Bitcoin is about to boost the world’s third-largest economy, Nomura Holdings Inc analysts said.
The digital coin’s 1,500 percent rally this year has left cryptocrazed Japanese investors likely sitting on hefty gains that Nomura thinks will spur consumer spending.
“Rises in asset values often result in a rise in consumer spending, too, known as the wealth effect,” the team, led by Yoshiyuki Suimon, wrote on Friday.
“We estimate the wealth effect from unrealized gains on bitcoin trading by Japanese investors since the start of fiscal year 2017 and estimate a potential boost to consumer spending of ¥23.2 [billion] to ¥96.0 billion [US$206 million to US$852 million],” Suimon wrote.
The note said that trading volume in the bitcoin market is about 40 percent yen, which is larger than even the US dollar’s share.
Bitcoin has fallen about 25 percent since closing in on US$20,000 on Dec. 18, when CME Group Inc introduced its futures contract.
While bitcoin’s debut on regulated derivatives exchanges in Chicago was thought to have given it a new mainstream channel for investors to tap, so far trading volume has been limited. The digital currency traded at about US$14,500 in New York on Friday afternoon.
The South Korean government has been among the loudest voices of concern about a possible speculative bubble in the largest cryptocurrency.
The nation is something of a bellwether for global demand, with South Koreans paying premiums of about 20 percent over prevailing international rates as of Friday.
Still, Nomura is confident that the share of investors who have benefited is much larger than those who might have lost money due to the recent decline.
“Moreover, the fact that the rise in bitcoin prices was concentrated in 2017 fourth quarter could result in the wealth effect materializing in 2018 first quarter, and if that is the case, we estimate a potential boost to real GDP growth on an annualized quarter over quarter basis of up to about 0.3 percentage points,” Nomura said.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to