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Standard Chartered predicts that bitcoin could fall to $5,000 in 2023 as part of their research on potential market surprises next year.

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Bitcoin could drop to $5,000 next year in a market surprise that investors are under-pricing, according to Standard Chartered.

If that level is reached, it would mark a roughly 70% plunge from Monday’s price of just over $17,000 for one bitcoin.

In a note entitled “The financial-market surprises of 2023,” Standard Chartered outlined a number of possible scenarios that “we feel are under-priced by the markets.”

“Yields plunge along with technology shares, and while the Bitcoin sell-off decelerates, the damage has been done. More and more crypto firms and exchanges find themselves with insufficient liquidity, leading to further bankruptcies and a collapse in investor confidence in digital assets,” Eric Robertsen, global head of research at Standard Chartered Bank, said in the note Sunday.

Robertsen said the somewhat extreme scenarios “have a non-zero probability of occurring in the year ahead, and … fall materially outside of the market consensus or our own baseline views.”

Bitcoin has already fallen more than 60% this year after a string of high-profile collapses of projects and companies plagued the industry. The latest and biggest casualty is cryptocurrency exchange FTX which has filed for bankruptcy. Contagion from the fallout of FTX continues to spread through the market.

The drop in bitcoin’s price will also coincide with a rally in gold, Robertsen said, arguing the yellow metal could potentially rally 30% to $2,250 per ounce “as cryptocurrencies fall further and more crypto firms succumb to liquidity squeezes and investor withdrawals.”

Robertsen says gold could re-establish itself as a safe haven, with investors flocking to the commodity for stability in times of market volatility.

“The 2023 resurgence in gold [also] comes as equities resume their bear market and the correlation between equity and bond prices shifts back to negative,” he added.

Standard Chartered’s view is not the only bearish outlook on bitcoin. Veteran investor Mark Mobius told CNBC last week that he sees bitcoin falling to $10,000 in 2023 due to rising interest rates and tighter monetary policy from the U.S. Federal Reserve.

However, there are still those who are bullish on bitcoin. Venture Capitalist Tim Draper told CNBC on Saturday that he thinks bitcoin can hit $250,000 next year.

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Bunq, a neobank for ‘digital nomads,’ accelerates U.S. expansion effort as profit jumps 65%

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Bunq, a neobank for 'digital nomads,' accelerates U.S. expansion effort as profit jumps 65%

Dutch digital bank Bunq is plotting re-entry into the U.K. to tap into a “large and underserved” market of some 2.8 million British “digital nomads.”

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Dutch digital bank Bunq on Tuesday said it’s filed for broker-dealer registration in the U.S. as it looks to further expand across the Atlantic.

Bunq CEO Ali Niknam said the broker-dealer application will be an initial step toward securing a full banking license. He couldn’t offer a firm timeline for when Bunq will secure this authorization in the U.S. — but said he’s excited for its growth prospects in the country.

Obtaining a broker-dealer license will mean Bunq “can offer our users who have an international footprint — which is the user demography we’re aiming for — a great number of our services,” Niknam told CNBC. Bunq mainly caters for “digital nomads,” individuals who can live and work from anywhere remotely.

Bunq will be able to offer most of its services in the U.S. with the exception of a savings account after securing broker-dealer authorization, Niknam added.

Bunq, which touts itself as a bank for “digital nomads,” currently has a banking license in the European Union. It has applied for an Electronic Money Institution (EMI) in the U.K. Bunq previously had operations in Britain but forced to withdraw from the country in 2020 due to Brexit.

Bunq initially filed for a U.S. Federal bank charter in April 2023. However, it withdrew the application a year later, citing issues between its Dutch regulator and U.S. agencies. The company plans to resubmit its application for a full U.S. banking license later this year.

65% jump in profit

Beyond the update on international expansion, Bunq also on Tuesday reported a 65% year-over-year jump in profit to 85.3 million euros ($97.2 million). That jump was primarily driven by a 55% increase in net interest income, while net fee income also grew 35%.

Similarly to fintech peers such as N26 and Monzo, Bunq has benefited from a high interest rate environment by pocketing yields on customer deposits sat at the central bank.

Bunq’s CEO told CNBC that, while high interest rates have certainly helped, more generally Bunq is seeing increased usage of the platform and has been focused on cost efficiency from an operational perspective.

“Because we are so lean and mean, and because we have set up all of our systems from scratch … we have been able to not only increase our profits, but also offer very good interest rates in the European market in general, and in the Netherlands specifically,” Niknam said.

Ripple president says crypto 'here to stay' regardless of short-term volatility

More recently, central banks in the EU and U.K. and U.S. have moved to slash interest rates in response to falling inflation and concerns of an economic slowdown, which can bite into bank earnings.

Niknam said he’s not concerned by the prospect of rates coming down and expects potential declines in interest income to be offset by a “diversified” revenue mix that includes income from paid subscription products, as well as new features. Bunq recently launched a tool that lets users trade stocks.

“This is different in continental Europe to the U.K. We had negative interest rates for long,” Niknam told CNBC. “So as we were growing, actually our cost base was also growing because we had to pay for all the deposits that people deposited a Bunq so I think we’re in a great position in 2025

Bunq is coming up against heaps of competition, especially in the U.S. market. America is already served by established consumer banking giants, including JPMorgan Chase, Bank of America, Wells Fargo and Citigroup. It’s also home to several major fintech brands, such as Chime and Robinhood.

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HPE shares pop after activist Elliott Management takes $1.5 billion stake

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HPE shares pop after activist Elliott Management takes .5 billion stake

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Shares of Hewlett Packard Enterprise jumped nearly 5% after Elliott Investment Management built a more than $1.5 billion stake in the server maker, a person familiar with the matter told CNBC.

The activist investor hopes to engage the company in discussions on how to improve shareholder value, the source said.

Elliott declined to comment on the news. HPE did not immediately respond to CNBC’s request.

Shares of the data center equipment maker have lost more than a fourth in value this year. Last month, the company topped quarterly revenue expectations, but issued weak fiscal full-year guidance. HPE said it was grappling with higher discounting and expected price adjustments to weigh on its top-line growth.

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Elliott has a long history in pushing for changes at some of the world’s largest companies, including Salesforce, Southwest Airlines and Starbucks.

Most recently, the investment management firm took a $1.5 billion stake in industrial software maker Aspen Technology, and said it opposed a deal that would allow Emerson Electric to buy remaining shares of the company in a $7.2 billion deal. In March, the firm named nominees to join the board of oil company Phillips 66, where it has amassed a $2.5 billion stake.

HPE is currently in attempting to buy Juniper Networks for $14 billion, but the U.S. Department of Justice sued to block the deal earlier this year.

Bloomberg first reported the news.

Correction: This story has been updated to reflect that Elliott took a $1.5 billion stake in HPE. A previous version of the story misstated the amount.

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U.S.’ inability to replace rare earths supply from China poses a threat to its defense, warns CSIS

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U.S.' inability to replace rare earths supply from China poses a threat to its defense, warns CSIS

Workers transporting soil containing rare earth elements for export at a port in Lianyungang, Jiangsu province, China, Oct. 31, 2010.

Stringer | Reuters

As China imposes export controls on rare earth elements, the U.S. would be unable to fill a potential shortfall, according to the Center for Strategic and International Studies — and this could threaten Washington’s military capabilities.

Amid U.S. President Donald Trump’s escalating tariffs on China, Beijing earlier this month imposed export restrictions on seven rare earth elements and magnets used in defense, energy and automotive technologies. 

The new restrictions — which encompass the medium and heavy rare earth elements samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium — will require Chinese companies to secure special licenses to export the resources. 

Though it remains to be seen exactly how China will implement this policy, the CSIS report, published Monday, warns that it will likely result in a pause in exports as Beijing establishes the licensing system, and cause disruptions in supply to some U.S. firms. 

The New York Times reported earlier this week that a pause in China’s rare earth element exports was already occurring.

As China effectively holds a monopoly over the supply of global heavy rare earths processing, such restrictions pose a serious threat to the U.S., particularly its defense technology sector. 

China wants to send the US a message with its rare earths export ban, says advisor

“The United States is particularly vulnerable for these supply chains,” CSIS warned, emphasizing that rare earths are crucial for a range of advanced defense technologies and are used in types of fighter jets, submarines, missiles, radar systems and drones. 

Along with the export controls, Beijing has placed 16 U.S. entities — all but one in the defense and aerospace industries — on its export control list. Placement on the list prevents companies from receiving “dual-use goods,” including the aforementioned rare earth elements. 

Not ready to fill gap

According to CSIS’s report, if China’s trade controls result in a complete shutdown of the medium and heavy rare earth element exports, the U.S. will be incapable of filling the gap.

“There is no heavy rare earths separation happening in the United States at present,” CSIS said, though it noted the development of these capabilities is underway.

For example, the Department of Defense set a goal to develop a complete rare earth element supply chain that can meet all U.S. defense needs by 2027 in its 2024 National Defense Industrial Strategy

Since 2020, the DOD has committed over $439 million toward building domestic supply chains and heavy rare earths processing facilities, according to data collected by CSIS. 

However, CSIS said that by the time these facilities are operational, their output will fall well short of China’s, with the U.S. still far from meeting the DOD’s goal of an independent rare earth element supply. 

“Developing mining and processing capabilities requires a long-term effort, meaning the United States will be on the back foot for the foreseeable future,” it added. 

U.S. President Trump has also been seeking a deal with Ukraine, which would give it access to its deposits of rare earth minerals. However, questions remain about the value and accessibility of such deposits.

Implications 

The CSIS report warns that the export controls pose direct threats to U.S. military readiness, highlighting that the country is already lagging behind in its defense manufacturing.

“Even before the latest restrictions, the U.S. defense industrial base struggled with limited capacity and lacked the ability to scale up production to meet defense technology demands,” its authors said. 

They cite an estimate that China is acquiring advanced weapons systems and equipment five to six times faster than the U.S., originating from a U.S. Air Force official in 2022.  

“Further bans on critical minerals inputs will only widen the gap, enabling China to strengthen its military capabilities more quickly than the United States,” the report concludes.

The U.S. is not alone in its concerns about China’s monopoly on rare earths, with countries like Australia and Brazil also investing in strengthening domestic rare earth elements supply chains. 

CSIS recommends that the U.S. provide financial and diplomatic support to ensure the success of these initiatives. 

However, China’s new export licensing system for the rare earths could also incentivize countries across the world to cooperate with China to prevent disruptions to their own supply of the elements, CSIS said. 

A research report from Neil Shearing, group chief economist at Capital Economics, on Monday also noted how controls on rare earths and critical minerals have become part of Beijing’s playbook in pushing back against Washington.

Shearing notes that in addition to China’s hold on some rare earths, the supply of many other critical minerals, including cobalt and palladium, is concentrated in countries that align with Beijing. 

“The weaponising of this control over critical minerals — and the race by other countries to secure alternative supplies — will be a central feature of a fractured global economy,” he said. 

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