2024-01-10 21:05

WASHINGTON/NEW YORK, Jan 10 (Reuters) - The U.S. securities regulator on Wednesday approved the first U.S.-listed exchange traded funds (ETFs) to track bitcoin, in a watershed for the world's largest cryptocurrency and the broader crypto industry. The Securities and Exchange Commission said it approved 11 applications, including from BlackRock (BLK.N), Ark Investments/21Shares (ABTC.S), Fidelity, Invesco (IVZ.N) and VanEck, despite warnings from some officials and investor advocates that the products carried risks. Most of the products are expected to begin trading Thursday, issuers said, kicking off a fierce competition for market share. A decade in the making, the ETFs are a game-changer for bitcoin, offering investors exposure to the world's largest cryptocurrency without directly holding it. They provide a major boost for a crypto industry beset by scandals. "It's a huge positive for the institutionalization of bitcoin as an asset class," said Andrew Bond, managing director and senior fintech analyst at Rosenblatt Securities. Standard Chartered analysts this week said the ETFs could draw $50 billion to $100 billion this year alone. Other analysts have said inflows will be closer to $55 billion over five years. The market capitalization of bitcoin stood at more than $913 billion as of Wednesday, according to CoinGecko. As of December 2022, total net assets of U.S. ETFs stood at $6.5 trillion, according to the Investment Company Institute. Bitcoin was last up 3% at $47,300. The cryptocurrency has soared more than 70% in recent months in anticipation of an ETF, and hit its highest level since March 2022 this week. Success in the battle for inflows will mostly depend on fees and liquidity, analysts say. Some issuers slashed their proposed fees in new filings this week, including BlackRock and Ark/21Shares. Those fees range from 0.2% to 1.5%, with many firms offering to waive fees entirely for a certain period of time. For short-term speculators looking to buy in and out of the products, liquidity could be more important. Companies expect a flurry of online advertising and other marketing. Some issuers, including Bitwise and VanEck, have already released ads touting bitcoin as an investment. "It is pretty unprecedented, so we'll see how it works. I've never been in a situation where 10 of the same ETF was launched on the same day,” said Steven McClurg, chief investment officer at Valkyrie, whose ETF was among those approved on Wednesday. The approvals come a day after an unauthorized person published a fake post on the SEC’s account on social media platform X, saying the agency had approved the products for trading. The agency quickly disavowed and deleted the post. On Wednesday it said it is coordinating with law enforcement and the SEC's own internal watchdog to investigate the incident. That incident, and a confused announcement on Wednesday afternoon in which the SEC appeared to publish the formal regulatory approval and then remove it from its website, did not dampen the crypto industry celebrations. "We believed that bitcoin could change the world, and we were and remain excited at the prospect of democratizing access to this asset," said Grayscale CEO Michael Sonnenshein. Douglas Yones, head of exchange traded products at the New York Stock Exchange, where some products will be listed, said the approval was also a "milestone" for the ETF industry. Cynthia Lo Bessette, head of digital asset management at Fidelity, said the new products should provide "increased choice for investors who want to engage with" crypto. Some regulatory experts believe the bitcoin ETFs could also pave the way for other innovative crypto products. Several issuers, for example, have filed for ETFs tracking either, the second-largest cryptocurrency. "Once the dam has been breached, it’s going to be really hard for the SEC to continue its ‘just say no to crypto’ approach,” said Jim Angel, associate professor at Georgetown's McDonough School of Business. 'SPECULATIVE, VOLATILE' Cryptocurrencies were created as an alternative to fiat currencies -- currencies established by and backed by a government such as the U.S. dollar and the euro -- but cryptocurrencies are largely used as speculative investments due to their volatility. The green light marks a U-turn for the SEC, which had rejected bitcoin ETFs due to worries they could be easily manipulated. SEC Chair Gary Gensler is a fierce crypto skeptic. In a highly unusual move, however, Gensler, a Democrat, joined the SEC's two Republican commissioners in voting to approve the products, while the agency's two Democratic commissioners voted against. One, Caroline Crenshaw, cited investor protection worries. Hopes the SEC would finally approve bitcoin ETFs surged last year after a federal appeals court ruled that the agency was wrong to reject an application from Grayscale Investments to convert its existing Grayscale Bitcoin Trust into an ETF. In a statement on Wednesday, Gensler said that in light of the court ruling, approving the products was "the most sustainable path forward," but added the agency did not endorse bitcoin, calling it a "speculative, volatile asset" also used to fund crime. Gensler also repeated his long-held position that bitcoin is a commodity not a security, and as such, Wednesday's approval was in "no way" a signal that the SEC would be easing up on its crackdown on crypto players it says are flouting its laws. To meet the SEC's investor protection bar, severalexchanges had proposed working with Coinbase, the largest U.S. crypto exchange, to police trading in the underlying bitcoin market. But the issuers scrapped that partnership this week in favor of an existing arrangement with the Chicago Mercantile Exchange, which was at the core of Grayscale's court victory. The SEC is currently suing Coinbase for allegedly breaching U.S. securities laws, which the company denies. Dennis Kelleher, CEO of investor advocacy think tank Better Markets, warned that bitcoin was still vulnerable to crypto fraudsters and said approving the ETFs was a "historic mistake." "The SEC’s action today has changed nothing about this worthless financial product: bitcoin and crypto still have no legitimate use," he said. https://www.reuters.com/technology/us-sec-approves-some-spot-bitcoin-etfs-2024-01-10/

2024-01-10 20:53

Canadian dollar gains 0.1% against the greenback Trades in a range of 1.3366 to 1.3395 Price of U.S. oil settles 1.2% lower Canada-U.S. 10-year spread narrows 3.1 basis points TORONTO, Jan 10 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Wednesday but was holding near its weakest level since the middle of December as oil prices fell and investors awaited U.S. inflation data for clues on the Federal Reserve policy outlook. The loonie was trading 0.1% higher at 1.3375 to the greenback, or 74.77 U.S. cents, after moving in a range of 1.3366 to 1.3395. On Tuesday, the currency touched its weakest intraday level since Dec. 15 at 1.3414 as investors took stock of recent weakening in the domestic economy. "USD-CAD has traded in an extremely narrow range today as traders sit on their hands awaiting tomorrow's key U.S. CPI report for December," said Michael Goshko, senior market analyst at Convera Canada ULC. Federal Reserve Bank of New York President John Williams said that it's still too soon to call for interest rate cuts as the central bank still has some distance to go on getting inflation back to its 2% target. The price of oil , one of Canada's major exports, settled 1.2% lower at $71.37 a barrel after a surprise jump in U.S. crude stockpiles raised worries about demand in the largest oil market. Canadian government bond yields were higher across the curve. The 10-year was up 4.9 basis points at 3.273%, while the gap between it and the U.S. equivalent narrowed by 3.1 basis points to 76.2 basis points in favor of the U.S. note. https://www.reuters.com/markets/currencies/c-sticks-tight-range-ahead-us-inflation-data-2024-01-10/

2024-01-10 20:50

SANTIAGO, Jan 10 (Reuters) - A protest by several hundred people in northern Chile on Wednesday blocked access to the Atacama salt flat, the world's largest lithium deposit, where domestic producer SQM (SQMA.SN) and U.S. firm Albemarle (ALB.N) extract the metal. The demonstration, led by local indigenous groups after an agreement was signed last month between SQM and state-run copper firm Codelco, was affecting SQM operations, said a source with knowledge of the matter. SQM did not immediately comment. Albemarle in a statement said its operations "continue as usual," and that it was focused on employee safety. The protest underscores a serious challenge to a plan by Chile, the No. 2 lithium producer, to impose more state control over the metal needed for batteries used to power the world's growing electric vehicle fleet. Yermin Basques, head of the indigenous Toconao community, said local groups were blocking public roads that lead to mining operations in the south of the salt flat, preventing workers, supplies and lithium from entering or leaving. Basques said indigenous communities were sidelined in the negotiation between SQM and Codelco, which strengthens state control of lithium in line with the plan announced by President Gabriel Boric in April. "For us, there's no conversation. For us, it's just imposed," Basques said in an interview. About 500 protesters were blocking six different spots on public roads in the south of the salt flat, he said, and were demanding Boric include them in talks between SQM and the government. For much of last year, SQM and Codelco had been locked in talks over the future of lithium mining in the salt flat, home to 90% of Chile's lithium reserves. The country has the world's largest proven lithium reserves. The December agreement calls for SQM to partner with Codelco for future lithium development and production in the Atacama, beginning in 2025 and running through 2060. Basques, whose Toconao group is the largest in the Atacama Indigenous Council, said the government did not include the council in the agreement, despite recently announcing a dialogue table to discuss lithium mining in the Atacama. He said protesters plan to block access to the salt flat until Boric travels to talk to them and abide by the original agreement. "There has to be sensitivity, the respect that President Boric has always talked about," Basques said. "We invite him... to demonstrate what he has pledged." Chile's mining ministry said it was monitoring the protests but declined to comment further. https://www.reuters.com/world/americas/protest-chiles-lithium-salt-flats-snarls-roads-sqm-albemarle-2024-01-10/

2024-01-10 20:45

Jan 10 (Reuters) - Multiple issuers' spot bitcoin exchange-traded funds (ETFs) are slated to begin trading on Thursday, according to notices posted on CBOE's website on Wednesday. Among the ETFs listed for trading were Ark/21Shares Bitcoin ETF, Franklin Templeton Bitcoin ETF, WisdomTree Bitcoin Fund and Invesco/Galaxy Bitcoin ETF, according to filings. A spokesperson for CBOE said the exchange was still waiting for approval from the Securities and Exchange Commission (SEC) for the spot bitcoin ETFs. "The notices posted to our website are standard procedure in preparation of an ETF launch," the spokesperson said. The SEC did not immediately respond to a request for comment. Kyle Da Cruz, head of digital assets product at VanEck Investments, told Reuters that the firm has not yet been informed by the SEC that its ETF has been approved to trade on CBOE. He added that they expect to receive that approval later on Wednesday. The other issuers could not immediately be reached for comment. https://www.reuters.com/technology/multiple-spot-bitcoin-etfs-begin-trading-thursday-cboe-2024-01-10/

2024-01-10 20:43

Jan 10 (Reuters) - The U.S. East Coast remained under the threat of menacing weather on Wednesday as a powerful winter storm loomed across the region after leaving in its wake power outages, grounded flights and several towns swamped with flood waters. More than 50 million people from eastern Ohio up through the Mid-Atlantic and into the Northeast were under high wind and flooding advisories on Wednesday, the National Weather Service (NWS) said. Flooding swamped several New England coastal towns including Hampton Beach, New Hampshire, video footage posted on social media showed. Flood waters inundated streets, crept up to homes and businesses and submerged vehicles, causing officials in the beach town of 2,500 to declare an emergency and order evacuations. "An emergency has been declared as a result of extremely high seas and flooding," Hampton Police Department said on X. "If you live in the area we recommend you temporarily leave the area for higher ground." Major cities such as New York, Philadelphia and Boston were also expected to see potentially damaging gusts of more than 50 miles (80 km) per hour that could take down trees and powerlines during the afternoon and evening, the NWS said. Some 300,000 homes and businesses from North Carolina to Maine were without power on Wednesday afternoon, Poweroutage.us reported. The storm also caused more than 1,200 flights to be delayed or canceled as of Wednesday afternoon, including more than 270 flights in and out of Chicago, according to Flightaware.com. The storm was already responsible for at least three deaths in Alabama, North Carolina and Georgia, where high winds and several tornadoes ripped through parts of the South, according to authorities and local media reports. Two motorists were also killed in Wisconsin and Michigan, where heavy snow fell across the region, causing treacherous driving conditions, local media reported. A separate winter storm was expected to continue during the day in the Pacific Northwest, where many communities in higher elevations were expected to get blizzard-like conditions. https://www.reuters.com/world/us/winter-storm-along-us-east-coast-leaves-behind-power-outages-flooding-2024-01-10/

2024-01-10 20:40

BOSTON, Jan 10 (Reuters) - U.S. Treasury Secretary Janet Yellen said on Wednesday that Inflation Reduction Act tax credits will cost more than initially estimated, citing strong demand for clean energy investments. Yellen said during a visit to Boston to promote the green energy tax credits that the President Joe Biden's administration will come out with a formal assessment of costs, but declined to name a figure. Some private forecasters including Goldman Sachs have estimated that the program initially estimated at $369 billion over 10 years would ultimately cost as much as $1 trillion. The White House budget office last July estimated that the clean energy subsidies over 10 years would increase by $120 billion. "I don't have the number for you at the moment, but I wouldn't disagree with the cost has risen," Yellen told reporters at Roxbury Community College. "But importantly, what that reflects is the effectiveness, the tremendous response rate that we're seeing from the private sector from cities and states to these incentives." Congressional negotiators have been sparring over cutting federal spending with government shutdown deadlines looming as soon as Jan. 19. Senate Republican leader Mitch McConnell has said another short-term stop-gap funding measure will likely be needed to keep some agencies open. ENERGY COST SAVINGS Yellen said in remarks after touring a smart building lab at Roxbury Community College that the IRA tax credits will help save people money on utilities and shield them from future price volatility in fossil fuel energy. The tax credits, which help defray costs of household energy upgrades, are among administration efforts to lower the cost of living for Americans. "But despite how far we’ve come, we know significant work remains to be done. For too many families, prices for goods that matter - such as groceries, rents, and prescription drugs - are high," Yellen said. Persistent inflation has hindered Biden's efforts to win credit from voters on his handling of the economy, but that is now easing. Yellen has said that as wage increases outpace prices, Americans will start to feel more financially confident. She said Massachusetts households using natural gas for heat will spend $900 this winter, while those using heating oil will spend over $2,000 -- a bill that can be cut in half by switching to an electric heat pump, Yellen added. But such conversions, particularly in Massachusetts where oil heat is prevalent in older homes, can costs tens of thousands of dollars. The IRA, passed in August 2022, allows families to receive a $2,000 tax credit for installing an electric heat pump to replace oil or gas furnaces, and they can receive a tax credit of up to $1,200 for installing energy efficient windows. The legislation also allows for tax credits of up to $7,500 to offset the cost of electric vehicles. "You can also discount by up to 30 percent the cost of putting solar panels on your roof or batteries in your garage to store the energy those panels produce," Yellen said. https://www.reuters.com/markets/us/yellen-says-clean-energy-tax-credits-will-help-americans-save-money-more-work-2024-01-10/