Bitcoin powered to a record high on Tuesday, approaching the US$50,000 mark, basking in the afterglow of Elon Musk-led Tesla’s investment in the cryptocurrency that had investors believing it may become a mainstream asset class.
The most popular cryptocurrency has gained 1,150 per cent since its March 2020 lows, as institutional investors searched for alternative investments and retail traders rode the wave. It traded at a few hundred dollars only five years earlier. Glassnode, which provides insight on blockchain data, said in its latest report that bitcoin’s limited supply suggested further gains for the virtual asset.
Bitcoin’s liquid supply is continuing to decrease, as investors increasingly acquire and “hodl” the asset for the long term. “Hodl” is crypto slang for the act of an investor holding the asset instead of selling it.
Currently, around 78 per cent of issued bitcoin are either lost or being “hodled.” This leaves less than four million bitcoins to be shared among future market entrants – including large institutional investors such as PayPal, Square, S&P 500 companies, and exchange traded funds, Glassnode said.
On Monday, bitcoin leapt 20 per cent after Tesla announced it had a US$1.5 billion investment and that it would eventually take the cryptocurrency as payment for its cars. That was its largest daily rise in more than three years.
It climbed to a peak of US$48,216.09 – almost enough to buy one of the best-selling Tesla vehicles, the Tesla Model Y SUV. Rival cryptocurrency ethereum struck a record high of US$1,825.36 on Tuesday.
Musk’s foreseeing acceptance of the currency as payment for Tesla cars has analysts reckoning this is a large shift as companies and big investment houses follow small traders into the asset.
Marc Chandler, chief market strategist at Bannockburn Global Forex, remains unconvinced and said bitcoin remains a speculative vehicle.
“The fact that it draws some institutional investors or even some companies does not change this fact. Bitcoin has no earnings stream that can be modeled,” said Chandler. “It has no break-up or replacement cost. There is no intrinsic value. They have no use-value the way economists understand it.”
Bitcoin’s volatility has also been a hindrance for some serious investors and a sticking point in using it for transactions. Realized volatility, or daily price swings measured in terms of closing prices for bitcoin over the past 90 days, was at 72 per cent, compared with 16 per cent for the S&P 500 stocks index and six per cent for the euro currency.
What’s more, with bitcoin’s value tripling in the past three months, analysts raised questions over how its volatility would affect someone buying a Tesla car in bitcoin.
“Unless the price of bitcoin stabilizes, either bitcoin’s price falls drastically and you end up having won a Tesla in a lottery, or its price triples and you end up paying your Tesla far too expensive,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
Billionaire Musk has long been a cryptocurrency fan – he has talked them up online – but Tesla’s hard currency investment came as a surprise that has put a rocket under the sector.
“Right now, it still seems like a bit of a leisurely pursuit, to acquire bitcoin. But I think by the end of the year, with the current rate of institutional flow inbound, it will become clear that this is a once-in-a-lifetime landgrab,” said Jehan Chu, founder and managing partner at Kenetic, which invests in blockchain-related companies.
Still, in BofA’s January fund manager survey, bitcoin topped the list of “most crowded” trades. Another survey, by Deutsche Bank, warned of price bubbles in the cryptocurrency.
Bitcoin is already up 67 per cent this year, on top of a 300 per cent rally last year, as investors search for alternatives to the dollar because of the U.S. Federal Reserve’s 0 per cent interest rates. The dollar slid against most currencies on Tuesday.
In the ongoing digital wave, central bankers and regulators, particularly in China, are also starting to embrace issuing their own digital currencies for everyday use, in a major break from the conventional workings of global finance.
Beijing will issue 10 million yuan ($1.55 million) worth of digital currency to residents that can be used during the Lunar New Year holiday starting on Thursday, domestic media reported.
However, Vitor Constancio, former vice-president of the European Central Bank, wrote on Twitter that policymakers should focus on regulating cryptocurrencies and develop digital currencies only if they will help banks in their role of enabling credit creation.
The Tesla news-led rally stretched beyond bitcoin. Shares of companies that provide trading platforms for bitcoin and the technology to “mine” the cryptocurrency surged in China, South Korea, and Australia, and big computer-chip making companies such as SK Hynix also rose.
Teen allegedly behind large Twitter hack eliciting Bitcoin facing 30 felony charges
MicroStrategy Inc., a business intelligence software firm and a bitcoin buyer, has climbed 215 per cent so far this year, after posting gains of 172 per cent in 2020.
Even dogecoin, a cryptocurrency with a dog as its symbol, has seen its value turbocharged after Musk mentioned it on Twitter. It has jumped 13 per cent in the past day, according to CoinMarketCap.
“It’s really become popular culture and mainstream,” Chu said. “People are no longer asking ‘Why should I invest in bitcoin?’ They’re having to defend why they’re not.” ($1 = 6.4493 Chinese yuan)
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Tom Westbrook in Singapore, Thyagaraju Adinarayan in London, and Stanley White in Singapore; Editing by Dan Grebler)
© 2021 Reuters
Temasek Makes Rare Seed Investment in Plant-Based Chicken Maker – BNN
(Bloomberg) — Plant-based chicken maker Next Gen Foods has closed a $10 million seed round co-led by Temasek International, a rare early-stage bet by Singapore’s state-owned investor.
The funding round was also backed by family office K3 Ventures, the Economic Development Board of Singapore’s New Ventures unit and NX-Food, a startup hub owned by Germany’s Metro AG. The investors will help fund a regional expansion as Next Gen prepares to start selling to Singapore restaurants from March 18.
The deal is a sign that Temasek, which manages S$306 billion ($232 billion) and also backs plant-based beef rival Impossible Foods, is ramping up deals in the alternative protein space as Singapore attempts to secure 30% of its food locally by 2030. While the firm’s subsidiaries like Vertex Venture Holdings have previously invested in seed funding rounds, the parent company has traditionally backed more mature businesses at the Series A level and beyond.
Next Gen was co-founded by Timo Recker, whose family has long worked in pork production. He wanted to move away from meats and in 2013 used his industrial know-how and some family capital to launch LikeMeat, which sells currywursts, schnitzels and other products made of soy and peas.
Recker sold control of that business last year and launched Next Gen in Singapore. It uses suppliers in the Netherlands to produce soy-based chicken pieces with “lipi,” a trademarked mix of plant-based ingredients it says imparts a chicken-like taste in the same way heme boosts the realism of Impossible Foods’ fake-beef burgers. The product will be sold under the brand name Tindle.
But where Impossible Foods’ heme features genetically engineered soy – forcing it to gain regulatory approval before entering some markets – Next Gen uses natural ingredients. For K3 Ventures Chief Executive Officer Meng Xiong Kuok, that was an important factor in making the investment.
“Building up their capabilities based on non-GMO soybeans helps guarantee and set the foundations for their potential entry into the China market,” he said.
Singapore is positioning itself as a global hub for alternative protein development and production. It recently became the first country to approve the sale of cell-based chicken via Eat Just Inc. and is home to Shiok Meats – a producer of lab-grown prawn meat.
The backing of institutional investors won’t guarantee success, with startups and conglomerates around the world working on plant-based meat products. The segment is expected by UBS Group AG to be worth more than $51 billion by 2025, or about 2.5% of the overall meat market.
Next Gen outsources the manufacturing of its products and will initially sell through restaurants instead of direct to consumers. To prevent partners from replicating their recipe, contractors produce different components before it’s assembled into the final product. Its Netherlands-based partner can produce 5,000 tons annually, enough for 9,000 restaurants, and Recker predicts this capacity will be enough to last two to three years.
“We’re building now our teams and will then scale the brand globally,” he said. “We want to become the undisputed leader for plant-based chicken.”
©2021 Bloomberg L.P.
Newfoundland and Labrador ranks top 10 globally in mining investment attractiveness, policy perception – TheChronicleHerald.ca
ST. JOHN’S, N.L. —
Newfoundland and Labrador is good as gold, according to a global mining industry survey.
The Fraser Institute’s 2020 survey of mining and exploration companies placed Newfoundland and Labrador in the top 10 jurisdictions for both investment attractiveness and policy.
The survey ranked 77 places, including several North American states, provinces and territories. Newfoundland and Labrador placed eighth in both categories.
Saskatchewan was the only other province to make the top 10, placing third in investment attractiveness and ninth in policy perception. Nova Scotia meanwhile ranked among the bottom 10 in the investment category and 24th for mining-friendly policy.
Jairo Yunis, a policy analyst with the Fraser Institute who co-authored a report based on the survey results, said the most attractive jurisdictions for investment tend to match their mineral potential with a competitive policy environment.
“However, Newfoundland’s improvement from (2019), when it ranked 28th in terms of overall investment attractiveness, was largely driven by improved perceptions by investors on its mineral potential,” he said. “When considering mineral potential alone, the province went from ranking 50th in 2019 to 11th in 2020, with no changes in its policy ranking.”
Last year, the provincial Department of Industry, Energy and Technology processed 389 mineral exploration applications, more than in any of the previous five years. Expenditures for mineral exploration in 2020 were also up, climbing from $50 million in 2019 to $61 million last year.
Ed Moriarity, executive director of Mining Industry NL, said a combination of good people, solid infrastructure and strong geology and geoscience has placed the province in a position to succeed when it comes to this sector. He added the exploration and mining operations in Newfoundland and Labrador are quite diverse. In turn, this diversity helps attract further investment.
Saskatchewan 3rd most attractive jurisdiction worldwide for mining investment, Quebec and Newfoundland and Labrador also in global top 10.
— The Fraser Institute (@FraserInstitute) February 23, 2021
“You see (the survey) every year, and Newfoundland and Labrador will vary from year to year, but I was quite pleased to see it in the top 10 again,” Moriarity said. “We want to see us in the top three, or as we like to say, the best place in the world in which to explore and develop a mine.”
Moriarity said a favourable commodity market for gold has certainly helped Newfoundland and Labrador.
“The number of companies that are active in the province compared to year over year is also a factor in terms of that general awareness,” he added, noting there’s been a lot of work happening over the years to promote Newfoundland and Labrador’s mineral potential. In the last couple of years, he’s noticed an uptick in the frequency of news releases touting the achievements of projects in the province.
Moriarity sees another trend emerging that Newfoundland and Labrador is well-positioned to act on — green and low-carbon minerals are abundant in the province, including copper, nickel and cobalt.
“We have the potential here to realize that phase of development,” Moriarity said. “I think fundamentally as the world shifts in that direction, jurisdictions that are safe harbours, good legal and regulatory framework, that have a strong professional work force to avail of, that have the supply and service sector necessary to support it, all these factors are put into the risk equation for companies. And on the bottom line is the quality and quantity of the mineral occurrences and prospectivity you have in the province. That, I think, is always going to be a fundamental benefit for Newfoundland and Labrador as we move forward and capture these new opportunities and get our attention and direction focused there.”
Yunis cautioned the survey did identify some areas where the provincial sector could potentially improve in performance, noting 26 per cent of respondents indicated infrastructure was a factor deterring investment in Newfoundland and Labrador.
He said there is also a sense of uncertainty with respect to all Canadian provinces and territories when it comes to protected areas and land claim disputes.
Andrew Robinson is a business reporter in St. John’s. [email protected] | Twitter: @CBNAndrew
CPABC: Led by major project construction, investment in Cariboo BC more resilient than other regions – GlobeNewswire
PRINCE GEORGE, British Columbia, Feb. 24, 2021 (GLOBE NEWSWIRE) — According to BC Check-Up: Invest, an annual report by the Chartered Professional Accountants of British Columbia (CPABC) on investment trends across the province, the number of housing units that began construction in the Cariboo region increased by 8.0 per cent in 2020 compared to the number started in 2019.
“While the Cariboo’s economy has not been immune from the COVID-19 pandemic, some investment data indicate the region has held up reasonably well, particularly compared to other regions,” said Stan Mitchell, CPA, CA, partner at KPMG. “In fact, one key investment metric, the number of housing units started, actually increased in 2020 in the region’s largest municipalities.”
The number of housing units started in Williams Lake, Prince George, and Quesnel stood at 498 in 2020, up from the 461 in 2019. This was entirely due to an increase in the number of attached starts, such as condos and townhomes. In 2020, 277 attached units began construction, up nearly a third (31.9 per cent) compared to 2019. Conversely, detached starts stood at 221 in 2020, down by 12.0 per cent.
“While overall starts did increase, gains in attached unit starts offset a slowdown in detached units,” continued Mitchell. “That being said, the region fared much better compared to the nearly twenty per cent decline in housing starts across the province as a whole. The region also benefited from a significant increase in major project activity.”
Total capital allocated to major capital projects – defined as those with a capital cost over $15,000,000 – in the Cariboo increased by 46.2 per cent in Q3 2020 compared to Q3 2019. The total value of all major projects in the region stood at $15.3 billion in Q3 2020, with nearly 30 per cent under active construction. Of the four major projects currently under construction, by far the largest is the $4.5 billion economic activity expected from Trans Mountain Pipeline Expansion.
“June 2020 marked the official start of construction in the region on the Trans Mountain Pipeline. Given the timing, the project helped provide the region some insulation from the economic disruption resulting from the pandemic,” said Mitchell. “The construction is continuing and will provide jobs and investment for the region in 2021.”
The Cariboo also has 24 major projects in the proposal stage with an estimated cost of $10.4 billion, including several expected to begin construction in 2021.
“The Cariboo is fortunate to have major projects expected to come online in the short-term, including billions of capital allocated for gold, ethanol, and hemp projects. These investments will drive our region’s recovery,” concluded Mitchell. “They have also helped Prince George continue to attract record levels of economic activity, with the value of building permits near the all-time high set in 2019 despite the pandemic. Going forward, large natural resource projects will be a major story as the region emerges from the crisis.”
To learn more, see www.bccheckup.com.
About CPA British Columbia
The Chartered Professional Accountants of British Columbia (CPABC) is the training, governing, and regulatory body for over 37,000 CPA members and 5,500 CPA students. CPABC carries out its primary mission to protect the public by enforcing the highest professional and ethical standards and contributing to the advancement of public policy. CPAs are recognized internationally for bringing superior financial expertise, strategic thinking, business insight, and leadership to organizations.
For more information: Vivian Tse, Manager, Communications 604.488.2647
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