US becomes largest bitcoin mining center after China crackdown: Market wrap

US becomes largest bitcoin mining center after China crackdown: Market wrap
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Updated 13 October 2021

US becomes largest bitcoin mining center after China crackdown: Market wrap

US becomes largest bitcoin mining center after China crackdown: Market wrap

RIYADH: The US has overtaken China to account for the largest share of bitcoin mining in the world, according to data released by Britain’s Cambridge Center for Alternative Finance on Wednesday.

China’s share of the power of computers connected to the global bitcoin network, known as the “hash rate,” had fallen to zero by July from 44 percent in May, and from as much as 75 percent in 2019, the data showed.

Miners elsewhere have taken up the slack, with mining rig manufacturers shifting their attention to North America and Central Asia, and larger Chinese miners moving as well, though this process is fraught with logistical difficulties.

As a result, the US now accounts for the largest share of mining, some 35.4 percent of the global hash rate as of the end of August, followed by Kazakhstan and Russia.

Use of Chinese yuan

Binance, one of the world’s largest exchange by trading volumes, will stop the use of the Chinese yuan on its peer-to-peer trading platform, the latest move by major global cryptocurrency exchanges to cut their ties with mainland Chinese investors following an intense crackdown on the sector.

It will remove the Chinese yuan section of its consumer-to-consumer platform on Dec. 31 this year, and mainland Chinese users will have their accounts switched to “withdraw only mode,” Binance said in a statement.

Binance’s origins lie in China, though it emphasized in a statement that it withdrew from mainland China in 2017, the time of a previous regulatory crackdown.

Also on Wednesday, OKEX, another major cryptocurrency exchange with its origins in China said in a statement it had shifted its core business to international markets since 2017 and stopped promoting and providing services to the mainland China market.

Regulation

Regulators need to work quickly to put in place a set of rules for cryptocurrencies, given the sector’s rapid growth and the time it takes to agree on new standards, Bank of England Deputy Gov. Jon Cunliffe said on Wednesday.

“Regulators internationally and in many jurisdictions have begun the work. It needs to be pursued as a matter of urgency,” Cunliffe said in a speech at the SIBOS conference.

Last week, global regulators suggested that the safeguards they apply systemic clearing houses and payment systems should also be applied to stablecoins.

“It took two years to draft this measure, during which stablecoins have grown 16-fold,” Cunliffe said.  

 

Trading

Bitcoin fell by 2.04 percent to $55,698.90 at 5:41 p.m. Riyadh time on Wednesday while Ether traded at $3,492.32, down by 0.44 percent, according to data from CoinDesk.

“Current market cap of Bitcoin reaches 1 trillion once again, while approaching $55,000 and more,” Abdullah Mashat, managing director of a private Saudi retail company, told Arab News.

“Price movement showed again exceeding 50 percent in the past 3 months following recovery from the mining ban in China which affected more than two-third of the Bitcoin network,” he said.

 

 

 

 


Saudi economy to grow strongly in the fourth quarter, to rise 7.3 percent in 2022: Capital Economics 

Saudi economy to grow strongly in the fourth quarter, to rise 7.3 percent in 2022: Capital Economics 
Updated 12 sec ago

Saudi economy to grow strongly in the fourth quarter, to rise 7.3 percent in 2022: Capital Economics 

Saudi economy to grow strongly in the fourth quarter, to rise 7.3 percent in 2022: Capital Economics 

Saudi Arabia is set to experience strong economic growth in the fourth quarter of 2021, thanks to oil production hitting its highest level since April 2020, according to a report from Capital Economics.

Some 9.76 million barrels per day were produced in October, broadly in line with pre-virus levels of output, analysts at the London-based economic consultancy firm said. 

Although the whole economy Purchase Manager Index did edge down to 57.7 points in October, there seems to have been a broad-based rise in output from all sectors in the third quarter, which is likely to extend into the fourth quarter.

Growth in local deliveries of cement – a proxy for construction activity – picked up in October.

October point of sales transactions data were also very strong, although this appears to have eased a touch in early November.

“Overall, we think that the Saudi economy will have expanded by 2.5 percent over this year as a whole," the report said. 

Growth is expected to accelerate to 7.3 percent in 2022 as oil production is set to increase under an agreement reached by the The Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+.

This growth is much stronger than the consensus currently anticipates, Capital Economics analysts noted in the report.


Brazilian Nubank downsizes IPO price range

Brazilian Nubank downsizes IPO price range
Updated 14 min 57 sec ago

Brazilian Nubank downsizes IPO price range

Brazilian Nubank downsizes IPO price range

Brazil-based fintech Nubank has cut its valuation target by about $9 billion in its planned initial public offering in New York.

The cut brings their market capitalization to about $41.5 billion, down from the previously expected $50 billion plus, the Financial Times reported. 

The digital lender is planning to sell 289.2 million shares at $8 to 9$ each, down from an earlier bracket of $10 to $11.

The decision of lowering the price came as global equities are concerned over the new omicron variant. 

Despite the lowered valuation, Nubank would still be ahead of the most valuable digital bank in the world, European fintech Revolut, valued at $33 billion — and more than its largest Brazilian rival, Itau Unibanco, priced at $37.5 billion. 

Founded in 2013, Nubank is expected to rank among the top ten US flotations. 

Having more than 48 million users across Brazil, Mexico and Colombia, it started by offering zero-free credit cards and then moved into saving accounts, personal loans, investments and insurance. 


Turkey appoints a new finance minister amid plunge in currency

Turkey appoints a new finance minister amid plunge in currency
Updated 03 December 2021

Turkey appoints a new finance minister amid plunge in currency

Turkey appoints a new finance minister amid plunge in currency
  • Plummeting to record lows against foreign exchanges, Turkey’s beleaguered lira has lost about 45% of its value so far this year, toppling household savings

ANKARA: In an overnight decision on Dec. 2, Turkish President Recep Tayyip Erdogan appointed Nureddin Nebati as the country’s new minister of treasury and finance in place of Lutfi Elvan, adopting orthodox policy rather than monetary easing.

Elvan, having disagreed with Erdogan over the decrease of interest rates, reportedly stepped down from the post voluntarily. He was a figure acclaimed by market players despite fluctuations in the country’s economic management.

How the new minister, known as a loyalist, will be received by investors remains to be seen.

Plummeting to record lows against foreign exchanges, Turkey’s beleaguered lira has lost about 45 percent of its value so far this year, toppling household savings.

On Nov. 30, the lira plunged as low as 14 to the US dollar, and hit 15 to the euro, rendering it the worst performing currency of all emerging markets. The Central Bank of Turkey quickly intervened by selling substantial amounts of foreign exchange reserves to prop up the lira, Bloomberg reported.

Nebati, who served three years as a deputy finance minister before taking on this role, became the country’s third finance minister in just over a year.

He is known as a bureaucrat and a former businessman close to Erdogan, and he ardently supports keeping rates low in the face of soaring inflation, as they both believe that high interest rates result in high inflation.

However, according to Wolfango Piccoli, co-president of Teneo Intelligence in London, the appointment is expected to pave the way toward considerable spending in the months ahead to boost the government’s ratings ahead of the 2023 elections.

“Fiscal discipline, which has traditionally differentiated Turkey from most emerging markets, is soon likely to become history,” he told Arab News.

Experts anticipate that the economy could be accelerated through cheap credits.

Piccoli believes that the government will announce two support programs to prop up exports and the job market, along with additional initiatives to be disclosed in the months ahead in order to consolidate the government’s position.

“It is likely that the government can use its funds to provide loans to businesses as well,” he added.

The new minister, coming from a political science background in academia, took part in the youth organizations affiliated with Erdogan’s Justice and Development Party, or AKP.

“My God, make it easy, do not make it difficult. My God, make its outcome useful. Give us truth in our work, make us successful,” Nebati tweeted upon his appointment.

Before becoming a AKP lawmaker between 2011-2018, he was also an active figure on the board of the pro-government Islamist business association, MUSIAD. He is also known as a figure very close to Erdogan’s son-in-law, Berat Albayrak.

“In the recent past, former minister Lutfi Elvan had hinted that improvements in the current account balance should be handled with structural changes in the production structure rather than with rate cuts,” said Selva Demiralp, a professor of economics at Koc University in Istanbul, and a former economist at the Federal Reserve.

“Meanwhile, the government insists on the argument that rate cuts will be used as a way to stimulate exports and reduce imports. With the appointment of the new minister, it looks like there will be better coordination between monetary and fiscal policy in keeping interest rates low,” she told Arab News.

In a recent interview wtih state-run broadcaster TRT, Erdogan said that more interest rate changes should be expected in the coming period and Turkey would turn a surplus in 2022, while he warned that there is no “turning back” from the new policy path.

“In this way, there will be an improvement in exchange rates ahead of the elections,” he said.

According to the latest official data on Tuesday, the Turkish economy grew by 7.4 percent year-on-year in the third quarter, thanks to exports, manufacturing and retail demand.

In another speech to Parliament last month, Erdogan hinted at a forthcoming change of finance minister, saying “I’m sorry to our friends who defend (high) interests but I cannot and will not walk the same path as them.”

Elvan was the only one who did not join the crowd in applauding these remarks.

According to economist Demiralp, more rate cuts will push deposit rates further into negative territory, which may bring another wave of dollarization and increase the pressures on the lira.

“Thus, it would limit the banks’ ability to transmit further rate cuts into their borrowing and lending rates. When the monetary transmission mechanism comes to a halt, the government may reconsider its easing cycle,” she said.

On Thursday, the central bank governor met with domestic and international investors and economists via videoconference.

Since September, the central bank has cut rates by 400 basis points to 15 percent against inflation that reached about 20 percent.

The recent steps taken by Ankara to mend ties with its previous regional competitors are also seen as part of a larger attempt to reap economic gains and attract investments from such overtures.


Saudi Arabia showcases NEOM in its first roadshow in London 

Saudi Arabia showcases NEOM in its first roadshow in London 
Updated 02 December 2021

Saudi Arabia showcases NEOM in its first roadshow in London 

Saudi Arabia showcases NEOM in its first roadshow in London 

Saudi Arabia’s smart city NEOM has hosted its first UK roadshow event in London to promote investment opportunities.

It was attended by over 250 leaders from the country’s business, financial, environmental and political circles,

Launched by Saudi’s ambassador to the UK, the Discover NEOM event included presentations, panels and an exhibition of NEOM in film and images, paving the way to direct meetings with the project’s CEO and industry leaders.

Khalid bin Bandar Al-Saud has praised the Kingdom’s progress over the last five years in diversifying its economy, as non-oil revenues increased by 222 percent. 

“NEOM is a global hub for innovation and an accelerator for growth,” he said, reiterating the city’s role as the cornerstone of Vision 2030. 

Al-Saud has also welcomed numerous UK companies and international talents who already contribute to making the ambitious dream a reality. 

Baroness Helena Morrissey joins NEOM CEO Nadhmi Al-Naser to discuss the project

NEOM’s CEO Nadhmi Al-Naser reiterated that “NEOM is very much open for business,” referring to the recent establishment of OXAGON.

The world’s largest floating industrial complex, located on the Red Sea close to the Suez Canal OXAGON is to establish a fully integrated port and supply chain ecosystem for NEOM, as announced last November.

NEOM, as announced in 2017, is the Kingdom’s Vision 2030 flagship project, led by Prince Mohammad bin Salman to act like an engine for the country’s economy. 

The $500 billion project is described as the world’s first “cognitive and smart city." 

The vast sustainable development covers 10,000 square miles of Tabuk province in north-west Saudi Arabia.

It includes a 170-kilometre long linear city known as The Line, planned to have one million citizens, preserving 95 percent of the nature within NEOM. 

The city of NEOM has also signed a deal with the German-based Volocopter to develop the world's first bespoke public transport development, enabling an open electric vertical take-off and landing ecosystem for vertical mobility services, known as eVTOL.

The deal demonstrates NEOM as an ideal region to rapidly implement urban air mobility and create a fully integrated vertical mobility ecosystem, the CEO of NEOM said. 

Lord Ed Vaizey, who participated in one of the panels, welcomed NEOM’s financial and technological ambitions across its 14 sectors, and said: “Digital technology is close to my heart, and it was energizing to hear of NEOM’s plans for technology as it builds its cognitive cities.

"The plans for financial services are also dramatic and new, which will have far-reaching affects around the world, but most importantly help to create a more inclusive society in Saudi Arabia, one of the key Vision 2030 goals.”


Oil down $2 a barrel after OPEC+ sticks to planned output rise

Oil down $2 a barrel after OPEC+ sticks to planned output rise
Updated 03 December 2021

Oil down $2 a barrel after OPEC+ sticks to planned output rise

Oil down $2 a barrel after OPEC+ sticks to planned output rise

US and Brent Crude oil dropped $2 a barrel after sources claimed OPEC+ has decided to stick to its planned January output rise of 400,000 per day, Reuters is reporting.

At a meeting held via videoconference on the Thursday, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, resisted US requests for speedier increases in oil output to support the global economy.

However, the meeting remains “in session”, according to a press release issued on Thursday afternoon, meaning the group could revist the decision before the next scheduled meeting on Jan. 4.

Producers have said they did not want to hamper a fragile energy industry recovery with oversupply.

Under its existing pact, OPEC+ agreed to raise output by 400,000 barrels per day (bpd) each month, winding down record cuts agreed in 2020 when demand crashed because of the pandemic.

Thursday's meeting comes a week after the United States and other major consumers announced they would release emergency crude reserves to temper energy prices.

US President Joe Biden’s administration could adjust the timing of any release if prices dropped substantially, US Deputy Energy Secretary David Turk told Reuters on Wednesday.

OPEC+ forecast a 3 million bpd surplus in the first quarter of 2022 after the release of reserves, up from a 2.3 million bpd surplus previously forecast.