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Coronavirus likely hammered U.S. economy in first quarter

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WASHINGTON (Reuters) – The U.S. economy likely contracted in the first quarter at its sharpest pace since the Great Recession as stringent measures to slow the spread of the novel coronavirus almost shut down the country, ending the longest expansion in the nation’s history.

FILE PHOTO: People wearing protective masks walk past closed shops on the the Coney Island boardwalk during the outbreak of coronavirus disease (COVID-19) in Brooklyn, New York, U.S., April 11, 2020. Picture taken April 11, 2020. REUTERS/Caitlin Ochs

The anticipated decline in gross domestic product (GDP) will reflect a plunge in economic activity in the last two weeks of March, which saw millions of Americans seeking unemployment benefits. The Commerce Department’s snapshot of first-quarter GDP on Wednesday will reinforce analysts’ predictions that the economy was already in a deep recession.

“The economy is in free fall, we could be approaching something much worse than a deep recession,” said Sung Won Sohn, a business economics professor at Loyola Marymount University in Los Angeles. “It’s premature to talk about a recovery at this moment, we are going to be seeing a lot of bankruptcies for small and medium sized businesses.”

Gross domestic product probably decreased at a 4.0% annualized rate last quarter, weighed down by sharp declines in consumer spending and a drawdown of inventory at businesses, according to a Reuters survey of economists.

That would the steepest pace of contraction in GDP since the first quarter of 2009. A deepening downturn in investment by businesses was likely another major factor in the slump last quarter. Those drags probably overshadowed positive news from a shrinking import bill, the housing market and more spending by the government.

Estimates in the survey were as low as a 15% drop in GDP, which would be the steepest decline on record.

According to Kwok Ping Tsang, an associate professor of economics in the Virginia Tech College of Science, GDP was slashed by nearly $1.2 trillion from March 19 — around the time parts of the United States began lockdowns — to April 15, a 26% drop in output compared to the same period last year.

Many factories and nonessential businesses like restaurants and other social venues were shuttered or operated below capacity amid nationwide lockdowns to control the spread of COVID-19, the potentially lethal respiratory illness caused by the virus.

“For employees who have moved to work-from-home status, it is highly unlikely that labor input remains at 100 percent,” said Tsang. “Employees also must juggle child care, home schooling, and more stressors. Both limitations suggest that our estimates are likely to be biased downward.”

The anticipated contraction in GDP, together with record unemployment, could pile pressure on states and local governments to reopen their economies.

It could also spell more trouble for President Donald Trump following criticism of the White House’s initial slow response to the pandemic, as he seeks re-election in November. Confirmed U.S. COVID-19 infections have topped one million, according to a Johns Hopkins University tally.

“We’ve got the biggest shock since the Great Depression,” Trump’s economic adviser Kevin Hassett said on Tuesday. “It’s a very grave shock and it’s something we need to take seriously.”

The U.S. Congress has approved a fiscal package of around $3 trillion and the Federal Reserve has cut interest rates to near zero and greatly expanded its role as banker of last resort, but economists say these measures are inadequate.

They also did not believe that reopening regional economies, as some states are now doing, would not return the broader economy to pre-pandemic levels, which they said would take years. They expect an even sharper contraction in GDP in the second quarter.

MORE PAIN TO COME

“You are going to get close to 40% contraction in the second quarter,” said Joe Brusuelas, chief economist at RSM in New York. “It’s important that when we talk of reopening, we are not talking about it in a binary fashion. It’s not going from zero to one or flipping the switch. Firms are opening, but still heavily constrained by public health policy.”

Reopening the economy also comes with the risk of unleashing a second wave of new infections and a return to lockdowns.

Economists believe the economy entered recession in the second half of March when the social distancing measures took effect.

The National Bureau of Economic Research, the private research institute regarded as the arbiter of U.S. recessions, does not define a recession as two consecutive quarters of decline in real GDP, as is the rule of thumb in many countries. Instead, it looks for a drop in activity, spread across the economy and lasting more than a few months.

“The NBER will probably not tell us that for a while, but certainly all the characteristics of a very deep recession are fully underway,” said Michelle Girard, chief U.S. economist at NatWest Markets in Stamford, Connecticut.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, is expected to have dropped at as much as a 17% rate in the first quarter. Spending grew at a 1.8% pace in the October-December period.

The other components of GDP were probably equally weak last quarter.

While declining imports helped narrow the trade deficit and contributed at least two percentage points to GDP last quarter, that probably meant no inventory was accumulated. According to JPMorgan business inventories probably decreased at a $30 billion rate in the first quarter after increasing at a $13.1 billion pace in the fourth quarter.

Business investment likely contracted for a fourth straight quarter, pulled down by declines in spending on equipment and nonresidential structures such as mining exploration, shafts and wells. Business investment was already pressured by the Trump administration’s trade war with China, cheaper oil and problems at Boeing.

FILE PHOTO: A general view of downtown Los Angeles, with a working construction site, the day after California issued a stay-at-home order due to coronavirus disease (COVID-19) in Los Angeles, California, U.S., March 20, 2020. REUTERS/Lucy Nicholson

While the housing market likely accelerated last quarter, momentum appears to have fizzled in March. Moderate growth is expected in government spending.

Most economists have dismissed the idea of a quick and sharp rebound, or V-shaped recovery, arguing that many small businesses will disappear. They also predicted some of the about 26.5 million people who have filed for unemployment benefits since mid-March are unlikely to find jobs.

“I don’t see a V-shaped recovery, but a side-ways J-recovery,” said RSM’s Brusuelas.

Reporting by Lucia Mutikani; additional reporting by Tim Ahmann; Editing by Chizu Nomiyama

Source: http://feeds.reuters.com/~r/reuters/topNews/~3/10AaWUapjjI/coronavirus-likely-hammered-u-s-economy-in-first-quarter-idUSKCN22B0A1

AI

Fintech Giant Zip Co to Provide Cryptocurrency Trading Services

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Amazon seems determined to maintain its reputation as an innovative company and is looking to experiment with cryptocurrencies through a digital currency payment and blockchain unit.

According to an announcement posted on Thursday, Amazon is looking for a blockchain specialist to lead its Digital Currency and Blockchain strategy.

The Payments Acceptance & Experience team is seeking an experienced product leader to develop Amazon’s Digital Currency and Blockchain strategy and product roadmap … You will work closely with teams across Amazon, including AWS, to develop the roadmap, including the customer experience, technical strategy and capabilities as well as the launch strategy.

What Amazon is Looking For

The expert must have at least an MBA or equivalent degree, 10+ years of business or technology experience, team management skills, understanding of data and metrics, and good communication skills.

The corporation did not disclose any salary offer. The person must be based on or willing to move to Seattle, Washington.

Amazon seems to be convinced of the need to innovate in the field of payments and finance. The cryptocurrency and blockchain development team is a sign of the company’s interest in exploring these emerging technologies to offer better financial products.


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According to an email shared by Business Insider, Amazon’s team confirmed its interest in exploring an approach to the world of cryptocurrencies. Still, they did not specify whether it would be through the development of a proprietary currency or through the acceptance of cryptocurrencies as a means of payment:

“We’re inspired by the innovation happening in the cryptocurrency space and are exploring what this could look like on Amazon … We believe the future will be built on new technologies that enable modern, fast, and inexpensive payments, and hope to bring that future to Amazon customers as soon as possible.”

An Old Relationship With Crypto

Amazon’s interest in the world of cryptocurrencies isn’t new. Back in 2017, it purchased, at least preemptively, a number of domains linking its brand to cryptocurrencies, including amazoncryptocurrency.com, amazoncryptocurrencies.com, and even amazonethereum.com.

However, at the time, Patrick Gauthier told CNBC that the e-commerce giant did not have much interest in cryptocurrencies and had no plans to support crypto payments.

In fact, the Pay With Moon plugin that allowed payments on Amazon with Bitcoin through Lightning Network had to change its business model to instead allow its users to purchase virtual credit cards instead of paying directly on Amazon’s site.

Also, as Cryptopotato reported in February this year, Amazon launched a job offer for a new payments system involving “Digital and Emerging Payments (DEP),” although they did not mention a direct relationship with Bitcoin or any cryptocurrency either.

This time, however, Amazon seems more willing to go public with its casual relationship with cryptos.

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70% of Institutional Investors Plan to Buy Cryptocurrencies in The Future: Fidelity

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[PRESS RELEASE – Zug, Switzerland, 20th July 2021]

Concordium has today unveiled an ambitious, industry-leading partnership program for global developers as part of its ongoing commitment to build a credible, trusted, and sustainable blockchain industry.

The program offers developers a chance to work alongside some of the most respected names in the blockchain industry and help release the full potential of blockchain and cryptocurrency technology.

Concordium’s platform offers access to a safe, transparent, regulatable, and sustainable blockchain and cryptocurrency, marking the end of an era of anonymity and distrust that has undermined the development of the industry.

The Concordium platform differs from other industry participants by offering previously unseen guarantees of governance and transparency, without compromising privacy.

Users are identifiable and the provenance of every transaction is trackable, creating trust for users and meeting the needs of global regulators. At the same time, identities can be made available, but only if necessary
The Swiss-based company made its Mainnet debut in June, clearing the way for any developer or user to access the Concordium platform and – from today – start receiving financial support to work alongside the company in its mission to revolutionize the industry.

The newly-announced Concordium Free & Open Grants Programme offers developers up to USD20,000 for initial grants and USD75,000 for follow-up grants.

“We are not just a company, we are part of a community,” said Lone Fønss Schrøder, Concordium’s chief executive. “We know we can’t help this industry maximize its potential alone. That’s why we are supporting developers and asking them to join us.”

Developers will be able to work alongside members of Concordium’s Executive and Steering Committee, which includes some of the most respected names in the industry, such as ETH Zurich Prof. Ueli Mahrer and Prof. Hans Gersbach, Dr. Torben Pedersen Concordium’s CTO, and Father of the Pedersen Commitment, and Michael Jackson former Skype COO and Mangrove Capital Partner.

“This is a two way street,” said Torben Pryds Pedersen, Concordium’s CTO. “All good science is collaborative. As an open and decentralized project, Concordium’s vision is grounded in reciprocity and giving back to developers and the science community. First, we created the Concordium Blockchain Research Center in Aarhus, then we announced the DevX Initiative and now, with this grants programme, we will support and strengthen the science and development behind blockchain and technology in general.”

Concordium believes credible participants in the blockchain industry must be responsible for driving change and building trust in the technology.

“The need is urgent,” said Lone Fønss Schrøder. “Failure to act risks delaying the broader adoption of the technology and will prevent businesses and consumers from benefiting from the potential blockchain and cryptocurrency offers.”

Concordium focuses on the requirements of developers and companies, taking into account future regulatory rules and doing so sustainably solves the problems that have so far prevented the widespread use of blockchain technology.

Concordium was founded by a non-profit Swiss foundation and is backed by a select group of respected academics and industry veterans. From its birth in 2018, it has combined the development of its own blockchain and cryptocurrency with a desire to help redefine the values upon which the industry has been associated.

The company’s combination of cutting-edge technology and commitment to a global rules-based system has attracted the interest of investors. Earlier this year, it successfully raised over USD 41m from private and strategic sales, valuing the company at USD4.45bn.

The Concordium Free & Open Grants Programme process is open to any developer or technology project eager to contribute to the Concordium and/or Rustlang ecosystems.

Applicants can find a list of areas in the Concordium Technology Stack that demand particular development here. The application is open to any developer or technology project, if you are interested you can apply here.
Grants are tracked transparently on GitHub and disbursed in Euros, US Dollars, or GTU, Concordium’s cryptocurrency.

About Concordium

Concordium is a Public and Sustainable Proof-of-Stake-blockchain with a unique Identity layer at the protocol level. Concordium differs from other participants by offering previously unseen guarantees of transparency, and regulation without compromising privacy by introducing built-in identity management at the protocol level and zero-knowledge proofs, which are used to replace anonymity with perfect privacy.

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Revolut Valued at $33B After a Fundraising Led by SoftBank And Tiger Capital

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[Featured Content]

Over the last few weeks, Flare Finance has announced support for several assets such as CSC, PAC, and XDC on their platform. These partnerships and integrations have raised the expectations of the platform users.

Before its launch, Flare Finance has shown how truly interoperable it is by bringing together several projects and their respective communities.

Flare Finance is not yet live and is expected to go live a month after Flare Network goes live, expected anytime in July.

Flare Finance has now announced support for Gitcoin (GTC) before the platform goes live. Once the platform goes live, the addition of any asset will be done via voting. This is the last asset to be integrated into the platform as Y-Assets. So far, Flare Finance has announced support for FLR, XRP, XLM, LTC, DOGE, ADA, ALGO, SHIB, SANSHU, CEL, TEL, BNB, CAKE, XDC, PAC, and CSC.

Final Integration

GTC is the final token to be integrated on Flare Finance before the platform goes live. Gitcoin is a renowned platform that strives to create infrastructure for the open internet. It has an active community of developers with diverse skill sets. Projects can post any requirement on the platform along with the amount they are willing to pay for the task. This gives them access to 311,668 active developers who can then work on the problem.

Gitcoin also funds projects that are building open-source ecosystems. They have already funded $24.3M to several projects. It uses quadratic funding, ensuring that projects that are doing the most outstanding public good get more support. Individual users who believe in any project have an opportunity to support such projects using Gitcoin. The developers also have multiple ways of earning, helping them become a life-long part of the community. Developers can earn through bounty, hackathons, or grant funding.

The platform also provides ample opportunities for learning from peers, hackathons, fellowships, and workshops. The platform enables top developers in the world to collaborate and connect to create open-source projects. Post its integration with Flare Finance, Gitcoin users will be able to use the GTC token on the platform. It will give them access to all the six products of Flare Finance. GTC users would be able to borrow stable coins against GTC or stake GTC to earn yield, and avail other benefits by being part of the ecosystem.

What Next?

Flare Finance is expected to launch with six products – FlareX, FlareFarm, FlareMine, FlareLoans, FlareWrap, and FlareMutual. All the assets on the platform will have the option to mint their assets on the other chain using FlareWrap. Communities of all these projects will also come on a single platform thereby opening newer avenues.

With the launch of Flare Finance nearing, the real potential of Flare Finance would be revealed soon.

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Japan to Implement Stricter Rules on Stablecoins: Report

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It was a tough week price-wise in the cryptocurrency market. The total capitalization lost around $100 billion as every single coin from the top 20 is in the red. Some lost more than others, but we’ll get to that later.

Kicking it off with Bitcoin. It had a relatively calm week, and even though it’s down about 3% over the period, it’s still not as bad as a lot of the altcoins. BTC was trading at around $34,000 last Friday, and apart from a brief positive spike on Monday, it was all downhill from there. Towards the beginning of the working week, the cryptocurrency started plummeting to reach as low as $31K. At the time of this writing, it’s trading at $31,900.

However, it’s worth noting that the range within which BTC is trading is getting thinner. As reported earlier in the week, the Bollinger Bands – an indicator measuring the price’s standard deviations relative to an SMA – are squeezing hard. This is a typical precursor to a huge move. The last time they were at the current rate was all the way back in October. At the time, the cryptocurrency was trading at about $10K, and there was a massive breakout to the upside that followed.

Another serious event that may explain why the market is so stagnant and indecisive right now is the massive unlock of GBTC shares. As CryptoPotato reported, this Sunday, the Grayscale Bitcoin Trust will unlock shares worth 16,240 BTC, and investors will be free to do with them whatever they see fit. Obviously, this is a serious quantity, and it could cause a serious deviation.

Stepping aside from Bitcoin, altcoins had it even worse. Ethereum is down 10%, Cardano – 10%, Dogecoin – 13.5%, Polkadot – 17.5, Solana – 17%, Polygon (MATIC) – 20%, and so forth. This had Bitcoin’s dominance increase to as much as 46.9% today – a 2% surge since last week.

In any case, it appears that we have turbulent times ahead of us, and it’s important to remain particularly vigilant, for what’s next – only time will tell.

Market Data

Market Cap: $1299B | 24H Vol: 66B | BTC Dominance: 46.9%

BTC: $31,882 (+-3.1%) | ETH: $1,905 (-10.4%) | XRP: $0.602 (-3.5%)

This Week’s Crypto Headlines You Better Not Miss

Michael Saylor Says He’s Not Forced to Sell MicroStrategy’s Bitcoin No Matter What. Michael Saylor, the CEO of MicroStrategy, said that regardless of how low the price of bitcoin goes, he won’t be forced to sell any BTC – whether his personal ones or those belonging to the company he runs.

China Situation Not as Bad, Bitcoin to Reclaim $60K In 2021: Interview with OKEx. In an exclusive interview with CryptoPotato, Lennix Lai, the director of financial markets at OKEx, said that the situation in China isn’t so bad. He also said that Bitcoin should be able to reclaim $60K this year.

Payments Platform Square Touts New DeFi Business Focusing on Bitcoin. Square, the popular mobile payments platform spearheaded by Twitter’s CEO – Jack Dorsey – is branching out with a new business venture that will be entirely focused on Bitcoin. It will host a platform for developers to create non-custodial and decentralized financial projects built around Bitcoin.

Cardano’s Alonzo White Hard Fork Successful, What’s Next? Alonzo’s testnet of the Cardano blockchain went through a successful hardfork dubbed Alonzo White. It is the second in a series of updates that will lead to the ultimate launch of the Alonzo mainnet in preparation for smart contracts on Cardano.

Visa and Mastercard Maintain Support for Binance Amid Regulatory Issues. Customers of Visa and Mastercard will still be able to operate with Binance. This comes as a relief amid the regulatory hurdles that the company is facing. Both payment processors said they are discussing the situation with Binance as well.

ECB Confirms Plans to Work on a Digital Euro, Syas It Will Be Greener Than Bitcoin. The European Central Bank (ECB) has confirmed its plans to work on a Digital Euro. The institution also said that its digital effort will be a lot ‘greener’ compared to Bitcoin and other cryptocurrencies.

Charts

This week we have a chart analysis of Bitcoin, Ethereum, Ripple, Cardano, and Polkadot – click here for the full price analysis.

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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.

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