Europe attracts half of funds raised in coin offerings

The value of bitcoin has soared by 1,000 percent since the start of the year, despite a sharp fall yesterday. (Reuters)
Updated 01 December 2017
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Europe attracts half of funds raised in coin offerings

LONDON: Nearly half of the cash that has poured into newly issued cryptocurrencies in recent years has been raised in Europe, research published on Thursday showed.
The report by Atomico, one of Europe’s leading venture capital firms, found European-based entities have raised $1.76 billion through so-called initial coin offerings, or ICOs, since 2014, representing 46 percent of funds raised globally.
ICOs have become a bonanza for digital currency entrepreneurs. They have provided the fuel for a rapid ascent in the value of cryptocurrencies this year that has raised fears of a bubble that could burst, with bitcoin soaring more than 1,000 percent since the start of 2017.
Atomico’s research is based on data compiled by California-based TokenData and stretches back to 2014, although more than 90 percent of ICO activity has taken place this year, researcher Ricky Tan said.
Switzerland drew in nearly half of Europe’s total — $828 million or 47 percent of ICO funds in the region, mainly through firms registered in Zug, a low-tax region near Zurich that is also the domicile for many top commodities traders, Tan said.
By contrast, North America drew in $1.08 billion of ICOs, or 28 percent of a global market that raised around $3.8 billion through the issuance of new types of digital currency.
The report predicts that larger European venture firms will begin to participate in ICOs next year, reversing their historic resistance to what many have seen as unregulated competition to traditional venture funding.
Already, top-tier US venture capital firms such as Andreesen Horowitz and Union Square Ventures have actively invested in ICO fundraisings, along with some newer European funds such as Blueyard Capital of Berlin.
“But the region’s most established funds have yet to participate,” the Atomico report states. “This will change in 2018.”
ICOs function as an alternative to traditional, regulated means of fundraising through public stock market flotations or private investments by venture capitalists or other investors.
The new fundraising mechanism has flourished in unregulated markets where investment capital is scarce. China and South Korea have banned digital coin sales, while the US Securities and Exchange Commission is weighing up tougher rules.
Switzerland, along with Germany and Austria dwarf other parts of Europe with $976 million raised in terms of capital — three times the funding ICOs attracted in Central and Eastern Europe and four times greater than Britain and Ireland.
But when it comes to the number of ICO projects launched, Central and Eastern Europe are way ahead with 162 of the rest of the region, followed by 90 projects in Britain and Ireland.
 


Saudi energy minister recommends driving down oil inventories, says supply plentiful

Updated 19 May 2019
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Saudi energy minister recommends driving down oil inventories, says supply plentiful

  • Oil supplies were sufficient and stockpiles were still rising despite massive output drops from Iran and Venezuela
  • Producer nations discussed how to stabilise a volatile oil market amid rising US-Iran tensions in the Gulf, which threaten to disrupt global supply

JEDDAH: Saudi Arabia’s Energy Minister Khalid Al-Falih said on Sunday he recommended “gently” driving oil inventories down at a time of plentiful global supplies and that OPEC would not make hasty decisions about output ahead of a June meeting.
“Overall, the market is in a delicate situation,” Falih told reporters before a ministerial panel meeting of top OPEC and non-OPEC oil producers, including Saudi Arabia and Russia.
While there is concern about supply disruptions, inventories are rising and the market should see a “comfortable supply situation in the weeks and months to come,” he said.
The Organization of the Petroleum Exporting Countries, of which Saudi Arabia is de facto leader, would have more data at its next meeting in late June to help it reach the best decision on output, Falih said.
“It is critical that we don’t make hasty decisions – given the conflicting data, the complexity involved, and the evolving situation,” he said, describing the outlook as “quite foggy” due in part to a trade dispute between the United States and China.
“But I want to assure you that our group has always done the right thing in the interests of both consumers and producers; and we will continue to do so,” he added.
OPEC, Russia and other non-OPEC producers, an alliance known as OPEC+, agreed to reduce output by 1.2 million barrels per day (bpd) from Jan. 1 for six months, a deal designed to stop inventories building up and weakening prices.
Russian Energy Minister Alexander Novak told reporters that different options were available for the output deal, including a rise in production in the second half of the year.
The energy minister of the United Arab Emirates, Suhail Al-Mazrouei, said oil producers were capable of filling any gap in the oil market and that relaxing supply cuts was not “the right decision.”
Mazrouei said the UAE did not want to see a rise in inventories that could lead to a price collapse and that OPEC would act wisely to maintain sustainable market balance.
“As UAE we see that the job is not done yet, there is still a period of time to look at the supply and demand and we don’t see any need to alter the agreement in the meantime,” he said.
US crude inventories rose unexpectedly last week to their highest since September 2017, while gasoline stockpiles decreased more than forecast, data from the government’s Energy Information Administration showed on Wednesday.
DELICATE BALANCE
Saudi Arabia sees no need to boost production quickly now, with oil at around $70 a barrel, as it fears a price crash and a build-up in inventories, OPEC sources said, adding that Russia wants to increase supply after June.
The United States, not a member of OPEC+ but a close ally of Riyadh, wants the group to boost output to bring oil prices down.
Falih has to find a delicate balance between keeping the oil market well supplied and prices high enough for Riyadh’s budget needs, while pleasing Moscow to ensure Russia remains in the OPEC+ pact, and being responsive to the concerns of the United States and the rest of OPEC+, the sources said earlier.
Sunday’s meeting of the ministerial panel, known as the JMMC, comes amid concerns of a tight market. Iran’s oil exports are likely to drop further in May and shipments from Venezuela could fall again in coming weeks due to US sanctions.
Oil contamination also forced Russia to halt flows along the Druzhba pipeline — a key conduit for crude into Eastern Europe and Germany — in April. The suspension, as yet of unclear duration, left refiners scrambling to find supplies.
Russia’s Novak told reporters that oil supplies to Poland via the pipeline would start on Monday.
OPEC’s agreed share of the cuts is 800,000 bpd, but its actual reduction is far larger due to the production losses in Iran and Venezuela. Both are under US sanctions and exempt from the voluntary reductions under the OPEC-led deal.
REGIONAL TENSIONS
Oil prices edged lower on Friday due to demand fears amid a standoff in Sino-US trade talks, but both benchmarks ended the week higher on rising concerns over disruptions in Middle East shipments due to US-Iran political tensions.
Tensions between Saudi Arabia and Iran are running high after last week’s attacks on two Saudi oil tankers off the UAE coast and another on Saudi oil facilities inside the Kingdom.
Riyadh accused Tehran of ordering the drone strikes on oil pumping stations, for which Yemen’s Iran-aligned Houthi militia claimed responsibility. 
Saudi Arabia’s minister of state for foreign affairs said on Sunday that the Kingdom wants to avert war in the region but stands ready to respond with “all strength” following the attacks.
“Although it has not affected our supplies, such acts of terrorism are deplorable,” Falih said. “They threaten uninterrupted supplies of energy to the world and put a global economy that is already facing headwinds at further risk.”
The attacks come as the United States and Iran spar over Washington’s tightening of sanctions aimed at cutting Iranian oil exports to zero, and an increased US military presence in the Gulf over perceived Iranian threats to US interests.