sick because the factories are located near the outbreak.

Balaclava IknitHandmade 19/20

Many clothing brands, in obedience to protests, demonstrated masked models, balaclavas and respirators (Gucci, Rick Owens, Moncler and even Calvin Klein) on the catwalk in past seasons. They seemed to foresee that at the beginning of 2020, these accessories would become the most popular. Fashionistas buy specific medical accessories or knitted balaclavas, not only because of the fear of infection, but because of the atmosphere of general concern. While others are afraid of going out, they show their awareness, firstly, in terms of news, and secondly, in terms of fashion trends.

 

Off the hook

How to safeguard personal data from those who are willing to steal it

Reading time 6 minutes

The 28th of January is the international day of personal data protection since 2006. The Committee of Ministers of the Council of Europe has established the date to encourage people to increase their attention to the information they poste on the Internet. From this article, you will know what rules you should follow in order not to become an easy target for scammers.

Surf the net via VPN

Use VPN to provide encrypted Internet traffic and network anonymity. The data that pass through the VPN is secure because the technology creates a protective layer between the device and the Internet. Data interception is unlikely.

To use VPN, just download the application and log in. Choosing a service, remember that it should not store data or transfer it to anyone. It is proved that some free providers collect user information or do not encrypt traffic. Other services earn money on a subscription, not on data. Tor browser is an alternative to VPN. It preserves user’s anonymity and protects the Internet connection from surveillance.

Choose passwords properly

Rules for appropriate creating a password
Rules for appropriate creating a password

The main rule is one account — one password that is long and difficult. The more various symbols are used, the more effort hacker have to make to get the access to the account. Password manager is a handy tool that help not to forget all usernames and passwords. The program generates unique successions which are stored in an encrypted database for all usernames. To enter it, the master password is needed. It is the only succession to be remembered. By the way, some managers support two-factor authentication what makes them more secure.

Set up two-factor authentication

Try to apply it everywhere to protect data additionally. In this case to enter the account, the system requests two different types of data. Username and password is the first type, special code is the second. This code can be entered only by the mobile phone. It comes via SMS or email, sometimes biometric data or a USB key are used, though it occures less commonly. Moreover, a special authenticator application may be the second stage of protection. The app generates codes for entering accounts. This method is more reliable than SMS messages, because they are easy to intercept.

After having enabled two-step authentication in the account, choose which type of data you will enter in the second stage. Then set up backup ways to log in to your account
After having enabled two-step authentication in the account, choose which type of data you will enter in the second stage. Then set up backup ways to log in to your account

Encrypt!

Communicate via messengers that support end-to-end encryption instead of calling or sending SMS. Otherwise, correspondence and conversations will be stored on the servers of operators in the clear.

Enable the encryption of the file system. Then no one but you will get access to the decrypted correspondence, even if they get hold of a phone or laptop. The encryption is usually enabled on mobile devices by default while instructions for Windows or Mac computers are available on the Internet.

Disable displaying messages in notifications on the locked screen. If a hacker sees a one-time password from the Bank, even encryption will not help. For the same reason, put a PIN code on your SIM card: after stealing the phone and moving the card to his own, the attacker will still not get to your funds.

In 2019, hacker attacks on Sberbank began to occur 15-20% more often, and on January 2, 2020, the Bank was subjected to the most powerful attack in its history
In 2019, hacker attacks on Sberbank began to occur 15-20% more often, and on January 2, 2020, the Bank was subjected to the most powerful attack in its history

Encrypt the email: PGP technology will help to do this. The message is encrypted before sending and the interceptor will not be able to read it.

Use the HTTPS Protocol. Unlike HTTP, it encrypts the data that you put on the site, what means that they will not be able to intercept it.

Maintain the information hygiene

  • use licensed software
  • install updates
  • try to avoid public wi-fi networks
  • use anti-virus software
  • learn to make sure that no one is listening to you

Share the security rules with interlocutors whom you exchange data with, and then your correspondence will be protected at both ends.

From fast fashion to sustainable consumption

H&M is now renting clothes

Reading time 4 minutes

The Swedish retailer H&M has joined the eco-initiative previously put forward by competitors – Banana Republic and Urban Outfitters. The giant of the mass market began to test the service of clothes rental, the company said in its official statement. It was decided to start with a flagship store in Stockholm: residents of the Scandinavian capital will be able to rent their favorite items, wear them for a week, and then return them to the store. However, you should not flatter yourself – you can only have three items at the same time and the pleasure is not for free. The price of renting is 350 SEK (≈ 2,350 rubles) per item.

Interior of Times Square H&M store. Hennes & Mauritz  is a Swedish multinational retail-clothing company, known for its fast-fashion clothing for men, women, teenagers and children.

We have been looking in this direction for many years and are happy to finally provide fashionistas with the opportunity to rent items from our collections. H&M is committed to changing the way we manufacture and consume fashion”, said Pascal Brun, Head of Sustainability Department at H&M.

In order to inspire customers to reuse and recycle their clothing, H&M opened an atelier in the same flagship store in Stockholm. So, the Swedes will be able not only to rent new clothes, but also to repair the “oldies” of the wardrobe.

H&M flagship store at Times Square (New York, USA)

Innovations will be tested during three months and, if they turn out to be successful, will be introduced in H&M stores around the world. We can only wait until the innovations reach Russia, and not to forget about another service available at Moscow H&M stores. They accept clothing for recycle use.

It is worth paying tribute to H&M. The Swedish company passed the year of 2019 under the “eco” sign. The brand completely abandoned plastic bags in favor of paper bags and presented the next collection of Conscious Exclusive clothing made from recycled materials. The designers utilized pineapple fiber instead of genuine leather, waste from oranges instead of silk. These are modern environmental alternatives to raw materials of animal origin.

 

 

Rihanna named world’s richest female musician

Forbes estimated the fortune of a pop diva at $600 million

Reading time 3 minutes

Popular singer Rihanna topped the list of the richest women in the music industry. She received this status thanks to a large contract with a world leader in the production of luxury clothes LVMH Moët Hennessy Louis Vuitton. The corporation includes such brands as Louis Vuitton, Guerlain, Moët & Chandon, Givenchy, Chaumet and Hennessy. LVMH is headed by billionaire Bernard Arnaud, his family is in 4th place on the Forbes list. Arno’s fortune is estimated at $76 billion.

Fenty Beauty
The greatest income to the singer brings luxury decorative cosmetics

Renowned singer and LVMH have been working together on Fenty Beauty luxury cosmetics brand since 2017. At the initial stage, sales of the line simultaneously covered the Internet and 1,620 stores in more than 17 countries of the world. Products also represented the largest network of cosmetics stores Sephora, which is also owned by LVMH. Within a few weeks of sales, the new cosmetic line brought the creators about $100 million. An important success factor was the promotion of the brand in an Instagram-star account, which is followed by 72 million users. In 2018, the creators of Fenty Beauty earned about $570 million.

LVMH presumably owns 50% of the company, while the singer owns 15%. The official representative of Rihanna denied this information, but he did not share the exact data.

In addition to the cosmetic brand, Rihanna is also promoting her Savage X Fenty underwear line. The singer leads this project together with a large retailer TechStyle Fashion Group. The main idea of ​​the brand is that beauty is different, and girls should not be ashamed of their bodies.

In May of this year, a popular singer with the support of the LVMH corporation presented her own fashion house Fenty. The brand creates luxury clothing, shoes, accessories and jewelry. Rihanna believes that Bernard Arno is the best partner in business and in creativity. According to the singer, the general director of LVMH gave the actress complete freedom of action and trusted her taste.

Fenty luxury brand has become the first fashion house created by Moët Hennessy Louis Vuitton in the last 30 years. The line from Rihanna promotes the principles of inclusion and offers a wide range of sizes.

Messi, Ronaldo and Neymar are the richest athletes

For the first time, three footballers headed the list of the highest paid athletes, according to Forbes

Reading time 5 minutes

Every year, Forbes magazine ranks the richest athletes, which takes into account professional earnings, prize awards and advertising contracts. In 2019, the palm went to Lionel Messi, who earned 127 million in one year. Ronaldo followed with 109 million revenues and Neymar with 105 million.

For many years Lionel Messi and Cristiano Ronaldo have been among the three richest athletes according to Forbes

The captain of the national team of Argentina and Barcelona has the highest salary among football players. The Catalan club pays Messi 42 million dollars a year, in total with image and prize payments he receives 92 million. In addition, Messi has contracts with Adidas, MasterCard and PepsiCo. In the past, Messi had a trial with the Spanish tax service, after which Barcelona had pledged to pay off the player’s debts and pay his taxes. Such a gesture from the club has significantly saved the cost of a football player.

Lionel Messi is the face of PepsiCo soft drinks

Cristiano Ronaldo has repeatedly headed the list of the highest paid athletes. In recent years, he began to give first place to his sworn rival Lionel Messi. The main income is advertising contracts and business activities. Cristiano Ronaldo has his own line of clothing and underwear, hotels in New York, Madrid, Lisbon and on the native island of Madeira. Recently opened cosmetology clinic in Spain. He gave this clinic to his bride, Georgina Rodriguez. Brand CR7 brings a separate income. In addition, Ronaldo has a lifetime contract with Nike, the amount of the transaction amounted to more than $ 1 billion.

Cristiano Ronaldo has a line of clothing and underwear under the logo CR7

After moving from Barcelona to PSG, Neymar’s annual income increased significantly. His salary in the Paris club is 38 million dollars. In total, with prize and image payments, it reaches 75 million. The Instagram player has 120 million subscribers, and one advertising post in it costs almost 500 thousand dollars.

Neymar, like Ronaldo, represents the sports brand Nike

For the first time, only footballers entered the top 3 richest sportsmen according to Forbes. Last year, boxer Floyd Mayweather, who earned the lion’s share of his fees after winning a victory over Conor McGregor, won first place. Tennis player Serena Williams with $ 29.5 million in revenue was the only woman who entered the Forbes list. She earned on advertising contracts five times more than on a tennis court.

The only representative of the female half of the sport was tennis player Serena Williams

The rating from Forbes includes representatives of basketball, football, tennis, boxing and Formula 1 racing.

From Jay-Z to Drake: Richest Rappers

The Forbes rating is headed by the first billionaire in hip-hop culture — Jay-Z

Reading time 7 minutes

In early June, an influential financial publication Forbes published a list of the richest rap artists. The wealthiest rapper in the world is a hip-hop artist Jay-Z, the husband of the famous R’n’B singer Beyoncé. In early 2000s he sang: «I’m already the G.O.A.T. — next stop is the billie». So it happened: today the musician’s capital is one billion dollars. Jay-Z became the first owner of a billion dollars in the history of hip-hop culture.

Jay-Z (Shawn Corey Carter) for the second year in a row becomes the wealthiest rapper in the world

The rapper invested in a private company Uber, music service Tidal, alcohol production company Armand de Brignac и D`Uss. The musician gains his profit from concerts and Roc Nation service, and also a partnership with the recording Studio Def Jam. The real estate of Jay-Z and his wife Beyoncé is estimated at $50 million, and the collection of art objects — $ 70 million.

The younger generation of hip-hop artists takes Jay-Z as an example of success. TV presenter and novice rapper Fab 5 Freddy believes that Jay-Z — an example of how to make the real American dream come true.

Second place — Dr. Dre, $800 million

Dr. Dre (Andre Romelle Young ) was considered the richest artist in hip-hop culture until March 2018

Five years ago, Dr. Dre. declared himself the owner of a billion dollars. However, Forbes did not confirm this information about his financial condition. In 2014, the musician sold his line of headphones Beats by Dr. Dre to Apple for three billion dollars. He owned approximately 20-25% of the company’s shares. For the deal with Apple, hip-hop artist received an advance of about $500 million. Only last summer the company paid Dr. Dre remaining fee, however, even this did not help him top the Forbes’s list.

In recent years, the artist has put his music in the background. Dr. Dre invested his money in real estate and charity. He bought a huge Villa in California for $40 million. Together with partner Jimmy Iovine, he also invested $70 million in the development of the Academy of Arts at the University of Southern California.

Third place — Diddy, $740 million

In 2017, P. Diddy (Sean John Combs)  was recognized as the wealthiest hip-hop artist

Hip-hop artist Diddy earned his first money at the age of 12 by selling newspapers. He admitted this in an interview in the anniversary issue of Forbes. At that time the edition considered Diddy to be the wealthiest and most influential rap artist.

Now the musician takes the third place in the list of the richest rappers. Market fluctuations have a negative impact on his business projects. The most unprofitable were the cable  business Revolt and the clothing brand Sean John.

However, the rapper Diddy owns a successful business as well. For example, the production of luxury vodka Ciroc. Products give the musician a lot of money, as the volume of sales has increased in recent years. According to Forbes, Diddy will soon replace Jay-Z and become a billionaire.

Fourth place — Kanye West, $240 million

Kanye West
In the promotion of the collection of sneakers Yeezy, actively involved the wife of the rapper – Kim Kardashian

The famous performer and husband of epotage Kim Kardashian Kanye West ranks fourth in the list of wealthy colleagues. Recently, the musician can be spotted at private Sunday services on the South coast. West also held an Easter service at the largest Coachella festival.

In 2016, the musician told about his debt of $53 million. Then he suggested the Facebook founder Mark Zuckerberg to invest one billion dollars in his projects. In 2019, Kanye West still entered the top five wealthy artists in hip-hop culture, but thanks to another source of investment. Kanye West has a partnership  with the sports brand Adidas for more than one year. Prior to this brand, the artist had a contract with Nike. This collaboration with Adidas brings huge income to the rapper, his line of sneakers Yeezy is gaining more and more popularity. According to Forbes, if Yeezy sales do not stop growing, Kanye West will become a billionaire thanks to the business.

Fifth place — Drake, $150 million

Drake
Hip hop artist Drake produces strong alcohol, which brings him huge profits

Concludes the list of the richest hip-hop artists 32-year-old canadian rapper Drake. But he is already catching up with his colleagues: over the past year, his musician’s capital has doubled. Drake has invested in real estate and in its own brand of whiskey Virginia Black. The rapper cooperates with the XS Nightclub in Las Vegas, which also brings the rapper a large fee.

In 2013, the musician admitted that earning more money is one of his main goals. And he sticks to the plan: since that time, the average price tag for one concert of the artist has grown from $500,000 to more than two million dollars.