2024-01-10 22:30

Jan 10 (Reuters) - The U.S. Securities and Exchange Commission (SEC) on Wednesday approved exchange-traded funds (ETFs) that track the price of bitcoin in a game-changer for the cryptocurrency industry which has been trying for more than a decade to launch such a product. Multiple asset managers have applied for bitcoin ETFs since 2013, but the SEC rejected them on the grounds they would be vulnerable to market manipulation. In August, however, a court found the SEC was wrong to reject Grayscale Investments' bitcoin ETF application, forcing the agency to rethink its stance. On Wednesday, SEC approved applications from ARK Investments, BlackRock (BLK.N) and Fidelity, among others. Here is how the products work and why the approval is seen as a big deal: HOW WILL THE ETFS WORK? They will be listed on Nasdaq, NYSE and the CBOE. Their assets will comprise physical bitcoin purchased from crypto exchanges and held via custodians like Coinbase Global (COIN.O). The products track a bitcoin benchmark. Some track an index provided by CF Benchmarks, a subsidiary of crypto exchange Kraken, which aggregates trading data from multiple Bitcoin-USD markets operated by big cryptocurrency exchanges. To address the SEC's manipulation concerns, Nasdaq and CBOE have created a market surveillance mechanism with Coinbase, the largest U.S. cryptocurrency exchange. Issuers plan to charge fees ranging from 0.20% to 0.8%, well below the broader ETF market average. IS IT DIFFERENT TO BUYING BITCOIN OUTRIGHT? Yes. A spot bitcoin ETF allows investors to gain exposure to the price of bitcoin without the complications and risks of owning bitcoin directly. Those include setting up crypto wallets and accounts with crypto exchanges, some of which have poor cyber security records and are prone to hacks. The industry has also experienced a string of bankruptcies and scandals, including the implosion of crypto exchange FTX, whose founder Sam Bankman-Fried was found guilty of fraud. Other exchanges have been accused of flouting U.S. securities laws, while Binance, the world's largest crypto exchange, recently pleaded guilty to breaking U.S. anti-money laundering laws. All this continues to make many investors wary. In contrast, ETFs are listed on tightly-regulated stock exchanges and are therefore accessible through retail investors' existing brokerage accounts, which are also closely supervised. The ETF structure also boosts the accessibility of bitcoin for institutional investors, some of whom are barred from investing directly in alternative assets. WHY IS IT DIFFERENT TO EXISTING BITCOIN FUTURES ETFS? The SEC in 2021 approved bitcoin futures ETF, which track agreements to buy or sell bitcoin at a pre-agreed price. But those products don't track price movements precisely, and the cost of rolling over futures contracts can eat into returns, making them less desirable for many investors. AREN'T THERE SPOT BITCOIN ETFS IN CANADA AND EUROPE? Yes. But the United States is the world's largest capital market, home to some of the globe's largest asset managers and institutional investors. HOW MUCH WOULD A BITCOIN ETF REEL IN? It's unclear. The ProShares Bitcoin Strategy ETF (BITO.P), the first bitcoin futures ETF approved by the SEC in 2021, saw around $1 billion worth of shares trading hands on its first day, and some experts believe a spot bitcoin ETF could net three times that much on its first day. That figure could balloon to $55 billion over five years, some expert estimate. While bitcoin has gained 70% since the Grayscale ruling, analysts said it was unclear how much further it would rise, with some saying interest rates would play a bigger role. BUT IT'S NOT JUST ABOUT THE MONEY For the crypto industry, a spot bitcoin ETF is a big win, boosting the legitimacy of the cryptocurrency industry and pushing bitcoin further into the mainstream. It also comes amid a broader tug-of-war between the crypto industry and SEC, which has been cracking down on the sector. When it comes to this particular battle, the industry can claim victory. https://www.reuters.com/technology/why-us-bitcoin-etf-is-game-changer-crypto-2024-01-10/

2024-01-10 22:19

Jan 10 (Reuters) - One person was killed and another injured in an avalanche at the Palisades Tahoe ski resort in California on Wednesday, the Placer County Sheriff's office said. The sheriff's office in a written statement said there were "no further missing persons" reported in the avalanche that took place at the resort, located about 100 miles (161 kilometers)northeast of San Francisco. The sheriff's statement said the avalanche debris field is approximately 150 feet (45.7 meters) wide, 450 feet long and 10 feet deep. The office of Governor Gavin Newsom said on social media "the state is monitoring and standing by to assist" and state firefighters were moving rescuers and resources into the area. It was not immediately clear what triggered the avalanche, but heavy snows have been pounding the mountainous area for the past day. The Palisades Tahoe resort said on social media the avalanche took place on the Palisades side of its mountain at approximately 9:30 a.m. local time. "Our Patrol and mountain operations teams are performing a search at this time," the resort stated, adding both sides of its mountain were closed for the day. The resort, formerly known as Squaw Valley, opened in 1949 and is at Olympic Valley, California. The resort was the site of the 1960 Winter Olympics. https://www.reuters.com/world/us/avalanche-hits-california-ski-resort-not-yet-clear-if-people-trapped-2024-01-10/

2024-01-10 22:06

QUITO, Jan 10 (Reuters) - Ecuador's oil, mining and energy sectors were operating normally on Wednesday, the energy ministry said in a statement, despite a dramatic uptick in violence this week which saw more than 130 prison staff taken hostage, among other incidents. The violence has led President Daniel Noboa to declare crime gangs to be military targets, among other measures. Crude production was 492,343 barrels, the ministry said, with private producers accounting for 90,325 barrels. The SOTE pipeline and refineries were also operating normally, though some were having maintenance work done. Planned energy rationing has been suspended until Jan. 15, the statement added, because generation is at a necessary level. The government named a new head for state-run oil company Petroecuador in a separate statement. Sylvia Marcela Reinoso, who has a masters degree in energy governance and is a former official at the Latin American Energy Organization, will be the company's new leader, the public companies coordinator said in a statement. She replaces Eduardo Miranda, who resigned several days after being named interim head of the company. Noboa, who took office in November, has promised to boost the economy, create jobs and attract foreign investors and said on Wednesday that improving security is the best way to attract capital. https://www.reuters.com/markets/commodities/ecuador-says-oil-mining-energy-sectors-operating-normally-despite-violence-2024-01-10/

2024-01-10 21:55

PANAMA CITY, Jan 10 (Reuters) - The Panama unit of Canadian miner First Quantum Minerals said Wednesday that it will present to government officials the first phase of its mine preservation plan on Jan 16, according to a statement, after its project was ordered closed last year. The Cobre Panama project, one of the world's largest open-pit copper mines, was forced to shut down after Panama's top court ruled that its contract was unconstitutional, following nationwide protests opposed to its continued operation. The plan should "ensure physical and chemical stability related to mining facilities and environmental management," including personnel requirements, monitoring and evaluation tasks, according to the company statement. The company added that an interagency government commission will first conduct a technical inspection on Jan. 11, as part of the commerce and industry ministry's action plan for the mine's closure. Under best international practices, the orderly closures of such mining projects, including planning for and preparing methods to ensure the mine's environmental stability going forward, normally take years to complete, according to the company. https://www.reuters.com/markets/commodities/first-quantums-shut-panama-copper-mine-present-initial-preservation-plan-2024-01-10/

2024-01-10 21:55

Jan 10 (Reuters) - A recent dip in Apple's (AAPL.O) stock over worries about iPhone sales has left the Silicon Valley tech heavyweight in danger of being overtaken by Microsoft (MSFT.O) as the world's most valuable company. Fresh worries about smartphone demand have pushed Apple's shares down 4% so far in 2024 after rallying 48% last year. Microsoft is up about 2% year to date after surging 57% in 2023. Apple dipped 0.4% on Wednesday, while Microsoft added 1.6%, further eroding the iPhone maker's lead. Apple's stock market value is now at $2.866 trillion, compared to Microsoft's $2.837 trillion value. Apple's market capitalization peaked at $3.081 trillion on Dec. 14, while Microsoft's value reached as much as $2.844 trillion on Nov. 28. IPhone sales in China dropped 30% in the first week of 2024, Jefferies analysts said in a client note this week, adding to signs of growing competitive pressures from Huawei [RIC:RIC:HWT.UL] and other domestic rivals. Sales of Apple's Vision Pro mixed-reality headset start on Feb. 2 in the United States, marking Apple's biggest product launch since the iPhone in 2007. However, UBS in a report on Monday estimated that Vision Pro sales would be "relatively immaterial" to Apple's earnings per share in 2024. A handful of times since 2018, Microsoft has briefly taken the lead over Apple as the most valuable company, most recently in 2021, when concerns about supply chain shortages related to the COVID-19 pandemic hit the iPhone maker's stock price. Both tech stocks look relatively expensive in terms of price to their expected earnings, a common method of valuing publicly listed companies. Apple is trading at a forward PE of 28, well above its average of 19 over the past 10 years, according to LSEG data. Microsoft is trading around 31 times forward earnings, above its 10-year average of 24. In its most recent quarterly report in November, Apple gave a sales forecast for the holiday quarter that missed Wall Street expectations, hurt by weak demand for iPads and wearables. Analysts on average see Apple posting revenue up 0.7% to $117.9 billion for the December quarter, according to LSEG. That would mark its first year-on-year revenue increase in four quarters. Apple reports its results on Feb. 1. Analysts see Microsoft reporting a 16% increase in revenue to $61.1 billion, lifted by ongoing growth in its cloud business when it reports in the coming weeks. https://www.reuters.com/technology/microsoft-challenges-apple-worlds-most-valuable-company-2024-01-10/

2024-01-10 21:51

Jan 11 (Reuters) - A look at the day ahead in Asian markets. South Korea delivers its latest interest rate decision on Thursday with the main focus being policymakers' signal as to when the rate-cutting cycle begins, while Japanese stocks continue to ride the crest of an increasingly bullish wave. The latest figures for Thai consumer sentiment, Malaysian industrial production, Australian trade and Japan's foreign exchange reserves are also out on Thursday, ahead of the most significant event for global markets this week - U.S. inflation. Japanese markets, if not the rest of the region, are poised to open on a strong footing on Thursday after yet another solid performance on Wednesday. Japan's Nikkei 225 index surged to a fresh 34-year high above 34,000 points as investors ponder whether the Bank of Japan will 'normalize' policy as quickly or dramatically as they were anticipating. The BOJ had already begun scaling back its ultra-easy policy by effectively lifting the 'yield curve control', paving the way to phase it out completely and end seven years of negative interest rate policy later this year. But recent data suggest inflation is falling back towards the BOJ's 2% target and inflationary pressures are easing. If so, will the BOJ need to move so quickly, or even at all? The yen is weakening, making Japanese exports more competitive in the global marketplace and making it cheaper for overseas investors to buy Japanese assets. As a result, Japanese stocks are on a tear and outperforming their peers. The Nikkei is on course for its best week in three months and is up 3% this year, while the S&P 500 and MSCI World Index are essentially flat, the Euro STOXX 50 is down more than 1% and the MSCI Asia Pacific ex-Japan index is down 4%. Elsewhere in Asia on Thursday, attention shifts to Seoul and the Bank of Korea's latest policy decision. The BOK is widely expected to keep its key policy rate unchanged at 3.50% for an eighth consecutive meeting, but with inflation easing, speculation around when the BOK pivots is bound to intensify, especially with the Fed, ECB and other major central banks widely expected to start cutting rates soon. Inflation is currently 3.2%, above the central bank's 2% target but cooling once again, and the won is down around 2% against the dollar so far this year. BOK Governor Rhee Chang-yong said in a New Year speech the central bank would adopt a "policy mix" to bring down inflation and warned that keeping monetary policy restrictive for too long posed risks. Swaps markets currently point to a quarter-point rate cut by August and a strong probability of another by the end of the year. Here are key developments that could provide more direction to markets on Thursday: - South Korea interest rate decision - Australia trade (November) - Malaysia industrial production (November) https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-2024-01-10/