💩 shit crypto?
New solution to the crypto problem, G-7's big tech tax is coming, and some more updates.
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Read Time: 910 words, 4:33 minutes.
There’s so much to cover today so let’s get started.
First up,
Market Snapshot 📈
Sensex: 52,300.47 (+0.69%) ↑
Nifty 50: 15,737.75 (+0.65%) ↑
Dow Jones: 34,447.14 (-0.44%) ↓
Nasdaq 100: 13,814.94 (+0.030%) ↑
Bitcoin: $37,814.66
Top Stories 📰
1. Nah, shit-powered crypto 🤯
Indeed.
Philip Hughes, a farmer who resides near the Berwyn mountain range in Denbighshire, Wales, is using his resources to solve cryptocurrencies' most pressing problem. Hughes is utilizing the energy produced from his "cow muck" to power his computers for mining cryptocurrency by something called "anaerobic digestion."
How does it work? It's a process wherein microbes break down the manure into methane in the absence of oxygen. Hughes uses a giant six-cylinder engine that converts this methane into electricity. The remainder of the waste is then used as manure.
While two-thirds of the power generated via this process is allocated for farming activities, the remaining is used for mining cryptocurrencies. These rigs consist of powerful GPUs that are currently mining Ethereum.
Hughes' mining business has seen growing popularity in the region, as he's also leasing his rigs to firms like Easy Crypto Hunter — a Manchester-based company that approaches small renewable electricity generators and sell/host their mining rigs to others.
However, some critics like financial economist Alex de Vries have questioned the utility of cryptocurrencies, saying that all mining activities are a waste of green energy. "The utility these systems can have is inherently extremely limited," he added.
Why it matters? The energy consumption debate surrounding virtual currencies has recently gained mainstream momentum after big crypto influencers like Elon Musk raised concerns about growing greenhouse gas emissions involved in mining activities. Additionally, increasing regulatory scrutiny and ransomware-related attacks have further intensified cryptocurrencies' decline.
2. India’s equity funds are thriving 🚀
Monthly AMFI data shows that in May, equity funds saw a net inflow (investments exceeding redemptions) of Rs 10,082 crore, making it the third consecutive month when the buoyant stock market attracted more investors resulting in the surge.
But this growing enthusiasm wasn't just limited to equities. The inflows in equity mutual fund schemes reached a 14-month high at Rs 10,083 crore in May. This figure stood at Rs 11,723 crore in March 2020, after which it continued to decline later as India faced its first coronavirus wave that led to a sharp sell-off in stock markets.
Despite bond funds reporting net outflows of Rs 44,512 crore in May against the net inflows of Rs 1,00,903 crore last month, the assets under management (AUM) grew from Rs 32.37 lakh crore in April to Rs 33.05 lakh crore in May. These outflows are mainly attributed to corporate funding requirements, although they historically do not occur in May.
Tell me why? In the last three months, domestic institutional investors and retail investors mostly acted as buyers, while the foreign institutional investors resorted to selling. Declining coronavirus infections, good quarterly results, and positive long-term earnings growth forecasts boosted investor confidence and prompted them to allocate their capital towards equities.
Why it matters? As India's stock market continues on its upward trajectory, some managers like ICICI's Sankaran Naren are counting on the "attractive" business cycle to make big bets in equities.
3. It's a loong, bumpy ride ahead 🚗
Last week, the Group of Seven wealthy nations agreed to support a 15% global minimum tax that would allow them to allocate taxes from the world's 100 most profitable companies to regions where they operate. However, there's still a long way to go before its implementation.
But wait, what is the G-7? It's an organization constituting government leaders from Canada, France, Germany, Italy, Japan, Britain, and the US who gather to discuss the world's most pressing concerns. This year, the summit is being in London, where G-7 discusses global tax for big tech firms and actions to fight climate change.
Once they reach a consensus, the reform will need further approval from the Group of 20 developed and emerging nations set to meet in July and then from a coalition of 137 countries convened by the Organization for Economic Cooperation and Development (OECD).
What are the arguments? The reform would diminish the incentive for companies to establish subsidiaries in tax havens and compel them to make up for the fewer taxes paid in the home countries. If the 15% base rate prevails, the effect will hugely depend on how countries implement the change. Additionally, nations with lower tax rates like Switzerland and Ireland have said they'd take necessary action to appear attractive to companies.
Why it matters? While the deal is certainly a historic move, its impact is quite "unfair" for the developing nations. Since most multinational companies are in G-7 countries, more than 60% of the estimated $275 billion of additional revenue generated will go to them despite accounting for only 10% of the world's population.
Top Reads 📑
More than 1,100 people arrested in China in crypto-linked money laundering schemes.
Cloud technology is driving huge innovation in America's healthcare sector.
Fastly failure: How a customer caused a slew of websites to go offline by changing their settings.
Meat supplier JBS paid $11 million in Bitcoin ransomware attack, just two weeks after Colonial Pipeline.
GameStop is being probed by the SEC over price volatility concerns.
Tweet Of The Day 🌟
Adani Group is planning to take its food and airport businesses public. Keep an eye out guys!
Well, that's all from us. Until next time 👋
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