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Bitcoin Tanks on Crypto Outflows as SEC Plans Ripple Ruling Appeal and Worldcoin Launched

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MNN EDITOR
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Bitcoin has run out of positive news needed to sustain a recent push higher. The flagship cryptocurrency remains under pressure tanking below the $30,000 a coin level as cash inflows into the project dwindle. Last week marked the first time in many weeks that the project suffered a $13 million outflow as investors moved to lock in gains. Investors’ sentiments appear to he moved to smaller coins, with Ether and Ripple as the main beneficiaries.

Crypto Inflows and Outflows

Even as Bitcoin experienced capital outflows, ETH-focused investment products enjoyed the largest capital inflows of $6.6 million. The inflows suggest that sentiments that have been poor yearlong, are beginning to turn around for the second largest cryptocurrency. XRP, on the other hand, experienced $2.6 million in inflows

Nevertheless, the other coins could also come under pressure as the overall segment witnessed a weekly outflow of $6.5 million after gaining $742 million over the previous four weeks. The outflows come on all the positive news being priced in and the market looking forward to other catalysts.

Bitcoin and other cryptocurrencies had turned bullish after asset management giant BlackRock confirmed it had filed the long-coveted spot BTC exchange-traded fund with the Securities and Exchange Commission. The filing triggered a swarm of competitors to renew their applications as the race to target institutional investors with regulated products heats up.

SEC vs Ripple

In addition to filling of BTC ETFs, the crypto sector also received a boost after Ripple’s partial court victory over the SEC. The ruling that SEC did not violate any security rules on selling XRP to retail investors sent BTC to fresh yearly highs boosting investor confidence in altcoins.

Meanwhile, the SEC is asking a Federal Judge to ignore parts of the ruling in its litigation with Ripple Labs. According to the SEC, a ruling that Ripple did not violate security laws on selling XRPs to retail investors creates an artificial distinction between retail and institutional investors. The agency has asked the federal judge to quash the ruling suggesting it is planning an appeal over the Ripple case.

Worldcoin Launch

Meanwhile, Worldcoin is the latest cryptocurrency to join the burgeoning segment. The project, founded by OpenAI CEO Sam Altman, offers a World ID, which only real humans can access. The ID can be used to tell the difference between real people and AI bots online at a time when many chatbots are producing human-like language online. The project already has 2 million users as it continues to scale operations to 35 cities in 20 countries.

US Companies Agree to AI Safeguards As Google Unveils New AI Tool for News Articles Generation

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MNN EDITOR
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Tech giants in the US are in agreement that safeguards are crucial to help protect the world as artificial intelligence becomes more sophisticated and humanlike. Consequently, Amazon, Anthropic, Google, Infection, Meta, Microsoft and OpenAI have agreed to put in place measures that will help manage the risks emanating from AI boom.

AI Regulation

The companies made their commitment in a meeting with US President Joe Biden as the race to curtail the threats of emerging technologies heats up. The commitment comes as the companies try to out do each other on the development of the most powerful tools and the next big thing around AI. The companies are increasingly working on tools that will enhance and accelerate the creation of text photos, music, video, and other content with minimal human input

The aggressive push has already prompted concerns that the AI tools could the be the source of propagating disinformation and fake news posing significant danger to the human race. Faced with the ever-growing risk of an AI powered tool that humans cannot control governments across the world have been trying to place legal and regulatory frameworks to control the technology

For instance, there has been calls for the testing of AI powered products for security risks and using watermarks as a way of curtailing some of the imminent risks. In addition, the companies agreed there is need to ensure people can spot AI generated content  by implementing watermarks. there are also calls to public report AI capabilities and limitations on a regular basis

On the other hand, the White House is yet to issue more clarification on how it intends to control the ability of China and other competitors from leveraging the new US artificial intelligence programs.  Reports indicate the administration intends to impose new restrictions on advanced semiconductor and restriction on export of large language models.

Google News Article Tool

Separately Google is reportedly testing a new artificial intelligence technology that will enhance the way media outlets produce news stories. Reports indicate that the tech giant has been pitching the new technology to media outlets including the New York Times, The Washington Post and the Wall Street Journal

The new tool dubbed Genesis will reportedly take in information from current events and generate news content. According to people familiar with the matter the AI powered tool will serves as a personal assistant for journalists by automating most of their tasks.

China To Restrict Germanium and Gallium Exports As US Plans Restrictions On Chinese Companies Access to Cloud Computing Services

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MNN EDITOR
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The battle for technological supremacy is heating up as the US, and China try to outdo each other. The latest salvo comes on China issuing restrictions on the exports of gallium and germanium. Starting August 1, Chinese companies will have to seek authorization to ship the two compounds by stipulating the importers and how they intend to use them.

China Metal Ban

Gallium is one of the soft silver metals used to produce compound semiconductor wafers for electronic circuits and light-emitting diodes. On the other hand, Germanium is used to manufacture fibre optics to transfer data and information.

The move is part of escalating tensions between Beijing and the USA as the two try to restrict access to crucial metals billed to be part of national security. The ban comes just days before US treasury Janet Yellen visits Beijing in a move that is likely to have little impact in easing tensions between the two nations.

While China insists the new policies do not target specific nations, its timing is highly suspicious. It’s been interpreted as a retaliatory move after the US issuing bans and restrictions on Chinese companies access to some US products and technologies. Part of the measure targets access to semiconductor chips crucial to the next industrial revolution.

US Cloud Computing Ban

Additionally, reports indicate that the Biden administration is planning to curb Chinese companies access to US cloud computing services. The new measure will mostly affect Amazon and Microsoft, some of the big players in providing cloud services. The tech giants will have to seek US government authorization to provide cloud computing services that want to leverage artificial intelligence technologies.

Reports indicate that the Department of Commerce is on course to implement the curbs on cloud computing technologies and services as part of the semiconductor export control policy. The curbs come on Beijing also imposed curbs on the export of gallium and Germanium, commonly used in producing semiconductors.

US Social network Ban

Separately a US Federal Judge has banned some government agencies and top government officials from communicating with social media networks on certain content. The restriction comes from a complaint raised by some GOP states on how the US government used social networks to combat disinformation at the height of COVID-19.

The new order mostly affects the Department of Health and Human Services, the National Institute of Allergy and Infectious Diseases, and the US Centers for Disease Control and Prevention. However, government agencies can still communicate with social networks to curb illegal activities or address security threats.

US Automakers Investing in Lithium Mines as Rio Tinto Invests $650M On Copper Production and US Takes China Head on Cobalt Malpractices

By
MNN EDITOR
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The race to secure sufficient lithium supplies needed to power the electric vehicle revolution is forcing automakers into the mining businesses. The companies are increasingly investing in mining companies with exposure to huge lithium reserves as they look to secure key supply lines for the important commodity.

Investing in Lithium Supplies

Billions of dollars have been pumped into mining companies with large lithium reserves in Chile, Argentina, Quebec, and Nevada. General Motors is one of the companies that has invested $650 million to secure Lithium supplies from Lithium Americas in Vancouver. Ford has also made strategic investments in Lithium miners, including Albemarle, based in Charlotte, North Carolina.

The investment drive is part of an effort to ensure exclusive access to lithium needed to build batteries for electric pickup trucks, sport utility vehicles, and sedans. The investment drive has been heightened by concerns that established mining companies don’t have enough lithium to supply the EV industry.

Therefore, the automakers are increasingly scrambling to lock up exclusive access to smaller mines. The push comes with its fair share of risks, including exposure to politically unstable countries and environmental concerns. In addition, the companies face the risk of paying far more for Lithium supplies now than they would pay in a few years’ time.

Rio Tinto Invest in Copper Production

On the other hand, Rio Tinto has confirmed an investment in the Lake City area as it looks to secure key Copper supplies highly needed to power electric vehicle production. The company has committed $498 million for underground development and infrastructure to enhance its operations in Kennecott operation in Utah.

Copper production in the area is expected to start next year and ramp up over two years, with plans to produce up to 250,000 metric tons over the next 10 years. Demand for Copper is rising amid its use in clean energy technologies, especially in electric vehicles.

Fight Over Chinese Cobalt

Meanwhile, US lawmakers are working on a new bill that will prohibit companies from dealing in imported products containing minerals mined through child labor and other abusive conditions. The bill mostly targets Chinese products, given that China has enormous stakes in the Congo area, where child labor in mines is prevalent.

While Congo is the world’s largest producer of Cobalt, a key mineral used to make Lithium-ion batteries for electric batteries, there have been concerns over how the mineral is mined. Claims of forced labor and children’s exploits have been rampant.

The bill comes amid strained relations between the US and China, with tensions getting out of hand on President Joe Biden referring to the Chinese President Xi Jin Ping as a Dictator. Given that China controls the majority of Cobalt mines in areas where children are exploited, the bill could have serious ramifications for Chinese products.

US Equity Rally To Continue in Second Half As Oil and Gas Prices Tank and US Home Prices Spike

By
MNN EDITOR
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Investors have every reason to be bullish about US equities heading into the year’s second half. After a solid start to the new year, the S&P 500 is already up by more than 13%, with tech-heavy Nasdaq up by more than 30%.  If history is anything to go by, the impressive run is expected to continue in the year’s second half.

US Equities Rally

In previous years when the S&P 500 finished the first half of the year up by more than 10%, it averaged more than 8% in returns in the second half of the year. An 82%-win ratio signals that there is every reason to be bullish in the second half.

However, for the market to continue its impressive run, it must circumvent many challenges. The high-interest rate environment poses a significant danger of affecting growth rates, something that could plunge the economy into recession and rattle investors’ sentiments.

Nevertheless, the Federal Reserve going slow on further interest rate hikes is one catalyst that should continue supporting the equity markets. Expectations that the FED will embark on interest rate cuts have helped bolster sentiments in the US equity markets.

Oil and Natural Gas Under Pressure

Meanwhile, oil and natural gas prices are yet again under pressure after spiking briefly on Monday as markets reacted to the insurrection in Russia. The Wagner group mercenaries threatening to March to Moscow threatened an armed insurrection.  Concerns that a civil war in Russia, one of the biggest producers, will affect supply lines amid high demand triggered a frenzy in the market leading to a significant spike.

The short-lived event coming to an end has brought a lot of sanity and clarity to the oil markets resulting in a pullback in prices. However, with the geopolitical instability in Russia still in play, there is still a high likelihood of prices rising. While Russia’s gas exports to Europe have fallen significantly since its full-scale invasion of Ukraine, they are still high as the country meets 15% of EU demand.

US Home Price Debacle

Meanwhile, in the US, homebuyers need help finding the right properties to buy. A limited supply of properties is driving prices higher nationwide. In addition, fraudulent claims for the Covid era Pay Check Protection Program or PPP also have a hand in driving higher prices.

The PPP program resulted in the distribution of more than $793 billion into the economy. The injection of such an amount has left more people with a significant amount of money that they can use to purchase properties. The result has been a spike in demand amid low supply, fueling a spike in prices.

Cryptocurrencies Rally As Supreme Court Sides with Coinbase and SEC Approves Bitcoin ETFs

By
MNN EDITOR
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Cryptocurrencies exploded, with Bitcoin leading the move higher after the US supreme court ruled in favor of the sector in its first-ever opinion of the embattled sector; the ruling was in response to Coinbase being sued in a class action lawsuit that alleged the exchange did not provide proper relief after users lost money and for allegedly engaging in deceptive advertising.

Supreme Court Coinbase Ruling

Coinbase succeeded in convincing the highest court on the land to dismiss the lawsuit on the basis that users signed an agreement upon creating their accounts that state disputes should be handled through arbitration and not in court. Following the ruling other California courts handling similar cases will have to kick the cases into arbitration.

Arbitration is less costly for cryptocurrency companies than arguing such cases through courts. However, it is still unclear whether the latest ruling will affect the Securities and Exchange Commission’s ongoing case against the exchange.

Bitcoin ETFs Push

In addition to the positive ruling, cryptocurrencies are also holding steady above critical levels amid reports that several financial institutions are considering launching crypto-related exchange-traded funds ETFs. The US securities regulator approving the first leveraged Bitcoin futures ETFs is the catalyst behind renewed interest in digital assets.

The US Securities and Exchange Commission has already approved the nation’s first Bitcoin ETF offered by Volatility Shares. The ETF is to start trading on June 27 on the CBOE BZX Exchange, a move that would affirm crypto acceptance in the mainstream sector.

However, the ETF will not invest directly in Bitcoin but will seek to benefit from Bitcoin futures contracts for a single day. In addition, it will correspond to two times the return of the S&P CME Futures Daily Roll Index.

BlackRock and Wisdom Tree are other high-profile institutions that have already filed applications with the SEC for spot Bitcoin ETFs. Increased institution interest is the catalyst fueling demand for cryptocurrencies triggering a significant price spike.

CBDC Growing Popularity

Meanwhile, interest in central bank digital currencies is growing in Latin America and the Caribbean. The growing demand comes from the countries making impressive strides in their introduction to enhance financial inclusion and payment systems.

Bahamas is one of the countries that pioneered the CBDC push with the Sand Dollar, with Jamaica following suit; Brazil’s CBDC is also in the advanced proof of Concept stage. Increased demand for CBDC and other digital assets is down to a strong belief they offer protection against uncertain domestic macroeconomics and improved financial inclusion. They also help circumvent capital controls.

AI to Push US Equities Higher As Senate Debates AI Legislations and GoDaddy Unveils New AI Tool

By
MNN EDITOR
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Artificial Intelligence will remain a key driver of the US equity market for the foreseeable future. That’s the sentiments many wall street strategists hold in the aftermath of tech-heavy Nasdaq rallying by more than 30% year to date. Likewise, the S&P 500 is up by more than 10% for the year, attributed to investors betting big on tech plays with exposure to revolutionary technology.

AI Driven Equity Rally

Similarly, analysts at Capital Economics have raised their forecast for the S&P 500 to 5,500 from 4,500 for 2024 and to 6000 by 2025. According to the analysts growing interest in stocks with exposure to AI will be the catalyst in pushing US equities higher.

Joining the bullish consensus are strategists at Bank of America and RBC, that remain confident AI will boost returns in the equity markets, raising the S&P 500 targets. On the other hand, analysts at Goldman Sachs believe the S&P 500 remains undervalued due to artificial Intelligence.

While widespread AI adoption is expected to occur in 10 years, it is expected to lift the real GDP growth by 1.1%. Likewise, earnings per share over the next 20 years will be 11% greater than the current assumption and would be 9% higher than current levels owing to AI impact.

Some of the companies at the heart of the AI revolution include Nvidia, which delivered record-breaking quarterly results in Q1. AI is also fueling search wars between Microsoft and Google, seen as other players offering solid exposure.

AI Legislation Push

Amid the increased focus on AI, there are growing calls to regulate innovation around revolutionary technology. Senate majority leader Chuck Schumer has already unveiled a framework for AI legislation. The framework builds on an earlier announcement that seeks to develop federal regulations for the technology.

Schumer expects the new legislation to help secure the US national’s security and American jobs. It should also support the development of responsible systems in copyright intellectual property and misinformation.

GoDaddy AI Tool

Meanwhile, GoDaddy has unveiled a new AI generative tool that will save small businesses time writing content for their website. Thanks to the new tool, people can now answer a few questions in conversational language and have a website built with relevant content.

The tool will make it easy for business owners to develop relevant content for sections like About Us, Frequently Asked Questions, and Review. Additionally, business owners can update existing web pages more frequently without spending too much time writing original content.

Indian iPhone Exports Explode as Rivian Turns to Tesla Chargers and Gannet Co Sues Google over Online Ad Monopoly

By
MNN EDITOR
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India is slowly becoming an important production hub for US technology companies. Apple, which has been moving its supply chain from China, is already reaping the rewards, with iPhone exports hitting record highs of $1.2 billion in May. iPhones now account for more than 80% of India’s smartphone exports.

Indian iPhone Exports Surge

Indian officials have started wooing more US companies to set up production chains in the country in the wake of smartphone exports from the country powering through the $1.4 billion barrier in May. Likewise, smartphone exports in the first two months of the year more than doubled to $2.44 billion, up from $1.1 billion in the same period last year.

Record iPhone exports in April and May affirm Apple’s bid to establish India as a key production hub away from China. Indian Officials are now looking to persuade the likes of Tesla to also start producing electric vehicles in the country and other emerging technologies.

Rivian Adopts Tesla Chargers

Meanwhile, Rivian is the latest company to join Ford and General Motors in using Tesla chargers. Backed by Amazon, the truck and SUV company says it will adopt Tesla’s North American Charging Standard (NACS) for its R1T pickup and R1S SUV

Starting next year, Rivian owners can use their adapter to access Tesla’s supercharger network. Consequently, they can use the roughly 12,000 fast charging stations in the US and Canada.

For the longest time, Tesla’s charging systems have only been usable on Tesla cars. Last year CEO Elon Musk confirmed that they were inviting other automakers and charging companies to use the company’s systems. Ford and GM were the first to make the switch and take advantage of the EV fast charging stream.

More companies using the Tesla charging system could be a big win for the EV giant. For starters, it could allow the company to access federal refunds to support charging infrastructure across the country.

Gannet Co Sues Google

Separately, Gannet Co has sued Google, alleging the tech giant has consistently violated antitrust laws by monopolizing the market for online advertising. The largest US newspaper chain with more than 200-day newspapers alleges it continues to suffer because Google and its parent, Alphabet, monopolize tools for buying and selling online ads.

In a complaint filed in a federal court in Manhattan, Gannet says it’s been forced to sell more ad space to Google at highly depressed prices. The move has significantly reduced the company’s revenues for publishers and other ad tech rivals. The company is seeking unspecified damages.

The lawsuit comes on the heels of the U Department of Justice filing a lawsuit against Google over its advertising technology. In Canada, the federal government is plotting a law that will force tech giants like Google to support a fund that will help subsidize legacy media outlets.

US Eyes UK critical Minerals Deal AS Forest Fires Disrupts Canada Mining and Townsquare Capital LLC Increases Stake in Agnico Eagle Mines

By
MNN EDITOR
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The United States is in talks with the United Kingdom to ensure companies in the two countries have access to critical minerals. The negotiations as part of the Inflation Reduction Act seek to ensure automakers, tech, and energy companies have access to crucial minerals that they can use to roll out carbon-cutting products.

Inflation Reduction Act

President Joe Biden’s administration seeks to make it easier for U.K. businesses to benefit from the incentives under the Inflation Reduction Act.   The Inflation Reduction Act passed last year seeks to accelerate U.S. production of clean energy technology. Automakers would be some of the biggest beneficiaries as they would qualify for incentives needed to accelerate the electric vehicle revolution.

Currently, the U.S. shares formal free trade agreements with Australia, Canada and South Korea as it also looks to add the U.K.   The U.K. presently transports E.V. battery minerals to the U.S. and would be well-positioned to benefit from a new deal.

Canada Fire Disrupts Mining

Meanwhile, several mining companies in eastern Canada have been forced to halt mining operations amid the unprecedented wildfire rage. Iron Ore owned by Rio Tinto Group is contemplating idling operations due to fire and smoke hazards.

Hecla Mining has suspended operations at the Cas Berardi gold mine as Canada faces its worst-ever wildfire season. Gold producer Agnico Mine has also had to suspend operations. Walbridge Mining Co was forced to evacuate its camp at the Fenelon Gold project, and Osisko Mining also withdrew its staff at the windfall gold project. Over 3.3 million hectares of forest have already been burned, with smoke drifting south to New York, Toronto and Ottawa.

Townsquare Capital – Agnico Eagles Mines Deal

On the other hand, Townsquare Capital LLC has increased its position in Agnico Eagles Mines limited by 48.4%. The company now owns 119,863 shares of the old exploration and production company valued at $6.2 million. With the increase, the company increases its exposure to the LaRonde Mine, Goldex Mine and the Kittila Mine.

Separately Santacruz Silver Mining delivered solid first-quarter 2023 earnings, with its adjusted EBITDA increasing 335% to $12.6 million. Revenue in the quarter was up 2% quarter over quarter to $65.4 million as the company processed 482,497 tons of material and maintained production levels in line with the previous quarter.

US Equities on Edge on Service Sector Slowdown As SEC Takes on Binance And Neuralink Valuation Doubles

By
MNN EDITOR
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US equity markets remain on edge amid weaker-than-expected economic data compounded by uncertainty over the Federal Reserve’s next course of action. Equities turned south on Monday as softer US ISM data raised concerns about the US economy’s health. The Institute for Supply Management said the non-manufacturing PMI fell to 50.3 in May from 51.9 in April.

Equities Drop Crude Rises

The decline indicates growth in the overall service sector slowed, all but fueling recession concerns. The services sector had benefited from consumers shifting spending from goods at the height of the pandemic to social activities. Now it appears the sector is also feeling the heat amid heightened inflation levels.

The S&P 500 fell 0.20%, failing to enter into a bull market following the reversal. The Dow Jones industrial average was also under pressure dropping 0.59%.   On the other hand, Treasury yields that have been rising lost some steam after the gauge of US services showed a less upbeat tone

Meanwhile, crude prices edged higher after Saudi Arabia indicated it would slash its oil output by another 1 million barrels per day starting in July. It is still being determined whether prices will continue rising as Saudi Arabia is the only one cutting with the Organization of the Petroleum Exporting Countries agreeing to stick to their current production.

Binance Regulatory Woes

Digital assets remain under pressure in the cryptocurrency sector, with Bitcoin struggling to find support above $26,000 as Ethereum remains subdued below $1900. The underperformance comes amid soaring regulatory scrutiny, with Binance woes getting out of hand.

The US Securities and Exchange Commission has accused the exchange of mishandling funds and lying to regulators. According to the agency, the exchange mixed billions of dollars of customers’ funds and sent them to a company owned and controlled by the founder Changpeng Zhao. It is the second time that regulators in the US have accused the exchange of evading laws designed to protect US investors.

Neuralink Milestone

Separately, Elon Musk’s brain implant startup Neuralink has seen its valuation more than double to $5 billion despite having a long road to market. Investments in recent months to the startup have boosted the valuation on the heels of US regulators approving a human trial on its brain chip. However, experts have warned that it could take several years for Neuralink to secure commercial use clearance.

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