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Cryptoverse: Gold Coins Glimmer Amid the Global Gloom

Clayton Lee

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(C) Reuters. FILE PHOTO: Employees process ingots of 99.99% pure gold at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia November 22, 2018. REUTERS/Ilya Naymushin/File Photo
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By Lisa Pauline Mattackal and Medha Singh

(Reuters) – A fledgling class of crypto that feasts on risk is outshining a wider market paralyzed by war and inflation.

Coins backed by gold are newer variants of “stablecoins”, which are typically pegged to the dollar to tame volatility. The largest, Pax Gold or PAXG, has jumped 7.4% in 2022, while main rival Tether Gold has leapt 8.5%.

By contrast, bitcoin has lost over 13% and ether is down 20%.

“One of the main concerns that a lot of people who are new to crypto have is that it’s not backed by anything. It just gets on a screen,” said Everett Millman, chief market analyst at Gainesville Coins. “So attaching them or linking them to a real-world commodity, it does make some sense.”

The reach for gold, a traditional hedge against geopolitical upheaval and inflation, is unsurprising. The demand for gold-backed cryptocurrencies, though, is new.

Stablecoins, a fast-growing breed of crypto, have emerged as a common medium of exchange, often used by traders seeking to move funds around. It is easier to swap major stablecoins for bitcoin or other crypto, for example, than it is to swap traditional money like U.S. dollars for bitcoin.

Tether Gold has been buoyed by bigger investors, including “whales” with $1 million or more of cryptocurrency, using the token to change a portion of their holdings into gold, according to Paolo Ardoino, Tether’s chief technology officer.

“Many of our investors were already involved in crypto, but were interested in not having their entire wealth in cryptos or in dollars, and were seeking more inflation-resistant assets like gold,” he said.

Yet gold-backed coins are still a niche novelty in the crypto market at present – PAXG and Tether Gold are barely over two years old – with thin liquidity and little certainty about their long-term fortunes.

PAXG has seen its market value almost double to $627 million this year, while Tether Gold has risen 9% to above $209 million. By comparison the latter’s eight-year-old sibling, dollar-pegged Tether – the world’s largest stablecoin – has a market cap of over $83 billion.

According to data from CoinMarketCap, daily PAX gold trading volumes ranged between $10 million to $520 million over the past month, compared to ether volumes which fluctuated between $8.7 billion and $25 billion in April. Dollar-pegged tether’s 24-hour volumes ranged between $35 billion and $92 billion.

ALL THAT GLITTERS?

Sceptics argue that PAXG, developed by the company Paxos, and Tether Gold have merely risen on the coat-tails of a broad rush for gold; indeed they have tracked the price of physical gold, which is up about 8.5% this year. PAXG is up 4.5% since Feb. 23, the day before Russia invaded Ukraine, versus gold’s 4%.

The SPDR Gold Shares (NYSE:GLD) exchange-traded fund, which is managed by State Street (NYSE:STT) Global Advisors, is up 7.6% in 2022.

“The (crypto gold) tokens themselves aren’t immutable. They’re literally just IOUs that happen to be using blockchain infrastructure,” said Alex Thorn, head of firmwide research for Galaxy Digital in New York.

He said investors would have to determine whether they should have the same level of confidence in the companies behind PAXG and the gold ETF.

“They’re both basically synthetic gold exposure backed by gold holdings. Perhaps trust is part of the thing that people would consider when deciding whether we can trust Paxos the same way we trust State Street.”

Nonetheless, advocates of such coins say they offer the ease of owning gold without having to worry about storing a physical coin or bar, while eliminating the minimum margin requirements often required to trade gold on traditional markets.

PAXG, for instance, requires a minimum investment of the equivalent of 0.01 ounce of gold, roughly $20, versus the $184 an investor would pay for each share of the SPDR Gold ETF.

Millman at Gainesville Coins also argued that gold-backed stablecoins bolstered the credibility of cryptocurrencies.

“One of the main criticisms of cryptos is that they have been so extremely volatile. Hence, the idea to back a token with a stable commodity,” he said. “The marriage between those two things could actually also bolster confidence in cryptos.”

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Original Source: investing.com

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U.S. Senate Committee Backs Biden Nominee to Be Ukraine Ambassador

Clayton Lee

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(C) Reuters. FILE PHOTO: Bridget Brink, nominated to be U.S. ambassador to Ukraine, testifies at her Senate Foreign Relations Committee confirmation hearing at the U.S. Capitol in Washington, U.S., May 10, 2022. REUTERS/Kevin Lamarque/File Photo

WASHINGTON (Reuters) – The U.S. Senate Foreign Relations Committee on Wednesday unanimously approved U.S. President Joe Biden’s nominee to be the next ambassador to Ukraine, veteran diplomat Bridget Brink, and planned to push for her quick confirmation by the full Senate.

Brink is expected to easily win confirmation to a crucial position that has been vacant for three years.

The committee held Brink’s confirmation hearing on May 10, just two weeks after Biden sent her name to the Senate. The quick action underscored the desire from both Biden’s Democrats and Republicans to send an ambassador to support Ukrainian President Volodymyr Zelenskiy as he faces Russia’s invasion.

The Senate is expected later this week to approve nearly $40 billion in military and humanitarian support for Kyiv.

A Michigan native who speaks Russian, Brink is currently U.S. ambassador to Slovakia. She has been a career diplomat for 25 years and has worked in Uzbekistan and Georgia as well as in several senior positions across the State Department and White House National Security Council.

Brink was confirmed by unanimous voice vote in 2019, when former Republican President Donald Trump nominated her for the position in Bratislava.

U.S. Senate committee backs Biden nominee to be Ukraine ambassador

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Article: investing.com

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Japan’s Trade Gap Widens As Import Costs Surge on Supply Pressures

Clayton Lee

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(C) Reuters. FILE PHOTO: A cargo ship and containers are seen at an industrial port in Tokyo, Japan, February 15, 2022. REUTERS/Kim Kyung-Hoon

By Tetsushi Kajimoto and Daniel Leussink

TOKYO (Reuters) – Japan’s exports logged a third straight month of double-digit gains in April led by U.S. demand, but surging global commodity costs inflated the country’s import bill to a record, adding to worries about the rising cost of living.

Shoring up the prospects of a private demand-led recovery, however, was a gauge of capital expenditure that posted its first monthly gain in three months.

The mixed data on Thursday followed the yen’s falls to two-decade lows beyond 131 to the dollar earlier in May, which stoked fears of worsening terms of trade and added financial burdens for the resource-poor Japanese economy as import costs soar.

A weak yen, once considered a boon to the export-led economy, is now having less of an impact as shipments grow smaller, given the ongoing shift by Japanese manufacturers to offshore production.

Japan’s exports rose 12.5% in April from a year earlier, Ministry of Finance data showed, led by U.S.-bound shipments of cars and undershooting a 13.8% increase expected by economists in a Reuters poll. It followed a 14.7% rise in March.

Imports rose 28.2% in the year to April, versus the median estimate for a 35.0% increase, as a weaker yen helped boost already surging global commodity prices.

That resulted in a trade deficit of 839.2 billion yen ($6.54 billion), narrower than the median estimate for a 1.150 trillion yen shortfall but posting a ninth straight month in the red.

Analysts have warned of the risks of prolonged cost-push inflation to the fragile economy with external factors, not domestic demand, pushing import bills higher.

Separate data showed on Thursday Japan’s core machinery orders rose 7.1% in March from the previous month, versus a 3.7% increase expected by economists in a Reuters poll.

The volatile data series, regarded as a leading gauge of capital expenditure in the coming six to nine months, provided a glimmer of hope for a domestic demand-led recovery.

Japan’s economy shrank for the first time in two quarters in the January-March period as COVID-19 curbs hit the service sector and surging commodity prices created new pressures.

($1 = 128.3600 yen)

Japan’s trade gap widens as import costs surge on supply pressures

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Article: investing.com

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Barclays Appoints Hossein Zaimi As Asia Pacific Markets Head

Clayton Lee

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(C) Reuters. FILE PHOTO: A branch of Barclays Bank is seen, in London, Britain, February 23, 2022. REUTERS/Peter Nicholls

HONG KONG (Reuters) – Barclays (LON:BARC) said on Thursday Hossein Zaimi had been appointed as its head of markets for Asia Pacific and would join the bank after a long career at rival HSBC

Zaimi will remain based in Hong Kong and report to Adeel Khan and Stephen Dainton, co-heads of Barclays global markets business and Jaideep Khanna, the bank’s head of Asia Pacific, a statement said.

Zaimi spent more than 17 years at HSBC and was most recently the global head of equities and global co-head of securities financing.

Barclays appoints Hossein Zaimi as Asia Pacific markets head

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Article: investing.com

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