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Is Bitcoin Rally on Low Liquidity Sustainable?

Bitcoin has roared back to life, going by the 25% plus rally in October. The rally came after a long period of consolidation that saw the flagship cryptocurrency struggle to power through the critical $30,000 a coin level. Amid the recent blockbuster move, there are growing concerns about whether the rally is sustainable.

Bitcoin Liquidity Debacle

Unlike when Bitcoin exploded, supported by high liquidity, that appears not to be the case this time. The recent swings of more than 10% have come at the back of scarcity in liquidity, which is a point of concern if the crypto is to have any chance of powering to the $40,000 a coin level, let alone its all-time highs of $68,000.

Market depth is at its all-time lows, and institutional investors who had turned to crypto in the yesteryear have shunned it. In the spot market, the trading volumes across centralized and decentralized exchanges are at multi-year lows.

On the other hand, the total market capitalization for stablecoins has also been on the downtrend, shrinking significantly over the past few months. The decline should be a concern given that stablecoins market capitalization is often used to measure the health of liquidity in the crypto market.

Shrinking liquidity in the cryptocurrency sector could be attributed to institutional investors finding better investment options. The high-interest rate environment triggered by the US Federal Reserve’s aggressive interest rate hikes has made yields more attractive. Consequently, many investors pack their funds in assets that benefit from high-interest-rate environments like bonds and treasuries.

Bitcoin rallied to record highs of $68,000 a coin as it attracted strong bids from Tesla and Grayscale Investment holdings. In recent years, institutional investors have remained cautious about taking a position in the cryptocurrency.

The drop in liquidity came against the backdrop of the collapse of the FTX exchange, which rattled investor sentiments about cryptocurrencies. With the collapse, many investors started questioning the viability of the entire crypto asset class, going by the massive losses that came into being following the meltdown at FTX.

Bitcoin ETF

On the other hand, resurgence in Bitcoin trading activity in recent weeks has come on expectations of a Bitcoin exchange-traded fund. A Bitcoin exchange-traded fund could be the missing link in drawing more institutional investors into the fledgling flagship cryptocurrency. Such a product would only affirm its credibility in the mainstream sector.

Mid-last month, Bitcoin rallied by more than 16% daily as reports hit the wires, signaling that the US was on course to approve the much-awaited ETF. The crypto gave back most of the gains as BlackRock, one of the largest asset managers in the world, indicated its application for a Bitcoin ETF with the US Securities and Exchange Commission was yet to gain approval.

Nevertheless, Bitcoin regained its footing in the market, rallying to highs of $35,000 a coin after a ticker for a proposed BlackRock ETF fund was revealed. Since Bitcoin has exploded on the expectation of an ETF, the crypto could come down tumbling if no such product materializes in the coming weeks.

LONDON (Reuters) – Billionaire entrepreneur Elon Musk is expected to attend a global summit on artificial intelligence in Britain this week, according to a government official.

Britain is bringing together representatives of AI companies, political leaders and experts on Nov. 1-2 to discuss what some see as the risks posed by AI, with an aim of building an international consensus on its safe development.

Around 100 participants will discuss subjects including the unpredictable advances of AI and the potential for humans to lose control of it, according to the agenda.

While several world leaders, including U.S. Vice President Kamala Harris and President of the European Commission Ursula von der Leyen are due to attend the summit, the full guest list has not been made public.

“In conversation with @elonmusk after the AI Safety Summit Thursday night on @X,” British Prime Minister Rishi Sunak said on Musk’s social media platform X.

Sunak’s Downing Street office declined to comment.

(Reporting by Andrew MacAskill; editing by Michael Holden)

(Reuters) -Meta Platforms said on Monday it will offer users in Europe a subscription plan to use Facebook and Instagram without advertisements to comply with the European Union regulations.

The monthly subscription plans for users in the EU, European Economic Area and Switzerland, will cost 9.99 euros ($10.58) for web users, while iOS and Android users will have to shell out 12.99 euros a month.

The EU regulations threaten to curb Meta’s ability to personalize ads for users without their consent and hurt its major revenue source.

The world’s most popular social media network has been under antitrust pressure in the EU. In July, it lost its fight against a German data curb order as Europe’s top court backed the German antitrust watchdog’s power to also investigate privacy breaches.

Offering a choice between a free, ad-supported plan and an ad-free paid subscription might lead to users opting for the former, helping Meta to comply with the regulations without affecting its ad business.

Meta was fined 390 million euros earlier this year by Ireland’s Data Privacy Commissioner, and was told it cannot use the so-called “contract” as a legal basis to send users ads based on their online activity.

The company later said it intended to ask users in the EU for their consent before allowing businesses to target ads in order to address evolving regulatory requirements in the region.

($1 = 0.9446 euros)

(Reporting by Akash Sriram in Bengaluru; Editing by Shinjini Ganguli)

By Jonathan Saul

JERUSALEM (Reuters) – Israeli forces are moving slowly in their ground offensive in Gaza in part to keep open the possibility of drawing Hamas militants to negotiate the release of more than 200 hostages, military specialists consulted by Reuters said.

The relative caution with which Israeli troops have taken and secured slices of territory in the first days of sustained ground incursions in Gaza stands in contrast to the past three weeks of unrelenting air strikes on the Mediterranean enclave, as well as to Israel’s previous land offensives there.

Not going directly into Gaza’s most built up areas with the full force of Israel’s ground troops is simultaneously aimed at wearing Hamas’ leadership down with a long campaign, while leaving space for a possible deal over those held as hostages, according to the assessment of three Israeli security sources.

For a graphic and map of the ground assault click here.

Prime Minister Benjamin Netanyahu said last week that recovering the hostages was an “integral” part of the military’s goal in Gaza. Hamas, an armed Islamist group that governs Gaza, has so far released four civilians among the 239 believed to be held, many in a deep network of tunnels.

Troops freed an Israeli soldier from Hamas captivity during the ground operation in Gaza, the military said on Monday.

By moving slowly, the army also hoped to secure Israeli forces’ flanks and bait Hamas fighters to come out of the tunnels or denser urban areas and engage Israeli forces in open areas where they could be more easily killed, said a former senior commander who declined to be named.

An Israeli military spokesperson declined to comment on details of the offensive, citing sensitivity with the issue.

“It’s inch by inch, metre by metre, trying to avoid casualties and trying to kill as much as possible Hamas terrorists,” Amos Yadlin, former chief of Israel’s defence intelligence, told reporters.

Israel’s heavy response was prompted after Hamas fighters burst into Israel on Oct. 7, killing 1,400 people, mostly civilians, in the deadliest day of the nation’s 75-year history. Israel says 239 people were taken as hostages into Gaza, where they are believed to be held in Hamas’ extensive tunnel network.

In the three weeks since the Hamas attack, Israeli air strikes have pulverized large swathes of Gaza, killing more than 8,000 people including more than 3,000 children, according to the Hamas-run Gaza health ministry, and cutting off supplies of food, medicine and fuel.

Hamas leaders have said that a ceasefire is required in order to release civilian hostages, who Israel says include people with passports from 25 different countries.

In 2011, Hamas negotiated the release of over 1,000 Palestininan prisoners in Israel in return for one Israeli soldier.

Growing international distress at the conditions in Gaza led major powers last week to call on Israel to allow “humanitarian pauses” to get aid in and hostages out. Saying any lull in fighting would benefit Hamas, Israel rejected the calls, in the first public split between Israel and its allies since Oct. 7.

On Saturday, Benny Gantz, a former defense minister who is now in Netanyahu’s war cabinet, said “in this war there is no diplomatic ticking clock”.

Defence Minister Yoav Gallant said the war would be long and Israel was striking Hamas “above and underground – from the air, land and sea”.

Netanyahu on Saturday stopped short of calling the ground incursion a full scale invasion.

ENCIRCLING GAZA CITY

After amassing hundreds of thousands of soldiers, including reservists, on its border with Gaza, Israel made the first sustained ground incursions of the offensive on Friday.

The government has given the Israeli military two objectives – to dismantle Hamas, including its infrastructure and operational capabilities, and to bring home the hostages, chief spokesperson Rear Admiral Daniel Hagari said.

Backed by helicopters and drones, tanks and armoured personnel carriers have pushed into the semi-rural area to the north of Gaza City, the enclave’s main urban centre.

Forces have also entered south of the city, threatening Salah Al Deen Road, the main transport artery that runs the length of the 40-km long strip, local residents and the Hamas-affiliated Shehab news agency said on Monday.

The tanks met resistance on the road, according to fighters and residents. The Israeli military said it would not detail the positions of their forces.

Abu Ahmad, a senior spokesperson for Islamic Jihad, a smaller militant movement allied to Hamas, said Israeli forces had failed to make any sustained breakthrough, apart from pushing into open areas.

Hagari said more infantry and armoured forces backed by artillery and combat engineers had been sent in and were manoeuvring on the ground and engaging Hamas fighters. He declined to confirm any troop locations.

“The offensive activity will continue with determination and intensify according to the phases of the war and its goals,” he told a regular briefing on Monday.

TUNNEL DANGERS

Hamas’ deep network of Gaza tunnels has been described by security sources as an underground city that includes rocket launching sites, command centres and attack paths targeting Israel forces.

Omri Attar, a reserve major in a special operations brigade, said ground troops were also trained to locate air vents and escape hatches leading to tunnel openings and to place explosives inside to seal them off. He said other special units within the Combat Engineering Corps, which in the past have used robots and dogs, would deal with any fighting inside the tunnels.

“It is a very complicated situation, and I’m not talking about the number of dead or number of kidnapped, namely the infrastructure of the lower city, of the tunnels, is a very delicate situation,” he said.

On Oct 29, Israeli forces operating adjacent to the Erez crossing “identified a number of terrorists exiting the shaft of a tunnel in the Gaza Strip”.

“Following the identification, the soldiers confronted the terrorists, killing and injuring them,” the Israeli military said.

The approach so far is different from previous offensives on Gaza, a mostly urban strip of land home to 2.3 million people subjected to Israeli assaults in 2008, 2014 and in 2021 against Hamas and Islamic Jihad, which have sworn Israel’s destruction.

In 2008, Israeli military forces entered built-up areas with massive strength, prompting Hamas to pull back and engage periodically.

Israeli military forces are aware of the dangers with heavily built up areas in Gaza and the dangers of sending in broad forces.

Underscoring the risks, in 2008, Israel lost nine soldiers during its incursion. In 2014, the number killed soared to 66.

Since Oct. 7, 315 Israeli soldiers have been killed, most of them in the initial Hamas attacks, according to the latest data released by the Israeli military.

Ben Milch, who was a commander in 2014 with the Combat Engineering Corps and tasked with destroying tunnels, said their mission was not to go more than two kilometres into the network at the time.

“Where we only had to take out tens of tunnels, today’s challenge is going to be hundreds of tunnels and kilometres upon kilometres, and a real underground fortress that Hamas has built,” he told Reuters.

Clearing tunnels was also beset with other difficulties including hostages held as well as making decisions on whether to shut off ventilation shafts.

“In my opinion, that’s why the IDF (Israeli military) is taking a methodical, slower approach to make sure that they’re covering all their bases and making sure that they eliminate the tunnels as they go, so they’re not going to be ambushed from behind, from the side and so on,” Milch said.

“We don’t want to lose soldiers, so we’re going to go slow, and we’re going to make sure that we minimize casualties as best as possible.”

(Reporting by Jonathan Saul in Jerusalem, additional reporting by Nidal Al Mughrabi in Gaza; Editing by Frank Jack Daniel)

By Trevor Hunnicutt and Zeba Siddiqui

WASHINGTON (Reuters) – The White House is working to finalize as soon as Tuesday a new policy outlining how governments should respond to ransomware attacks, including sharing information on attackers and the accounts they use to collect ransoms, a senior administration official with knowledge of the matter said.

Ransomware is a type of cyberattack where hackers lock up a victim organization’s systems and demand ransom in exchange for unlocking it. It hits a range of industries every year, from schools and hospitals to critical infrastructure departments and the government. Analysts say ransomware attackers also increasingly steal sensitive data to extort victims.

The White House has long advised against paying ransoms and has been pushing other countries to make the same commitment.

During the third International Counter Ransomware Initiative, the administration will announce “significant” outcomes, including initiatives for sharing information on the ransomware attackers between counties.

“We’re committing to sharing bad wallets – wallets that are used to move illicit ransom funds – as well as a number of other related projects,” the official said.

Figuring out the scale of ransomware attacks can be tricky because many companies don’t report them. According to the data platform Statista, globally organizations detected 493.33 million ransomware attack attempts last year.

The criminals behind these hacks often used data from victims in one country to wage attacks on organizations in another country, which makes alliance across countries essential in fighting them, the official said.

A U.S.-led alliance aimed at tackling these threats now includes 50 countries – from Nigeria and Costa Rice to Singapore and South Korea – said the official, adding that the Interpol and the European Union were also part of it.

That geographical breath reflects the U.S. government belief that “we have to work to ensure that all the digital connectivity we rely on for our citizens is secure,” said the official.

(Reporting by Trevor Hunnicutt and Zeba Siddiqui; Editing by David Gregorio)

By Jeff Mason and Trevor Hunnicutt

(Reuters) -U.S. President Joe Biden is seeking to reduce the risks that artificial intelligence (AI) poses to consumers, workers, minority groups and national security with a new executive action on Monday.

The order, which he signed at the White House, requires developers of AI systems that pose risks to U.S. national security, the economy, public health or safety to share the results of safety tests with the U.S. government, in line with the Defense Production Act, before they are released to the public.

It also directs agencies to set standards for that testing and address related chemical, biological, radiological, nuclear, and cybersecurity risks.

“To realize the promise of AI and avoid the risk, we need to govern this technology,” Biden said. “In the wrong hands AI can make it easier for hackers to exploit vulnerabilities in the software that makes our society run.”

The move is the latest step by the administration to set parameters around AI as it makes rapid gains in capability and popularity in an environment of, so far, limited regulation. The order prompted a mixed response from industry and trade groups.

Bradley Tusk, CEO at Tusk Ventures, a venture capital firm with investments in tech and AI, welcomed the move. But he said tech companies would likely shy away from sharing proprietary data with the government over fears it could be provided to rivals.

“Without a real enforcement mechanism, which the executive order does not seem to have, the concept is great but adherence may be very limited,” Tusk said.

NetChoice, a national trade association that includes major tech platforms, described the order as an “AI Red Tape Wishlist,” that will end up “stifling new companies and competitors from entering the marketplace and significantly expanding the power of the federal government over American innovation.”

The new order goes beyond voluntary commitments made earlier this year by AI companies such as OpenAI, Alphabet and Meta Platforms, which pledged to watermark AI-generated content to make the technology safer.

As part of the order, the Commerce Department will “develop guidance for content authentication and watermarking” for labeling items that are generated by AI, to make sure government communications are clear, the White House said in a release.

The Group of Seven industrial countries on Monday will agree a code of conduct for companies developing advanced artificial intelligence systems, according to a G7 document.

A senior administration official, briefing reporters ahead of the official unveiling of the order, pushed back against criticism that Europe had been more aggressive at regulating AI than the United States.

The official said the White House believed that legislative action from Congress was also necessary for AI governance. Biden is calling on Congress to pass legislation in particular on data privacy, the White House said.

“While this is a good step forward, we need additional legislative measures,” Senator Mark Warner, a Democrat who chairs the Senate Select Committee on Intelligence, said in a statement.

U.S. officials have warned that AI can heighten the risk of bias and civil rights violations, and Biden’s executive order seeks to address that by calling for guidance to landlords, federal benefits programs and federal contractors “to keep AI algorithms from being used to exacerbate discrimination,” the release said.

The order also calls for the development of “best practices” to address harms that AI may cause workers, including job displacement, and requires a report on labor market impacts.

(Reporting by Jeff Mason and Trevor Hunnicutt; additional reporting by Alexandra Alper, Krystal Hu, Katie Paul, John Kruzel, David Shepardson and Diane Bartz; editing by Grant McCool, Jonathan Oatis, Bill Berkrot and Deepa Babington)

By David Shepardson

(Reuters) – The U.S. State Department said the last planned charter flight to help Americans depart Israel will leave Tuesday from Tel Aviv.

The U.S. government on Oct. 13 began chartering flights from Tel Aviv to Athens to help Americans depart Israel amid the ongoing conflict in the region. U.S. airlines have halted all flights to Israel and earlier this month added flights to Athens to help Americans return home. There are still other limited international commercial flights available from Tel Aviv, the State Department noted.

Demand for the flights has fallen sharply, which is prompting the end of the flights. State Department spokesperson Matthew Miller said Monday at a press briefing that a U.S. charter flight on Sunday had just five passengers.

“It is purely a demand issue… We have consistently seen the demand for our charter flights go down,” Miller said saying only about 25% of seats offered on U.S. charter flights have been filled by Americans and relatives seeking to leave Israel.

Miller said the State Department despite the end of the flights, it will continue to assess the situation and “whether circumstances change on the ground and if we need to make additional arrangements.”

(Reporting by David Shepardson; Editing by Chris Reese and Chizu Nomiyama)

By Erwin Seba

HOUSTON (Reuters) -Oil slipped more than 3% on Monday as fears eased that the Israel-Hamas war would disrupt supply from the region, and as investors grew cautious ahead of this week’s U.S. Federal Reserve meeting.

Brent crude futures settled at $87.45 a barrel, down $3.03, or 3.35%, while U.S. West Texas Intermediate crude finished at $82.31 a barrel, down $3.23, or 3.78%.

“The main feature here has been the market reacting to events between Israel and Hamas,” said Jim Ritterbusch, president of Ritterbusch & Associates.

“Macroeconomic factors could easily emerge later this week, when we’ll see if the Fed has something to say.”

Crude jumped 3% on Friday after Israel stepped up ground incursions into Gaza, stoking worries the conflict could expand in a region that accounts for a third of global oil output. However, that concern was fading on Monday, analysts said.

“The war premium has come out of the market,” said Phil Flynn, analyst at Price Futures Group. “It’s a situation where over the weekend the war seemed to intensify, but there seems to be no disruption to supply.”

Israeli troops and tanks attacked Gaza’s main northern city from the east and west on Monday, three days after it began ground operations in the Palestinian enclave.

“There is a propensity for market users in all their guises to have at least some oil length going into the weekends, and when the fear of conflict spread shows no validation… that fear hedge is ordinarily unwound,” said John Evans of oil broker PVM.

Investors are also focused on the outcome of Wednesday’s Federal Reserve meeting, as well as on what earnings from the likes of tech giant Apple Inc might indicate regarding the prospects for an economic slowdown.

The Fed is widely expected to keep interest rates unchanged, while the central banks of Britain and Japan are also set to review their policies this week.

Meanwhile German inflation eased in October, pointing to a substantial cooling in headline inflation in the euro zone.

China reports its October manufacturing and services PMIs this week, with investors looking out for more signs that the economy of the world’s top crude importer is stabilising.

On Monday the World Bank said it expected global oil prices to average $90 a barrel in the fourth quarter and $81 in 2023 as slowing growth eases demand, but warned that an escalation of the Middle East conflict could spike prices significantly higher.

(Reporting by Erwin Seba; Additional reporting by Alex Lawler Natalie Grover, Mohi Narayan and Florence Tan; Editing by Jason Neely, Jonathan Oatis and Jan Harvey)

(Reuters) – The FedEx Master Executive Council, the governing body of the delivery firm’s unit in the Air Line Pilots Association (ALPA), said on Monday it had elected a new interim chair after union members rejected a tentative contract with the company in July.

ALPA elected Billy Wilson last week to serve as interim chair through March 2025, replacing Chris Norman, who was instrumental in shaping the tentative agreement that union members voted down over pay and job security issues.

The union represents 6,000 pilots at FedEx, which did not immediately respond to a request for comment.

“I am committed to bringing all of our pilots together as we reestablish negotiations,” Wilson said in a statement.

Wilson called for compensation that is commensurate with pilots at other airlines, where commercial pilots have won significant raises, reflecting their bargaining power in an era of staff shortages.

Wilson said FedEx pilots transported vital goods when businesses shut down in the early days of the COVID pandemic.

“We paid a heavy price for this while the company made historic profits,” he said, adding that quality of life, work rules and retirement are also key issues for ALPA members.

The tentative FedEx deal rejected by pilots included a 30% pay rise and a 30% increase to their legacy pensions.

American Airlines pilots, represented by the Allied Pilots Association (APA), in August ratified a deal that raises their compensation by more 46% over the four-year duration of their contract.

(Reporting by Priyamvada C in Bengaluru and Lisa Baertlein in Los Angeles; Editing by Devika Syamnath and Alexander Smith)

By Ananya Mariam Rajesh and Aishwarya Venugopal

(Reuters) – In a strong quarter for earnings, the big consumer stocks have shone even brighter, thanks to results from McDonald’s, Chipotle Mexican Grill and others that rank among the biggest surprises of the reporting cycle so far.

Roughly half of the S&P 500 companies have reported results thus far, with more than 77% exceeding results. But of that group, consumer discretionary companies have been the biggest surprise, on average exceeding earnings-per-share estimates by 19%, according to LSEG I/B/E/S data.

Consumer-facing companies have benefited from maintaining higher selling prices and a steady drop-off in raw material costs that have helped boost profit margins.

Discretionary stocks have performed strongly in 2023, proving their resilience at a time when the expectations of a U.S. economic slowdown run high. A 4.9% rise in U.S. gross domestic product in the third quarter further highlights the health of the consumer.

Including Monday’s gains, the S&P 500 consumer discretionary index is up nearly 19% this year, far outperforming the broader S&P 500, which is up nearly 8%.

“The results suggest that investors continue to see the sector as a ballast in uncertain times, which we believe is supported by generally sound fundamentals underlying the health of the U.S. consumer,” said Jason Benowitz, CI Roosevelt senior portfolio manager.

McDonald’s benefited from falling wholesale costs, as its per-share earnings came in at an adjusted $3.19, compared with consensus estimates for $3 a share. The company said falling costs of commodities like vegetables and proteins helped margins.

On the whole, 251 S&P 500 companies have reported results, with 77.7% coming in above analyst expectations, compared with an average of 67% in a typical quarter, according to LSEG data.

Among the other consumer discretionary names that have surpassed expectations are Amazon, Hilton Worldwide Holdings and Royal Caribbean.

“(What) we’re noticing about people making higher wages and as wages go up, they’re spending almost all of that increase,” said Brian Mulberry, client portfolio manager at Zacks Investment Management. “That would reflect for us a pretty high level of confidence from the consumer.”

While most companies flagged the resilience of consumer demand, some analysts also said expectations were low heading into the third quarter as the side effects of still-high inflation lingered.

“I don’t think consumer spending drove these beats. I think it was more pricing and a resilient consumer, ones that were able to take this rate at a time when discretionary income is under pressure,” Wedbush analyst Gerald Pascarelli said.

(Reporting by Aishwarya Venugopal and Ananya Mariam Rajesh in Bengaluru; Editing by Anil D’Silva)