Connect with us

BUSINESS

Looking Ugly’: Crypto market crash intensifies after $300 billion sell-off

Published

on

The price of bitcoin fell to a three-month low Monday morning, continuing a slide that began when the Federal Reserve sparked a broad sell-off last week by cautioning it may move more quickly than previously expected to reverse policy meant to bolster the economy during the pandemic

Experts forecast the latest crypto drawback could persist for weeks if the central bank’s hawkish stance becomes more aggressive.

Bitcoin fell as much as 5% to $39,692 by 9:45 a.m. ET, according to crypto data website CoinGecko, bringing its losses to more than 12% since the Fed warned on Wednesday it may move more aggressively to remove pandemic-era stimulus as it looks to combat high levels of inflation.

In a weekend email, analyst Yuya Hasegawa of cryptocurrency broker Bitbank cautioned he expects the world’s largest cryptocurrency could continue falling until the broader market, which has similarly struggled since the Fed’s Wednesday announcement, digests the likelihood of the Fed hiking interest rates as soon as March.

Though Hasegawa said bitcoin could fall as low as $40,000 in the near term, the analyst cautioned the government’s consumer price index report due out Wednesday could intensify the price weakness if it shows inflation spiked more than expected, further justifying the Fed’s decision to ease stimulus and raise rates.

In a Monday note, Marcus Sotiriou, an analyst at UK-based digital asset broker GlobalBlock, said he expects bitcoin will hover around $40,000 even if the CPI report on Wednesday shows inflation rose more quickly than expected last month, positing the recent sell-off has likely priced in much of the negative expectations.

On Thursday, crypto billionaire Mike Novogratz, the CEO of financial services firm Galaxy Digital, told CNBC the selloff could push bitcoin down another 8% from current prices to as low as $38,000—a level unseen since early August.

Bitcoin was far from alone in falling Monday morning. Over the past 24 hours, ether, binance coin and sol were down as much as 5%—pushing losses to roughly 20% apiece over the last week.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

BUSINESS

Bitcoin falls 4% to near $35,000 mark

Published

on

Bitcoin dropped again on Saturday and was last down around 4 per cent for the day, hovering around the $35,000 level.

Bitcoin, the world’s biggest and best-known cryptocurrency, is now about half its $69,000 peak in November. It was last at $35,049, after falling as low as $34,000 and following a steep fall on Friday.

The currency has had wild price swings and has been hit as risk appetite has fallen on inflation fears and anticipation of a more aggressive pace of interest rate hikes from the U.S. Federal Reserve.

Other risk assets have fallen with stocks falling on Friday. The S&P 500 and Nasdaq recorded their biggest weekly percentage drops since the start of the pandemic in March 2020.

In a research note on Friday, Edward Moya, senior market analyst for the Americas at OANDA, said bitcoin was falling as “crypto traders de-risk portfolios following the bloodbath in stocks” and in advance of next week’s Federal Reserve policy meeting.

Continue Reading

BUSINESS

Intel to invest $20 billion in U.S. chip-making facility

Published

on

Intel Corp said on Friday it would invest up to $100 billion to build potentially the world’s largest chip-making complex in Ohio, looking to boost capacity as a global shortage of semiconductors affects everything from smartphones to cars.

The move is part of Chief Executive Officer Pat Gelsinger’s strategy to restore Intel’s dominance in chip making and reduce America’s reliance on Asian manufacturing hubs, which have a tight hold on the market.

An initial $20 billion investment – the largest in Ohio’s history – on a 1,000-acre site in New Albany will create 3,000 jobs, Gelsinger said. That could grow to $100 billion with eight total fabrication plants and would be the largest investment on record in Ohio, he told Reuters.

Dubbed the silicon heartland, it could become “the largest semiconductor manufacturing location on the planet,” he said.

While chipmakers are scrambling to boost output, Intel’s plans for new factories will not alleviate the current supply crunch, because such complexes take years to build.

Gelsinger reiterated on Friday he expected the chip shortages to persist into 2023.

To dramatically increase chip production in the United States, the Biden administration aims to persuade Congress to approve $52 billion in subsidy funding. read more

U.S. House Speaker Nancy Pelosi said on Friday the House of Representatives would soon introduce a bill on competitiveness to help bolster semiconductor investment and supply chains. That would include the $52 billion funding.

U.S. President Joe Biden touted Intel’s investment on Friday at a White House event with Gelsinger and again made the case for congressional action.

“China is doing everything it can to take over the global market so they can try to out compete the rest of us,” Biden said.

U.S. Commerce Secretary Gina Raimondo said at the event the current semiconductor supply chain is “far too dependent on conditions and countries halfway around the world.”

Gelsinger said without government funding “we’re still going to start the Ohio site. It’s just not going to happen as fast and it’s not going to grow as big as quickly.”

THE CHIP FEAST AND FAMINE

Intel ceded the No. 1 semiconductor vendor spot to Samsung Electronics Co Ltd (005930.KS) in 2021, dropping to second with growth of just 0.5%, the lowest rate in the top 25, data from Gartner showed.

As part of its turnaround plan to become a major manufacturer of chips for outside customers, Intel broke ground on two factories in Arizona in September. The $20 billion plants will bring the total number of Intel factories at its campus in the Phoenix suburb of Chandler to six. read more

Gelsinger told Reuters he still hoped to announce another major manufacturing site in Europe in coming months.

It is not just Intel ramping up investments. Rivals Samsung Electronics and Taiwan Semiconductor Manufacturing Co or TSMC also have announced big investment plans in the U.S. And that’s raising questions about a glut in chips going forward.

“We still have years in front of us before we’re even having a semblance of supply demand balance,” said Gelsinger. “Ask yourself what portion of your life is not becoming more digital.”

“Yes, the industry is growing, and maybe the metaverse solves world hunger for the semiconductor industry. But there is a big bubble coming,” said Alan Priestley, an analyst at Gartner.

U.S.-CHINA TECH WAR

The U.S. build up comes as a tech war between the U.S. and China is causing a decoupling of certain technologies, such as chips. Companies looking to sell technologies to China are considering basing outside of the U.S. to avoid being snagged by U.S. export control rules. China is also investing heavily in its semiconductor manufacturing capacity.

While Gelsinger also touted the security and economic benefits of boosting U.S. chip production on Friday, Bloomberg reported in November that the Biden administration pushed back against a prior plan by the company to boost silicon wafer production in China over national security concerns.

Intel has drawn fire for its decision to delete references to Xinjiang from an annual letter to suppliers after the chipmaker faced a backlash in China for asking suppliers to avoid the sanctions-hit region.

When asked about it in a briefing last month, White House press secretary Jen Psaki said she could not comment on the company specifically, but said “American companies should never feel the need to apologize for standing up for fundamental human rights or opposing repression,” reiterating a call to industry to ensure that they are not sourcing products that involve forced labor from Xinjiang and urging companies to oppose China’s “weaponizing of its markets to stifle support for human rights.”

Intel’s Ohio investment is expected to attract partners and suppliers. Air Products (APD.N), Applied Materials (AMAT.O), LAM Research (LRCX.O) and Ultra Clean Technology have shown interest in establishing a presence in the region, Intel said.

Construction of the first two factories is expected to begin late in 2022 and production in 2025.

Continue Reading

BUSINESS

Nigeria attracts $31.82bn from United States, five others in 33 months

Published

on

Capital inflows from the United Kingdom, the United States, South Africa, the United Arab Emirates, the Netherlands, and Mauritius hit $31.82bn in three years, according to data from the National Bureau of Statistics.

The NBS data showed that the six countries accounted for 83.32 per cent of the total capital of $38.18bn imported into Nigeria from over 100 countries from January 2019 to September 2021.

The UK accounted for the highest foreign inflow of $17.34bn, followed by the US ($5.79bn), South Africa ($3.99bn), UAE ($1.80bn), Netherlands ($1.68bn), and Mauritius ($1.09bn).

According to the NBS, capital importation data is obtained from the Central Bank of Nigeria and includes imported physical capital, such as equipment, and financial capital importation.

It added that capital importation comprises three main investment categories, namely foreign direct investment, foreign portfolio investment, and other investments.

It said FDI includes equity and other capital, while FPI includes equity, bonds, and money market instruments; ‘other investments’ include trade credits, loans, currency deposits, and other claims.

In 2019, Capital inflow from the six countries declined from $20.09bn in 2019 to $7.94bn in 2020. It stood at $3.78bn in the nine months to September 2021.

The Managing Director, Cowry Asset Management, Johnson Chukwu, attributed the drop in capital importation to the fall in FPI.

According to him, portfolio investors are probably discouraged to invest in the Nigerian market due to foreign exchange illiquidity.

He said, “The decline in capital importation has been consistent for the past three years, if you look at the data.

“In terms of portfolio investment, which is the major component, I think the issue is that foreign portfolio investors have likely stayed away from the Nigerian market because of foreign exchange illiquidity, as some of the funds that are trapped are yet to be accessed.”

Continue Reading

Trending