The Financial Action Task Force (FATF) has lowered Russia’s rating owing to insufficient oversight of cryptocurrencies, as indicated by regional coverage. According to RBC, this downgrade highlights escalating worries about the country’s capacity to oversee and mitigate dubious transactions within the rapidly expanding realm of digital finance. Russia’s Financial Strategy Challenged by FATF Downgrade The […]
Bitcoin News
Bitcoin ETFs Boosts Coinbase (COIN) Shares As JPMorgan Upgrades Rating
The recent Bitcoin rally, propelling its price to the ,000 level, has positively impacted the stock of US-based cryptocurrency exchange Coinbase (COIN). After experiencing a notable dip to 5 at the start of February, Coinbase’s stock rose to 2 on Thursday, following a significant upgrade by a JPMorgan analyst.
Improved Prospects For Coinbase Amid Crypto Rally
According to a Bloomberg report, JPMorgan analyst Kenneth Worthington abandoned his bearish view on Coinbase weeks after downgrading the stock.
As Bitcoin traded higher, Coinbase shares gained as much as 7.8% following the upgrade. Worthington believes the exchange will likely benefit from the recent rally in digital asset prices, prompting him to shift his rating back to neutral.
This change in stance comes after Worthington’s January downgrade, where he predicted a potential deflation of enthusiasm for Bitcoin exchange-traded funds (ETFs).
However, contrary to his previous forecast, Bitcoin ETFs have been successful in terms of trading measures, and the price of Bitcoin has surged beyond ,000, reaching its highest level since 2021. In a note to clients on Thursday, Worthington explained:
Given the acceleration in recent days of flows into Bitcoin ETFs and the significant price appreciation of Bitcoin and now Ethereum, we are returning to a Neutral rating on Coinbase as we see the higher cryptocurrency prices not only sustaining but improving activity levels and Coinbase’s earnings power as we look to 1Q24.
Coinbase’s stock experienced an 8% dip at the beginning of the year, following an impressive 400% surge in 2023. Analyst opinions on the stock remain divided, with buy, hold, and sell recommendations being roughly evenly split.
Worthington maintained his price target on the stock ahead of the company’s earnings report, which is scheduled to be released after the market closes on Thursday.
Worthington emphasized that Coinbase’s business is closely tied to token prices, with its core revenue being transaction-based. As the value of tokens increases and trading activity gains momentum, fees based on the value traded are expected to drive higher trading volumes, ultimately contributing to improved revenue for Coinbase.
Bitcoin ETFs Witness Significant Trading Volume
On February 14th, the trading volume of Bitcoin ETFs showcased notable figures, with Blackrock’s IBIT recording the lead with 1 million in volume.
Grayscale’s Bitcoin Trust (GBTC) followed closely with 9 million, while Fidelity’s FBTC secured the third spot with 6 million. On the other hand, Ark Invest accumulated a volume of 9 million.
The nine ETFs’ total trading volume amounted to approximately .5 billion. Notably, the largest ETFs experienced higher trading volume than the previous day, with IBIT surpassing 0 million and GBTC exceeding 0 million.
Intriguingly, before the trading session, GBTC sent less than half of the Bitcoin it sent to Coinbase the previous day. Despite this decrease, GBTC’s total trading volume was 50% higher.
As the demand for Bitcoin continues to surge, ETFs play a crucial role in facilitating institutional and retail investors’ participation in the cryptocurrency market. The increased trading volume of Bitcoin ETFs highlights investors’ growing interest and confidence in digital assets.
Currently, Bitcoin is trading at ,900 and encountering a critical resistance level at ,000.
Featured image from Shutterstock, chart from TradingView.com
Moody’s Downgrades US Credit Rating to ‘Negative’ on Fiscal Deficits and Debt Concerns
The credit agency Moody’s has revised the United States credit outlook to “negative” from “stable” due to concerns over persistent large fiscal deficits and diminishing debt affordability. The announcement follows a previous downgrade by Fitch and reflects ongoing apprehension among investors about federal spending and political discord.
Moody’s Marks U.S. Credit Negative; Biden Administration Challenges View
Moody’s decision on Friday to alter the U.S. credit outlook has come at a time of heightened fiscal scrutiny, as national debt levels rise and political disagreements hinder consensus on budgetary management. As the nation grapples with these fiscal challenges, Moody’s remarks echo investor concerns about the direction of U.S. economic policy and the potential for legislative stalemate over budget and deficit strategies.
“Any type of significant policy response that we might be able to see to this declining fiscal strength probably wouldn’t happen until 2025 because of the reality of the political calendar next year,” Moody’s senior vice president William Foster told Reuters during an interview.
The Biden administration is challenging Moody’s revised outlook, highlighting the alleged strength of the U.S. economy and the government’s dedication to enduring fiscal health. The reverberations of this Moody’s assessment ripple into the political sphere, ramping up the scrutiny on Biden’s team as they pilot through a convoluted fiscal environment. Recent polls show former President Donald Trump ahead of President Joe Biden in various crucial swing states.
Moody’s credit assessment trails closely behind a hawkish speech by Fed Chairman Jerome Powell in Washington, where he conveyed doubts about the adequacy of the Federal Reserve’s policy actions. Deputy Treasury Secretary Wally Adeyemo said the Treasury Department disagrees with Moody’s latest revision.
“While the statement by Moody’s maintains the United States’ Aaa rating, we disagree with the shift to a negative outlook. The American economy remains strong, and Treasury securities are the world’s preeminent safe and liquid asset,” Adeyemo said.
Nevertheless, despite Adeyemo’s remarks, the government’s latest 30-year Treasury auction on Thursday fared badly, with investors describing the bid-to-cover ratio and the yield concession as pathetic. White House spokeswoman Karine Jean-Pierre stressed that Moody’s downgrade is the fault of Republicans. The negative rating she said was “yet another consequence of congressional Republican extremism and dysfunction.”
What do you think about the credit agency Moody’s downgrading the U.S. credit score to negative? Share your thoughts and opinions about this subject in the comments section below.
Microbt Plans to Launch Next-Gen Bitcoin Mining Machine With 1X Efficiency Rating
On September 19, 2023, Microbt, the manufacturer of bitcoin (BTC) application-specific integrated circuit (ASIC) mining rigs, revealed its intentions to introduce an innovative mining machine with an efficiency rating of 1X joules per terahash (J/T). This announcement from Microbt closely follows Canaan’s recent release of the A1466I, which also claims an efficiency rating of 1X J/T or approximately 19.5 J/T. Meanwhile, Bitmain is gearing up to launch a new series later this week, anticipated to align closely with this efficiency benchmark.
Microbt Set to Debut New Bitcoin Mining Rig Series
Shortly before Bitmain’s planned announcement of the new S21 Antminer series and following Canaan’s release of two new Avalon mining rigs, Microbt, a key competitor, unveiled their latest offering: the new M60 series BTC miners.
While Microbt already provides a mining rig (M53S++) capable of delivering 320 terahash per second (TH/s), it maintains an efficiency rating of approximately 22 J/T. Luxor and the team at hashrateindex.com reported that Microbt “overclocked this model to a mind-blowing hashrate of over 360TH/s.”
However, in Microbt’s Tuesday announcement, specific details regarding the hashrate output of the new M60 series were not provided. The statement specifies that the new M60 series will be unveiled on October 24, 2023, during the Blockchain Life 2023 event in Dubai.
The only detail provided about the M60 series is that it will include a rig with an efficiency rating of 1X J/T. In addition to this announcement, on September 5, Microbt revealed an autumn sale for earlier-generation mining rigs, running until September 28.
Towards the end of this week, on September 22 to 23, Bitmain is set to launch its Antminer S21 line at the 2023 World Digital Mining Summit (WDMS). The S21 series will also feature a miner with an efficiency rating of 1X J/T.
What do you think about Microbt’s plans to launch a new bitcoin miner with an efficiency rating of 1X J/T? Share your thoughts and opinions about this subject in the comments section below.
Personal Finance Expert Says US Rating Downgrade Likely to Embolden BRICS Currency Supporters
The American rating agency Fitch’s recent downgrade of the United States’ credit rating from AAA to AA+ may embolden proponents of a BRICS currency, Riley Adams, a personal finance expert, has said. Adams however argues that there are certain “geopolitical issues” that must be overcome first before the BRICS currency becomes a reality.
Debt Ceiling Standoffs and the Impact on the U.S. Credit Rating
According to Riley Adams, a personal finance expert and the CEO of Young and the Invested, the credit rating agency Fitch’s recent downgrade of the United States to AA+ will likely “embolden anyone in the BRICS [Brazil, Russia, India, China, and South Africa] that supports the creation of a new currency.” Adams, also a certified public accountant (CPA), told Bitcoin.com News that Fitch’s report on the country also “relays legitimate concerns about how the budgeting process has devolved in the U.S.”
As reported by Bitcoin.com News, Fitch has tied its downgrade of the U.S. long-term foreign-currency issuer default rating from AAA to AA+ to the “repeated debt-limit political standoffs” and the last-minute resolutions which have in turn “erode[d] confidence in fiscal management.”
Meanwhile, the personal finance expert has posited that many of those opposed to the U.S. dollar’s reserve currency status will now attempt to use news of Fitch’s downgrade to further rally support for a BRICS currency.
“At the very least, it could trigger a short-term shift in sentiment that BRICS-currency supporters could use to get some traction on their ideas,” Adams, a former senior financial analyst for Google, explained.
BRICS Currency and Geopolitical Issues
In the past few years, critics of the U.S.-dominated financial system have highlighted how the country’s divided legislature has played a part in eroding confidence in America’s ability to meet its obligations on time. Also, before the latest debt ceiling agreement was struck, senior U.S. officials including Treasury Secretary Janet Yellen warned that the U.S. Congress’ constant failure to raise the debt limit on time posed a serious threat to the dollar’s dominance.
However, as has been reported by Bitcoin.com News, the same U.S. officials appear less concerned about the possibility of the Chinese yuan or the much-vaunted BRICS currency toppling the greenback. While American leaders have flaunted the dollar’s unmatched backing by United States’ “deep, liquid and open financial markets” when dismissing the prospects of rival currencies, Adams sees “geopolitical issues” as one of the reasons why people ought to be less sanguine about the BRICS currency’s chances of success.
To illustrate, the personal finance expert pointed to a report in which the governor of the South African central bank reveals that a common currency would require a banking union, a fiscal union, and macroeconomic convergence for it to succeed. According to Adams, attempting to achieve this takes “many steps farther than simply trying to decouple from the dollar individually, and [is] much more unlikely to happen.”
Adams said the fact that proponents of a BRICS currency are seemingly trying to walk back earlier comments about the launch suggests the alternative reserve currency will not start circulating in August as some proponents had predicted.
What are your thoughts on this story? Let us know what you think in the comments section below.
Economist Expects US Rating Downgrade to Accelerate De-Dollarization Process
Economists have warned about the adverse impact of Fitch’s U.S. rating downgrade on the dollar. One expects the downgrade to “accelerate” the process of de-dollarization globally. Another stated that it may be “a part of the gradual decline of the U.S. dollar system.”
Impact of Fitch’s Rating Downgrade on US Dollar
Several economists have offered their perspectives on the adverse effects stemming from Fitch Ratings’ decision to downgrade the long-term foreign-currency issuer default rating of the United States from AAA to AA+. Fitch Ratings is one of the top three credit rating agencies in the U.S.
Citic Securities’ chief economist, Ming Ming, told the Global Times on Wednesday:
Amid the increasingly complex geopolitical situation today, more and more countries have started the de-dollarization process and Fitch’s downgrade of the U.S. rating may accelerate that process.
In response to Fitch Ratings’ downgrade, both the White House and Treasury Secretary Janet Yellen released statements expressing strong disagreement with the decision. Yellen asserted that the change was “arbitrary and based on outdated data” while officials from the Biden administration called Fitch’s downgrade decision “bizarre and baseless.”
A growing number of nations globally are actively working to decrease their dependence on the U.S. dollar, particularly after the U.S. weaponized its currency. Leading the efforts towards de-dollarization are the BRICS countries (Brazil, Russia, India, China, and South Africa). The economic bloc has been pushing for the use of national currencies in trade settlements. De-dollarization is expected to be among the major topics discussed at the BRICS leaders’ summit that will take place on Aug. 22-24.
“The negative effect of U.S. monetary policy on the world economy is very significant … some countries have been badly hurt by the U.S. monetary tightening,” Lian Ping, chief economist of Zhixin Investment, told the news outlet.
The chief economist added:
Fitch’s downgrade of its credit rating may also be a part of the gradual decline of the U.S. dollar system.
Do you think Fitch’s U.S. rating downgrade will hurt the U.S. dollar’s dominance? Let us know in the comments section below.
Robert Kiyosaki Warns of ‘Crash Landing’ After US Rating Downgrade
Robert Kiyosaki, the renowned author of the bestselling book Rich Dad Poor Dad, has emphasized his concern about an impending crash of the U.S. economy after a prominent American credit rating agency downgraded the U.S. rating. “Brace for crash landing. Sorry for the bad news,” Kiyosaki said.
Robert Kiyosaki’s Crash Landing Warning
The author of Rich Dad Poor Dad, Robert Kiyosaki, has reiterated his warning about the U.S. economy heading for a “crash landing.” His cautionary message followed the decision by Fitch Ratings, one of the top three credit rating agencies in the U.S., to downgrade the U.S. debt rating from AAA to AA+.
Rich Dad Poor Dad is a 1997 book co-authored by Kiyosaki and Sharon Lechter. It has been on the New York Times Best Seller List for over six years. More than 32 million copies of the book have been sold in over 51 languages across more than 109 countries.
Kiyosaki tweeted Wednesday:
First shoe to drop. Fitch rating services downgrades U.S. credit rating from AAA to AA+. Brace for crash landing. Sorry for the bad news yet I have been warning for over a year the Fed, Treasury, big corp CEOs have smoking fantasy weed. Take care.
The famous author has been warning about an impending economic crash for quite some time. In May, he stated that he believes the U.S. economy is headed for a crash landing, rather than a soft landing or a hard landing as some economists have suggested. Last month, he said that a giant crash is coming and the end of the U.S. dollar is approaching. He emphasized that he still recommends gold, silver, and bitcoin, noting that these three investments are the best for unstable times.
This week, Kiyosaki said the U.S. economy is not strong and America is broke. He further predicts an increase in bank failures, attributing blame to the Biden administration and the Federal Reserve for destroying regional banks. Kiyosaki warned that regional banks are being wiped out due to Fed policies. Moreover, he anticipates that the BRICS nations (Brazil, Russia, India, China, and South Africa) will introduce a common currency that will kill the U.S. dollar.
What do you think about Robert Kiyosaki’s predictions? Let us know in the comments section below.
White House, Yellen Slam Fitch’s US Rating Downgrade — Biden Officials Call It ‘Bizarre and Baseless’
Fitch Ratings has downgraded the United States’ debt rating. Biden officials call the downgrade decision “bizarre and baseless.” Both the White House and U.S. Treasury Secretary Janet Yellen strongly disagreed with the downgrade decision. Yellen claimed that the change by Fitch Ratings “is arbitrary and based on outdated data.”
Fitch Downgrades US Rating
Fitch Ratings, one of the three largest credit rating agencies in the U.S., downgraded the United States’ long-term foreign-currency issuer default rating from AAA to AA+ on Tuesday. The rating agency explained:
The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years.
It also reflects “a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions,” Fitch added.
“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” the rating agency detailed. Moreover, Fitch explained that in its view, “there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025.”
In addition, Fitch described:
We expect the general government (GG) deficit to rise to 6.3% of GDP in 2023, from 3.7% in 2022, reflecting cyclically weaker federal revenues, new spending initiatives and a higher interest burden.
The rating agency placed the country’s credit rating on negative watch in May, citing the debt ceiling fight in Washington. Despite the U.S. successfully avoiding default on its debt obligations in June, Fitch maintained the negative watch. However, in its announcement on Tuesday, Fitch clarified that the negative watch on the U.S. has been removed, and a “stable outlook” has been assigned.
White House, Biden Officials, and Yellen Disagree
Following the rating downgrade, officials from the Biden administration told journalists that the governance issues highlighted by Fitch occurred during former President Donald Trump’s administration. Noting that Fitch had maintained a AAA rating during that period, a senior Biden official said: “This is a bizarre and baseless decision for Fitch to make now … It simply defies common sense to take this downgrade as a result of what was really a mess caused by the last administration and reckless actions by congressional Republicans.”
The White House also released a statement following Fitch’s decision. “We strongly disagree with this decision,” White House Press Secretary Karine Jean-Pierre said. “The ratings model used by Fitch declined under President Trump and then improved under President Biden, and it defies reality to downgrade the United States at a moment when President Biden has delivered the strongest recovery of any major economy in the world.”
Treasury Secretary Janet Yellen also released a statement regarding the downgrade. She stated:
I strongly disagree with Fitch Ratings’ decision. The change by Fitch Ratings announced today is arbitrary and based on outdated data.
“Fitch’s quantitative ratings model declined markedly between 2018 and 2020 — and yet Fitch is announcing its change now, despite the progress that we see in many of the indicators that Fitch relies on for its decision,” Yellen explained. “Many of these measures, including those related to governance, have shown improvement over the course of this administration, with the passage of bipartisan legislation to address the debt limit, invest in infrastructure, and make other investments in America’s competitiveness.”
What do you think about Fitch downgrading the U.S. rating? Let us know in the comments section below.
Fitch Maintains Negative Watch on US Rating Despite Debt Limit Resolution
Although the U.S. has averted defaulting on its debt obligations, Fitch Ratings still has concerns about the country’s ability to repay its debt. As a result, the credit rating agency has placed the U.S. “AAA” rating on negative watch, emphasizing that recent events have lowered “confidence in governance on fiscal and debt matters.”
Fitch Ratings Still Has Concerns About the US
Fitch Ratings, one of the three largest credit rating agencies in the U.S., announced on Friday that the United States’ “AAA” credit rating remains on “negative watch” despite the recent debt limit agreement reached in Congress. The other two major rating agencies in the U.S. are Moody’s Investors Service and Standard & Poor’s.
The U.S. avoided having to default on its debt obligations after Congress passed a bill Friday to suspend the debt limit until Jan. 1, 2025. Without the agreement reached in this bill, the country could default on its debt obligations on June 5, according to Treasury Secretary Janet Yellen.
“The suspension of the debt limit was in line with Fitch’s expectations and the United States’ ‘AAA’ sovereign rating,” the rating agency noted. However, the company explained:
Repeated political standoffs around the debt-limit and last-minute suspensions before the x-date (when the Treasury’s cash position and extraordinary measures are exhausted) lowers confidence in governance on fiscal and debt matters.
“In fact, there has been a steady deterioration in governance over the last 15 years, with increased political polarization and partisanship as witnessed by the contested 2020 election, repeated brinkmanship over the debt limit and failure to tackle fiscal challenges from growing mandatory spending has led to rising fiscal deficits and debt burden,” Fitch continued.
While noting that its U.S. rating is supported by the country’s “exceptional strengths, including the size of the economy, high GDP per capita and dynamic business environment,” Fitch detailed:
The U.S. dollar is the world’s preeminent reserve currency, which gives the government unparalleled financing flexibility. Some of these strengths could be eroded over time by governance shortcomings.
Multiple people have warned that the debt crisis could erode the U.S. dollar’s dominance, including veteran investor Jim Rogers and economist Peter Schiff. However, some insist that the USD will remain the world’s reserve currency, including Moody’s. The rating agency said last month that the U.S. dollar will remain the dominant currency in international trade and finance for decades to come, despite new challenges.
What do you think about Fitch Ratings’ concerns? Let us know in the comments section below.
China’s Credit Agency Downgrades US Credit Rating Over Debt-Ceiling Standoff and Looming Default
China’s oldest credit rating agency, Chengxin International Credit Rating (CCXI), made headlines this week by downgrading the United States’ credit rating. The agency lowered the rating from AAAg to AAg+ and attributed this decision to the escalating political discord, rising inflation, and the ongoing impasse over the debt ceiling.
U.S. Credit Rating Suffers Downgrade by Chinese Credit Agency Amidst Debt-Ceiling Issues
China’s Chengxin International Credit Rating (CCXI) has joined the chorus of credit agencies expressing concern over the United States’ credit rating. Following earlier warnings from Moody’s, S&P, and Fitch regarding the debt ceiling standoff, CCXI has now downgraded the U.S. credit rating.
In alignment with its counterparts, CCXI points to the lingering debt ceiling issue as a primary reason for the downgrade. Additionally, the agency highlights the exacerbation of political divisions, which has further complicated the negotiation process.
“The intensification of political divisions between the two parties in the United States has increased the difficulty of resolving the debt-ceiling issue,” CCXI’s downgrade notice details. Beijing’s credit agency added that a “deterioration in fiscal strength and frequent breaches of the debt ceiling continue to erode the credit base of the U.S. dollar.”
While CCXI took the bold step of downgrading the U.S. credit rating, the credit agencies Fitch, Moody’s, and S&P have chosen a different path. Rather than downgrading the rating like CCXI, these three agencies have opted to place the U.S. rating of “AAA” on watch.
“The Rating Watch Negative reflects the mounting political partisanship that hampers the timely resolution to raise or suspend the debt limit, with the approaching x date adding urgency,” Fitch elaborated in their assessment.
CCXI’s downgrade notice echoes this sentiment, emphasizing that even in the event of a consensus, confidence has been adversely affected. “Even if a consensus is reached, the brinkmanship would pose uncertainty to the U.S. government’s policy path and dampen economic confidence, which could trigger further volatility in U.S. politics and the economy,” the CCXI notice explains.
In the aftermath of credit agencies downgrading the U.S. banking sector due to the collapse of three major U.S. banks, the country now faces the repercussions of a credit rating downgrade. Notably, this marks the first instance of a Chinese institution openly stating concerns about the U.S. debt ceiling. The impact of sovereign rating declines extends beyond the immediate, as they have the potential to elevate short-term borrowing costs across various sectors.
What impact do you think the credit rating downgrade by China’s Chengxin International Credit Rating (CCXI) will have on the United States? Share your opinions and insights in the comments section below.