Bitcoin rises towards record high; SEC ‘investigating if OpenAI investors were misled’ – business live | Business

In the City… shares in Ocado have jumped almost 7% in early trading after the grocery technology firm narrowed its losses.

Ocado has reported it made a pre-tax loss of £394m in 2023, up from a £500m loss in 2022.

Revenues rose almost 10% to £2.8bn, led by its Technology Solutions arm which sells robotic grocery warehouse kit worldwide.

Tim Steiner, CEO of Ocado Group, says the company made “good progress” last year, adding:

Our technology is transforming the way people shop for food as we help some of the world’s best and most innovative retailers set the bar for excellence in grocery ecommerce worldwide.

We opened three new state-of-the-art robotic CFCs; in Chiba city (near Tokyo) in Japan, Calgary in Canada, and Luton here in the UK and increased the amount of installed capacity for our clients by a quarter. We now have installed capacity at our retail partners for gross annual grocery sales of over £8bn.

On an EBITDA basis (ignoring interest, tax, and the depreciation and amortisation of assets), Ocado made a profit of £54m, up from a £74m EBITDA loss in 2022.

With the UK budget less than a week away, chancellor Jeremy Hunt is reportedly considering scrapping Britain’s non-domiciled tax rules.

The non-dom status allows about 70,000 people to avoid paying tax on their overseas earnings.

Several newspapers report that Hunt has put abolishing non-doms on a list of options being held in reserve in case his fiscal position deteriorates.

Hunt is under serious pressure from backbench Conservative MPs to announce tax cuts next week; his problem is that his fiscal firepower has been shrinking. That’s because the City has cut its expectations for interest rate cuts in the future, which means Hunt’s headroom to splash the cash and still see debt falling in five years has fallen.

More here.

Scrapping non-dom status would be a u-turn for Hunt; he has previously argued that it’s in the UK’s interest for the super-rich to stay and spent their money here.

It would also potentially mess up the Labour Party’s plans; it hopes to raise £2bn by scrapping non-dom tax breaks to fund the NHS and primary school breakfast clubs.

FOMO, or fear of missing out, is another factor driving bitcoin higher, says Ipek Ozkardeskaya, senior analyst at Swissquote.

Ozkardeskaya explains:

The coin’s price is rising exponentially since the week started; a unit of Bitcoin traded at $64’000 per coin yesterday. That’s around $5K shy of the ATH recorded back in 2021, and the strength of the rally makes us think that there is rising FOMO aiming the $100K mark.

Of course, I am not saying that Bitcoin will rally straight to that level, but enthusiasm will clearly be back if Bitcoin successfully clears the $69K offers. From a fundamental perspective, the price surge makes sense. Supply is limited, demand is surging, hodlers aren’t willing to sell and the arrival of Bitcoin ETFs made the asset class more investable for big players.

And indeed, spot Bitcoin ETFs have amassed $6bn since their inception, and BlackRock’s ETF saw a whopping $520 million inflows in a single day. It was apparently the second biggest inflow into a US ETF, all asset classes included.

Ozkardeskaya cautions, though, that the price moves in cryptocurrencies are driven by a fair amount of speculation and so there could be big fluctuations, adding:

Some already call for a 20% downside correction after the rally is done.

US regulators are reportedly probing artificial intelligence pioneer OpenAI, the organisation behind the ChatGPT chatbot, following its boardroom turmoil three months ago.

The Wall Street Journal reports this morning that the Securities and Exchange Commission is “scrutinizing internal communications” by OpenAI Chief Executive Sam Altman as part of an investigation into whether the company’s investors were misled.

The WSJ says:

The regulator, whose probe hasn’t previously been reported, has been seeking internal records from current and former OpenAI officials and directors, and sent a subpoena to OpenAI in December, according to people familiar with the matter. That followed the OpenAI board’s decision in November to fire Altman as CEO and oust him from the board. At the time, directors said Altman hadn’t been “consistently candid in his communications,” but didn’t elaborate.

Altman returned as CEO less than two weeks later as part of a deal that also entailed a reconstituted board, which he hasn’t joined.

SEC officials based in New York are conducting the investigation and have asked that some senior OpenAI officials preserve internal documents.

Altman was dramatically dismissed by OpenAI’s board in November, and then sensationally rehired a week later after a staff revolt:

News of the SEC’s move comes as Altman holds talks with investors to raise trillions of dollars to reshape the global semiconductor industry.

The WSJ points out that the SEC often closes investigations without making formal accusations of wrongdoing; it enforces laws that forbid people from misleading investors.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

The world’s largest cryptocurrency is heading towards its alltime high, as crypto mania returns to the markets.

Bitcoin is continuing its wild ride this morning, up another 4% today at over $63,000.

This takes bitcoin’s gains so far this year to 50% (and it’s still only February, just!).

This puts bitcoin in sight of its alltime high of almost $69,000, set in November 2021, before it fell back during 2022.

Bitcoin’s gains in recent weeks have been driven by the launch of new Bitcoin ETFs, approved by US regulators last month, which make it easier to trade bitcoin.

There have been large client inflows into the ETFs launched in recent weeks by investment groups such as BlackRock and Fidelity.

Those ETFs are buying up bitcoins – at a rate faster than they are being created, or that long-time holders are willing to sell. This is pushing up the price.

Another factor is that a bitcoin halving event takes place in April. This will cut the reward for mining bitcoins, which is designed to slow the supply of new coins into the market.

One bitcoin bull, MicroStrategy, has also added to the rally by revealing this week it has bought another 3,000 bitcoin.

Trading is jittery, though – yesterday bitcoin approached the $64,000 mark, before dropping back and finishing above $60,000.

Tony Sycamore, market analyst at IG, says the market is setting up to “test and likely break” the November 2021 all time $69,000 high.

Sycamore explains:

Bitcoin’s resurrection from the crypto winter is comparable to that of the mythical Phoenix of Greek legend. But here we have a new legend taking shape, and whether it lasts for 500 years like the Phoenix, as Bitcoins proponents might hope, remains to be seen.

Bitcoin’s gains in recent weeks have been driven by record client inflows into the newly minted Bitcoin ETF’s. Amongst other reasons are anticipation of the Bitcoin halving event in April, concerns over a partial US government shutdown, and MicroStrategy’s Michael Naylor adding 3000 Bitcoins to his already considerable holdings.

This tweet from last night shows how volumes into bitcoin ETFs have been rising:

Also coming up today

Growth data from India, Canada and Switzerland will give us more insight into how the world economy fared in the last quarter of last year.

Global investors are also poised for the Federal Reserve’s favoured inflation measure to be released today. The US PCE index, which tracks changes in the prices of goods and services purchased by consumers in the United States, is expected to have dipped – core PCE is forecast to dip from 2.9% to 2.8%.

While in the UK, the Bank of England’s Money and Credit report will show how many mortgages were approved last month.

The agenda

• 8am GMT: Switzerland’s Q4 2023 GDP report

• 8.55am GMT: Germany’s unemployment report for February

• 9.30am GMT: Bank of England data on mortgage approvals and consumer credit

• Noon: India’s Q4 2023 GDP report

• 1pm GMT: Germany’s inflation report for February

• 1.30pm GMT: US weekly jobless report

• 1.30pm GMT: US PCE measure of prices