Bitcoin: Virtual gets real
Hold on to your trousers and strap in tight, the biggest crypto story since Bletchley Park is back.
You may need to suspend a healthy portion of disbelief before you stick the hard-earned cash into an asset that’s based on play-play mining to generate a virtual token backed by nothing but thin air, but there’s no arguing with the numbers. After losing more than 60% of its value in 2022, bitcoin has come thundering back with a gain of more than 160% this year, outperforming any other asset class by a country mile.
Adding to crypto’s general mad hatter’s tea party feel, the recovery has really kicked off since the US secured the criminal prosecutions of two of the biggest names in the sector: Changpeng Zhao of Binance and Sam Bankman-Fried of FTX. Binance also picked up a $4.3bn fine for breaching money-laundering and financial sanctions laws and will make a “complete exit” from the US. True believers are betting that the worst of the regulatory chaos is over, and now the institutional investors will pile in.
Some are arguing that markets have regained an appetite for risk, on growing suspicion that the Federal Reserve is likely to start cutting interest rates sooner than it is indicating now. There’s also optimism that the US will give regulatory approval to spot bitcoin exchange traded funds, which would allow mainstream asset managers to offer crypto exposure to investors who have an appetite but would rather it didn’t come with a side helping of self-destructing exchanges and imploding digital wallets. It’s certain to be a bumpy ride.
Anglo American: Plumbing new depths
Anglo’s announcement of plans to cut costs by slashing mineral production resulted in the share price plummeting 19% in a day, cementing its position as the worst-performing of the large mining houses.
It also suggests that Mark Cutifani’s decision to hand the CEO’s baton to Duncan Wanblad in April 2022 may have been the best-timed retirement since Alastair Cook walked into the twilight at the Oval with a century in his final innings.
Wanblad is keen to stress his confidence in the long-term potential of Anglo’s portfolio, while positioning the company to handle short-term difficulties as effectively as possible. The company is targeting a further $500m of cost savings by the end of 2024 on top of the $500m it had already announced, and to lower capital expenditure between 2023 and 2026 by $1.8bn.
The group is struggling to cope with inflationary pressure across the board, as well as the weakness in the platinum group metals and diamond markets. Logistical issues in South Africa aren’t helping, with about 8Mt of iron ore stockpiled at Kumba due to the catastrophic nature of the rail network.
That all comes as the company is making a mighty big bet on building a crop nutrients business, investing $9bn in the Woodsmith project in Yorkshire that aims to shake up the farming world by producing polyhalite (which is used in fertilisers), rather than the potash that dominates the market today.
Anglo believes polyhalite offers significant improvements on potash in crop yields and that a market will develop once the mine’s in full production, helping an ever-growing global population to feed itself.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.