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Miners in Europe Gear Up for Bitcoin Halving, but Energy Costs Still a Barrier

Miners in Europe Gear Up for Bitcoin Halving, but Energy Costs Still a Barrier

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As the halving approaches, miners in Europe face a serious challenge: Can they survive the event, and will the industry thrive post-halving?

As the Bitcoin halving approaches, miners across the world have been forced to make adjustments in order to adapt. The halving will see Bitcoin’s (BTC) production cost double overnight, but luckily the cryptocurrency has been reacting positively to the upcoming event.

While almost everyone in crypto is bullish about the event, and with good reason, the path ahead for Bitcoin’s price post-halving is unknown, especially given the coronavirus pandemic and the massive wave of unemployment that has come with it. While it may be a stressful event for holders of Bitcoin, it is even more so for those that have made it their business to produce Bitcoin: the miners.

For Bitcoin miners in countries with subsidized electricity such as Venezuela or low electricity prices such as China, where most of the hashing power on the Bitcoin network resides, a production cost increase can prove manageable. Even those with medium-range prices but geared with the latest mining equipment are prepared. But for those in the higher electricity brackets, such as the ones found in Europe, their operations may rely heavily on Bitcoin’s post-halving price action.

European miners prepare for the halving

So, here is how miners in Europe, where electricity prices are some of the highest in the world, have prepared for the halving.

While some may indeed be forced to shut down if the price doesn’t go their way, miners have known about the halving for a long time and have been able to prepare for the event. According to Jake Stott, a member of the founding board of dGen — a Berlin-based think tank that recently surveyed many key European players in the industry — miners have had the opportunity to upgrade:

“The great thing about the Bitcoin Halvening is that it is a known revenue shock. Miners will have been preparing for this day since the last halvening for years ago. Upgrading to the latest machines, newest infrastructure, sourcing cheaper power sources and pooling together with the right group are all key. Miners are well prepared for all scenarios regarding the Bitcoin price.”

While having the most up-to-date equipment and infrastructure is important, it will only do so much. Youssef El Manssouri, the co-founder and CEO of Sesterce — a French company providing mining services — told Cointelegraph:

“It is very complicated to anticipate what will happen after the halving, the most logical thing seems to be to prepare the worst case scenario by trying to negotiate the electrical contracts and renewing the fleet of machines. This is what we have been doing at Sesterce for several months in anticipation.”

Equipment upgrades and cheap electricity sourcing through partnerships are the first steps for miners in Europe, but there are also other solutions that can prepare them for the volatility that may grab hold after the halving, including hedging strategies and credit accruement. According to Antoni Trenchev, the co-founder of crypto credit issuer Nexo, this is already happening in the region. He told Cointelegraph:

“There is a growing array of financial instruments available for digital asset management and with that — a set of services specifically catering to miners’ needs. Notable examples of these center on miners locking in an average selling price into the future or insuring against hashrate changes via upcoming hashrate derivatives. Miners form a sizable portion of Nexo’s client base and many of them opt for our standard crypto-backed credit line to maintain and grow their operations or cash in on newly minted BTCs.”

The future of mining in Europe

Although miners in Europe are doing their best to cope with the halving, the event brings the long-term viability of mining under question. Can the activity be sustained in Europe? Will co-location become the norm? Or can companies and governments in the region begin to compete with other countries where mining is becoming a full-blown industry? El Manssouri believes that Europe can be competitive:

“We are seeing more and more European countries understanding mining and the underlying sovereignty issues. We have large power plants in Europe that are producing a lot of losses and a lot of lost revenue, and it's up to us to make sure that we make up for those losses in the mining and power industry so that in the long term Europe can do well.”

Leveraging excess power and renewable energy may be the answer for the European mining industry, and this is something that is already happening, according to Whit Gibbs, the host of the mining-centric podcast Hashr8. But there may also be an answer in different forms of mining other than Bitcoin. Gibbs told Cointelegraph:

“Despite not getting as much attention nowadays, parts of Europe are still great for mining. Iceland and Sweden seem to be the most popular facility locations. I've heard there are German power producers who have begun mining with their excess energy, much like producers in the States are doing. Interestingly enough, some of them are not exclusively mining Bitcoin but are outfitting GPU and FPGA facilities to capitalize on more speculative mining plays.”

There are also other advantages that extend far beyond electricity cost and quality. When it comes to a nascent industry such as cryptocurrency mining, regulation is a decisive factor. A ban on crypto mining can put miners out of business in a blink of an eye, so the government’s outlook on mining and cryptocurrencies as a whole is quite important. According to Gibbs, “Europe is far more receptive to bitcoin and crypto, than other places where energy is cheaper and this may be a decisive factor.”

In fact, regulation and political stability have been the main strengths cited by miners and other industry players that Cointelegraph spoke too in the region. Some believe this factor is so important that it can even make Europe one of the most attractive places for industrial miners, as Stott told Cointelegraph:

“I would say Europe is one of the most viable markets long term for the mining industry. Political stability is key to this industry and as larger and larger sums of money are invested into the space many will look at Europe for their mines.”

Political stability and a generally positive outlook on crypto are great, but they are somewhat worthless if they don’t translate into palpable benefits for miners. Luckily for those that are pursuing mining in Europe, initiatives such as the tax breaks introduced by Portugal for cryptocurrency issuers are beginning to pop up. Stott added:

“It is clear that this kind of initiative can only encourage people in this direction, Portugal seems to have a more innovation-oriented policy recently and we can only congratulate them on this, but in order to be a truly competitive choice in the eyes of large mining infrastructures, it will be essential to be able to offer multi-MegaWatt contracts at prices as competitive as in Texas or China.”

Piecing it together

So, from alternative electricity sourcing to government incentives, Europe has a lot of positive factors that can be easy to overlook, which means miners should be able to survive a bearish post-halving Bitcoin. But the issue with the cost of electricity is still a fundamental barrier. Gibbs also noted that the steep prices don’t apply just to electricity:

“Europe is still cost-prohibitive for mining in most places, according to my sources. While there may be pockets of opportunity, it is difficult to find cheap, sustainable power. There's not the widespread excess production we see in the U.S., CIS countries, and China. Equipment pricing also skews high, especially for GPUs.”

While the most obvious answer for miners may lie in countries such as China or Russia where electricity is cheaper, other alternatives are becoming increasingly attractive. As Matt D’Souza, the CEO of the United States-based mining company Blockware Solutions, told Cointelegraph, this is the case with the U.S., which has found a perfect balance between low-to-medium electricity prices and political and regulatory stability, adding:

“The U.S. has excellent stability and redundancy. Switzerland had a drought in 2017/2018 and the hydro power rates increased unsustainably for one of my large clients. Areas with cheaper power are more governmentally unstable and uncertain. The U.S. has certainty with the government, regulation, and electricity rates, exceptional redundancy with internet and power. The U.S. is the most energy abundant country in the world.”

When piecing all the factors together, the mining industry in Europe has a bumpy road ahead. But if the right choices are made, it can become very competitive. Nevertheless, it still has to catch up to other countries such as China or even the U.S., which is beginning to look like the most attractive option for large-scale miners.

Related: BTC Miners Expect Bitcoin Price to Surpass $12K After Reward Halving

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Analyst reviews Apple stock price target amid challenges

Here’s what could happen to Apple shares next.

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They said it was bound to happen.

It was Jan. 11, 2024 when software giant Microsoft  (MSFT)  briefly passed Apple  (AAPL)  as the most valuable company in the world.

Microsoft's stock closed 0.5% higher, giving it a market valuation of $2.859 trillion. 

It rose as much as 2% during the session and the company was briefly worth $2.903 trillion. Apple closed 0.3% lower, giving the company a market capitalization of $2.886 trillion. 

"It was inevitable that Microsoft would overtake Apple since Microsoft is growing faster and has more to benefit from the generative AI revolution," D.A. Davidson analyst Gil Luria said at the time, according to Reuters.

The two tech titans have jostled for top spot over the years and Microsoft was ahead at last check, with a market cap of $3.085 trillion, compared with Apple's value of $2.684 trillion.

Analysts noted that Apple had been dealing with weakening demand, including for the iPhone, the company’s main source of revenue. 

Demand in China, a major market, has slumped as the country's economy makes a slow recovery from the pandemic and competition from Huawei.

Sales in China of Apple's iPhone fell by 24% in the first six weeks of 2024 compared with a year earlier, according to research firm Counterpoint, as the company contended with stiff competition from a resurgent Huawei "while getting squeezed in the middle on aggressive pricing from the likes of OPPO, vivo and Xiaomi," said senior Analyst Mengmeng Zhang.

“Although the iPhone 15 is a great device, it has no significant upgrades from the previous version, so consumers feel fine holding on to the older-generation iPhones for now," he said.

A man scrolling through Netflix on an Apple iPad Pro. Photo by Phil Barker/Future Publishing via Getty Images.

Future Publishing/Getty Images

Big plans for China

Counterpoint said that the first six weeks of 2023 saw abnormally high numbers with significant unit sales being deferred from December 2022 due to production issues.

Apple is planning to open its eighth store in Shanghai – and its 47th across China – on March 21.

Related: Tech News Now: OpenAI says Musk contract 'never existed', Xiaomi's EV, and more

The company also plans to expand its research centre in Shanghai to support all of its product lines and open a new lab in southern tech hub Shenzhen later this year, according to the South China Morning Post.

Meanwhile, over in Europe, Apple announced changes to comply with the European Union's Digital Markets Act (DMA), which went into effect last week, Reuters reported on March 12.

Beginning this spring, software developers operating in Europe will be able to distribute apps to EU customers directly from their own websites instead of through the App Store.

"To reflect the DMA’s changes, users in the EU can install apps from alternative app marketplaces in iOS 17.4 and later," Apple said on its website, referring to the software platform that runs iPhones and iPads. 

"Users will be able to download an alternative marketplace app from the marketplace developer’s website," the company said.

Apple has also said it will appeal a $2 billion EU antitrust fine for thwarting competition from Spotify  (SPOT)  and other music streaming rivals via restrictions on the App Store.

The company's shares have suffered amid all this upheaval, but some analysts still see good things in Apple's future.

Bank of America Securities confirmed its positive stance on Apple, maintaining a buy rating with a steady price target of $225, according to Investing.com

The firm's analysis highlighted Apple's pricing strategy evolution since the introduction of the first iPhone in 2007, with initial prices set at $499 for the 4GB model and $599 for the 8GB model.

BofA said that Apple has consistently launched new iPhone models, including the Pro/Pro Max versions, to target the premium market. 

Analyst says Apple selloff 'overdone'

Concurrently, prices for previous models are typically reduced by about $100 with each new release. 

This strategy, coupled with installment plans from Apple and carriers, has contributed to the iPhone's installed base reaching a record 1.2 billion in 2023, the firm said.

More Tech Stocks:

Apple has effectively shifted its sales mix toward higher-value units despite experiencing slower unit sales, BofA said.

This trend is expected to persist and could help mitigate potential unit sales weaknesses, particularly in China. 

BofA also noted Apple's dominance in the high-end market, maintaining a market share of over 90% in the $1,000 and above price band for the past three years.

The firm also cited the anticipation of a multi-year iPhone cycle propelled by next-generation AI technology, robust services growth, and the potential for margin expansion.

On Monday, Evercore ISI analysts said they believed that the sell-off in the iPhone maker’s shares may be “overdone.”

The firm said that investors' growing preference for AI-focused stocks like Nvidia  (NVDA)  has led to a reallocation of funds away from Apple. 

In addition, Evercore said concerns over weakening demand in China, where Apple may be losing market share in the smartphone segment, have affected investor sentiment.

And then ongoing regulatory issues continue to have an impact on investor confidence in the world's second-biggest company.

“We think the sell-off is rather overdone, while we suspect there is strong valuation support at current levels to down 10%, there are three distinct drivers that could unlock upside on the stock from here – a) Cap allocation, b) AI inferencing, and c) Risk-off/defensive shift," the firm said in a research note.

Related: Veteran fund manager picks favorite stocks for 2024

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Major typhoid fever surveillance study in sub-Saharan Africa indicates need for the introduction of typhoid conjugate vaccines in endemic countries

There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high…

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There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high burden combined with the threat of typhoid strains resistant to antibiotic treatment calls for stronger prevention strategies, including the use and implementation of typhoid conjugate vaccines (TCVs) in endemic settings along with improvements in access to safe water, sanitation, and hygiene.

Credit: IVI

There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high burden combined with the threat of typhoid strains resistant to antibiotic treatment calls for stronger prevention strategies, including the use and implementation of typhoid conjugate vaccines (TCVs) in endemic settings along with improvements in access to safe water, sanitation, and hygiene.

 

The findings from this 4-year study, the Severe Typhoid in Africa (SETA) program, offers new typhoid fever burden estimates from six countries: Burkina Faso, Democratic Republic of the Congo (DRC), Ethiopia, Ghana, Madagascar, and Nigeria, with four countries recording more than 100 cases for every 100,000 person-years of observation, which is considered a high burden. The highest incidence of typhoid was found in DRC with 315 cases per 100,000 people while children between 2-14 years of age were shown to be at highest risk across all 25 study sites.

 

There are an estimated 12.5 to 16.3 million cases of typhoid every year with 140,000 deaths. However, with generic symptoms such as fever, fatigue, and abdominal pain, and the need for blood culture sampling to make a definitive diagnosis, it is difficult for governments to capture the true burden of typhoid in their countries.

 

“Our goal through SETA was to address these gaps in typhoid disease burden data,” said lead author Dr. Florian Marks, Deputy Director General of the International Vaccine Institute (IVI). “Our estimates indicate that introduction of TCV in endemic settings would go to lengths in protecting communities, especially school-aged children, against this potentially deadly—but preventable—disease.”

 

In addition to disease incidence, this study also showed that the emergence of antimicrobial resistance (AMR) in Salmonella Typhi, the bacteria that causes typhoid fever, has led to more reliance beyond the traditional first line of antibiotic treatment. If left untreated, severe cases of the disease can lead to intestinal perforation and even death. This suggests that prevention through vaccination may play a critical role in not only protecting against typhoid fever but reducing the spread of drug-resistant strains of the bacteria.

 

There are two TCVs prequalified by the World Health Organization (WHO) and available through Gavi, the Vaccine Alliance. In February 2024, IVI and SK bioscience announced that a third TCV, SKYTyphoid™, also achieved WHO PQ, paving the way for public procurement and increasing the global supply.

 

Alongside the SETA disease burden study, IVI has been working with colleagues in three African countries to show the real-world impact of TCV vaccination. These studies include a cluster-randomized trial in Agogo, Ghana and two effectiveness studies following mass vaccination in Kisantu, DRC and Imerintsiatosika, Madagascar.

 

Dr. Birkneh Tilahun Tadesse, Associate Director General at IVI and Head of the Real-World Evidence Department, explains, “Through these vaccine effectiveness studies, we aim to show the full public health value of TCV in settings that are directly impacted by a high burden of typhoid fever.” He adds, “Our final objective of course is to eliminate typhoid or to at least reduce the burden to low incidence levels, and that’s what we are attempting in Fiji with an island-wide vaccination campaign.”

 

As more countries in typhoid endemic countries, namely in sub-Saharan Africa and South Asia, consider TCV in national immunization programs, these data will help inform evidence-based policy decisions around typhoid prevention and control.

 

###

 

About the International Vaccine Institute (IVI)
The International Vaccine Institute (IVI) is a non-profit international organization established in 1997 at the initiative of the United Nations Development Programme with a mission to discover, develop, and deliver safe, effective, and affordable vaccines for global health.

IVI’s current portfolio includes vaccines at all stages of pre-clinical and clinical development for infectious diseases that disproportionately affect low- and middle-income countries, such as cholera, typhoid, chikungunya, shigella, salmonella, schistosomiasis, hepatitis E, HPV, COVID-19, and more. IVI developed the world’s first low-cost oral cholera vaccine, pre-qualified by the World Health Organization (WHO) and developed a new-generation typhoid conjugate vaccine that is recently pre-qualified by WHO.

IVI is headquartered in Seoul, Republic of Korea with a Europe Regional Office in Sweden, a Country Office in Austria, and Collaborating Centers in Ghana, Ethiopia, and Madagascar. 39 countries and the WHO are members of IVI, and the governments of the Republic of Korea, Sweden, India, Finland, and Thailand provide state funding. For more information, please visit https://www.ivi.int.

 

CONTACT

Aerie Em, Global Communications & Advocacy Manager
+82 2 881 1386 | aerie.em@ivi.int


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US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever… And Debt Explodes

US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever… And Debt Explodes

Earlier today, CNBC’s…

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US Spent More Than Double What It Collected In February, As 2024 Deficit Is Second Highest Ever... And Debt Explodes

Earlier today, CNBC's Brian Sullivan took a horse dose of Red Pills when, about six months after our readers, he learned that the US is issuing $1 trillion in debt every 100 days, which prompted him to rage tweet, (or rageX, not sure what the proper term is here) the following:

We’ve added 60% to national debt since 2018. Germany - a country with major economic woes - added ‘just’ 32%.   

Maybe it will never matter.   Maybe MMT is real.   Maybe we just cancel or inflate it out. Maybe career real estate borrowers or career politicians aren’t the answer.

I have no idea.  Only time will tell.   But it’s going to be fascinating to watch it play out.

He is right: it will be fascinating, and the latest budget deficit data simply confirmed that the day of reckoning will come very soon, certainly sooner than the two years that One River's Eric Peters predicted this weekend for the coming "US debt sustainability crisis."

According to the US Treasury, in February, the US collected $271 billion in various tax receipts, and spent $567 billion, more than double what it collected.

The two charts below show the divergence in US tax receipts which have flatlined (on a trailing 6M basis) since the covid pandemic in 2020 (with occasional stimmy-driven surges)...

... and spending which is about 50% higher compared to where it was in 2020.

The end result is that in February, the budget deficit rose to $296.3 billion, up 12.9% from a year prior, and the second highest February deficit on record.

And the punchline: on a cumulative basis, the budget deficit in fiscal 2024 which began on October 1, 2023 is now $828 billion, the second largest cumulative deficit through February on record, surpassed only by the peak covid year of 2021.

But wait there's more: because in a world where the US is spending more than twice what it is collecting, the endgame is clear: debt collapse, and while it won't be tomorrow, or the week after, it is coming... and it's also why the US is now selling $1 trillion in debt every 100 days just to keep operating (and absorbing all those millions of illegal immigrants who will keep voting democrat to preserve the socialist system of the US, so beloved by the Soros clan).

And it gets even worse, because we are now in the ponzi finance stage of the Minsky cycle, with total interest on the debt annualizing well above $1 trillion, and rising every day

... having already surpassed total US defense spending and soon to surpass total health spending and, finally all social security spending, the largest spending category of all, which means that US debt will now rise exponentially higher until the inevitable moment when the US dollar loses its reserve status and it all comes crashing down.

We conclude with another observation by CNBC's Brian Sullivan, who quotes an email by a DC strategist...

.. which lays out the proposed Biden budget as follows:

The budget deficit will growth another $16 TRILLION over next 10 years. Thats *with* the proposed massive tax hikes.

Without them the deficit will grow $19 trillion.

That's why you will hear the "deficit is being reduced by $3 trillion" over the decade.

No family budget or business could exist with this kind of math.

Of course, in the long run, neither can the US... and since neither party will ever cut the spending which everyone by now is so addicted to, the best anyone can do is start planning for the endgame.

Tyler Durden Tue, 03/12/2024 - 18:40

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