Could India be the answer to Apple’s growth issue?

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="536" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-820x536.jpg" alt="" class="wp-image-479372" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-820x536.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-300x196.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-138x90.jpg 138w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-768x502.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-1536x1003.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/PPA7LZHDAZIPJMJ7KHMLZAMWME-1-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: A view shows the logo of South Africa&#8217;s central reserve bank, at the reserve bank offices in Pretoria, South Africa, January 26, 2023. REUTERS/Siphiwe Sibeko</figcaption></figure>



JOHANNESBURG, April 23 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s central bank said on Tuesday that the path back to 4.5% inflation would probably be &#8220;bumpy and protracted&#8221; after setbacks in the disinflation trajectory in recent months.



The South African Reserve Bank (SARB) has held its main interest rate at 8.25%&nbsp;ZAREPO=ECI&nbsp;since May 2023, keeping policy restrictive to try to steer inflation towards the midpoint of its 3% to 6% target band.



In March headline inflation slowed to 5.3% in annual terms ZACPIY=ECI from 5.6% in February.



In a biannual review of its monetary policy stance, the bank said the slower pace of disinflation partly reflected normalising services components and elevated inflation expectations.



Administered prices continue to exert substantial upward pressure on headline inflation, it said in its April Monetary Policy Review.



The SARB, which is in discussions with the National Treasury about lowering its inflation target, also said in the document that it had modelled the impact of targeting 3.0% inflation over a five-year timeframe.



That modelling showed the economic growth rate decreased by about 0.3 percentage points relative to the baseline, but the decline was quickly reversed and surpassed as growth strengthened more than the initial weakening.



The central bank added markets now expect the repo rate to remain unchanged this year.



(Reporting by Kopano Gumbi; Editing by Alexander Winning)

South Africa trims rate hikes as power cuts slash growth prospects

South Africa c.bank: path to 4.5% inflation likely ‘bumpy and protracted’

The EPA released new limits on ‘forever chemicals’ in drinking water

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="545" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/QJNXCFIWLRLG5CVFJF3DG2WJ3A-820x545.jpg" alt="" class="wp-image-479321" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/QJNXCFIWLRLG5CVFJF3DG2WJ3A-820x545.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/QJNXCFIWLRLG5CVFJF3DG2WJ3A-300x199.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/QJNXCFIWLRLG5CVFJF3DG2WJ3A-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/QJNXCFIWLRLG5CVFJF3DG2WJ3A-768x511.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/QJNXCFIWLRLG5CVFJF3DG2WJ3A.jpg 1325w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: The logo of Anglo American is seen on a jacket of an employee at the Los Bronces copper mine, in the outskirts of Santiago, Chile March 14, 2019 REUTERS/Rodrigo Garrido</figcaption></figure>



LONDON, April 23 (Reuters)&nbsp;&#8211;&nbsp;Anglo American&nbsp;AAL.L&nbsp;on Tuesday reported an 11% increase in its copper output for the first quarter of the year, but slashed its 2024 production guidance for diamonds.



The London-listed miner said its copper production rose to 198,100 metric tons in the first three months, buoyed by a ramp-up in production at Quellaveco in Peru.



Still, the miner said it would maintain its 2024 output guidance for the metal at 730,000-790,000 tons.



Demand for copper, used in applications from solar panels to electric cars, is expected to increase as the world moves towards cleaner energy sources.



But global economic weakness has lowered the demand outlook for diamonds, traditionally seen as luxury items.



Anglo&#8217;s shares had slipped 0.7% by 0712 GMT.



Production of rough diamonds via De Beers fell 23% to 6.9 million carats.



Anglo, which in February announced a $1.6 billion impairment charge at its diamond operations, lowered its yearly guidance to 26 million to 29 million carats from a previous forecast of 29 million to 32 million carats on high levels of inventory.



&#8220;Although the diamond volumes cut and increase in cost guidance is a negative, we do not expect a material revision to consensus numbers,&#8221; said analysts at RBC Capital Markets.



&#8220;The volumes cut could likely assist diamond prices helping partially offset the higher costs,&#8221; they added.



Output of platinum metals and iron ore at Anglo&#8217;s South African units was broadly flat during the quarter. Shipments from Kumba Iron Ore were impacted by logistical challenges, the company said, as rail bottlenecks continue.



A consultation process to cut about 3,700 jobs at Anglo Platinum AMSJ.J as part of a restructuring after a slump in prices, are well advanced, Anglo said.



(Reporting by Clara Denina and Felix Njini; Editing by Kirsten Donovan)

FILE PHOTO: Logo of Anglo American is seen on a jacket of an employee at the Los Bronces copper mine, in the outskirts of Santiago

Anglo American boosts copper output, slashes diamonds forecast

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="544" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/LYNXMPEG6217H-820x544.jpg" alt="" class="wp-image-479306" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/LYNXMPEG6217H-820x544.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/LYNXMPEG6217H-300x199.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/LYNXMPEG6217H-136x90.jpg 136w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/LYNXMPEG6217H-768x509.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/LYNXMPEG6217H-1536x1018.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/LYNXMPEG6217H-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Customers queue to draw money from an ATM outside a branch of South Africa&#8217;s Capitec Bank in Johannesburg,South Africa, March 2, 2017. REUTERS/Siphiwe Sibeko/Files</figcaption></figure>



JOHANNESBURG, April 23 (Reuters)&nbsp;&#8211;&nbsp;South African lender Capitec Bank&nbsp;CPIJ.J&nbsp;said on Tuesday its loan losses in retail banking will likely shrink to within its target range in 2025, as its full-year profit rose by 16%, sending its share up 7.43%.



Capitec Bank is one of the fastest-growing South African lenders, targeting low-income earners who were largely ignored by the country&#8217;s bigger, established banks.



But this exposure has meant higher impairments, with its customers under pressure from 10 successive interest rate hikes and higher food inflation.



The lender, South Africa&#8217;s biggest retail bank by customer numbers, has seen a slower migration of retail credit into underperforming loans from performing loans in the second half of its 2024 year ended Feb.29, CEO Gerrie Fourie told investors.



Client cash flow strain, however, has improved over the last six months, with customer insufficient fund transactions coming down, he added.



But estimated credit loss increased in the full-year period, and as a result, the credit loss ratio &#8211; a measure of bad loans as a percentage of total loans &#8211; in retail banking increased to 101 basis points (bps) from 80 bps in 2023.



&#8220;The credit loss ratio is expected to return to through-the-cycle target of 8.5% (or 85 bps) by February 2025,&#8221; Fourie said.



The company, with 22 million retail clients, said overall credit impairment charges rose by 38% to 8.7 billion rand ($453.21 million). At group level, its credit loss ratio rose to 87 bps from 70 bps.



Capitec said it continued to tighten its credit-granting criteria.



The group&#8217;s headline earnings per share &#8211; the main profit measure in South Africa &#8211; rose to 9,171 cents as its net transaction and commission income grew by 29% to 14.8 billion rand.



After terminating its funeral product co-operation arrangement with insurer Sanlam&nbsp;SLMJ.J, Capitec said it will start adding life cover as it continues building its insurance business.



($1 = 19.1966 rand)



(Reporting by Nqobile Dludla; Editing by Tom Hogue and Savio D&#8217;Souza and Miral Fahmy)

Customers queue to draw money from an ATM outside a branch of South Africa’s Capitec Bank in Johannesburg,South Africa

South African lender Capitec expects loan losses to be within target in 2025

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="548" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/IGCSI2ZMYJNARJNQD2J6NFMHZE-820x548.jpg" alt="" class="wp-image-479267" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/IGCSI2ZMYJNARJNQD2J6NFMHZE-820x548.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/IGCSI2ZMYJNARJNQD2J6NFMHZE-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/IGCSI2ZMYJNARJNQD2J6NFMHZE-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/IGCSI2ZMYJNARJNQD2J6NFMHZE-768x513.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/IGCSI2ZMYJNARJNQD2J6NFMHZE-1536x1026.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/IGCSI2ZMYJNARJNQD2J6NFMHZE-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Nigeria Finance Minister Wale Edun is interviewed by Karin Strohecker, Reuters Chief Correspondent Emerging Markets, during the G20 Finance Ministers and Central Bank Governors&#8217; Meeting at the IMF and World Bank’s 2024 annual Spring Meetings in Washington, U.S., April 18, 2024. REUTERS/Ken Cedeno/File Photo</figcaption></figure>



WASHINGTON, D.C., April 22 (Reuters)&nbsp;&#8211;&nbsp;Nigeria is seeking up to $2.25 billion in World Bank loans and expects the bank&#8217;s board to approve the request in June, the government said in a statement following the IMF/World Bank spring meetings in Washington, D.C.



Nigeria also aims to issue diaspora bonds later this year to attract much-need foreign exchange into the country, Finance Minister Wale Edun said in the statement.



The World Bank loans would comprise $1.5 billion in development policy financing and $750 million in programme-for-results financing, the statement said, adding the bank would meet in June to consider final approval of the package.



The World Bank did not immediately comment on the statement.



Nigeria, typically Africa&#8217;s largest oil exporter, has faced a shortage of foreign exchange that pushed its naira currency to record lows versus the U.S. dollar this year, though it has since rebounded.



President Bola Tinubu also inherited an economy saddled with record debt, high unemployment and large central bank financing, though Edun, in an interview with Reuters last week, said the government had halved federal borrowing from the central bank.



(Reporting by Maxwell Akalaare Adombila; Writing and additional reporting by Libby George in London; Editing by Gareth Jones and Mark Potter)

FILE PHOTO: Nigeria Finance Minister Wale Edun is interviewed at the IMF and World Bank’s 2024 annual Spring Meetings in Washington

Nigeria seeking up to $2.25 bln in World Bank loans

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107266210-1688397617168-gettyimages-1508048254-_dsc5612-820x462.jpeg" alt="" class="wp-image-479264" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107266210-1688397617168-gettyimages-1508048254-_dsc5612-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107266210-1688397617168-gettyimages-1508048254-_dsc5612-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107266210-1688397617168-gettyimages-1508048254-_dsc5612-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107266210-1688397617168-gettyimages-1508048254-_dsc5612-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107266210-1688397617168-gettyimages-1508048254-_dsc5612.jpeg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A food shopper searches for vegetables July 1, 2023 at the Hannaford supermarket in South Burlington, Vermont.  Robert Nickelsberg | Getty Images</figcaption></figure>



Rising food prices around the world may finally be seeing a bottom this year.



According to Oxford Economics, global food prices are expected to decline in 2024, offering some relief for shoppers.



“Our baseline forecast is for world food commodity prices to register an annual decline this year, reducing pressure on food retail prices further downstream,” the economic advisory firm wrote in a recent note.



The key driving force behind the decline in food commodity prices is the “abundant supply” for many important crops, especially wheat and maize.



Bumper harvests in recent months for both staple crops led to a steady decline in prices. Wheat futures have fallen almost 10% year-to-date, while maize futures lost about 6% over the same period, according to FactSet data.



Farmers ramped up production of both wheat and corn grains following higher prices after Russia began its invasion of Ukraine in 2022.



As a result, global maize harvests for the marketing year ending August this year are likely to come in at record levels, according to Oxford’s analysis. Wheat harvests are also forecast to come in high, although slightly lower than the record level in marketing year 2022 to 2023, the Oxford report said.



<h2 class="wp-block-heading" id="h-russia-ukraine-war"><a></a>Russia-Ukraine war</h2>



Supply pressures of grains in Russia and Ukraine have also eased.



Despite the collapse of the Black Sea Grain initiative in July last year, Ukrainian agricultural exports have been holding up well, Oxford Economics’ Lead Economist Kiran Ahmed wrote.



Russian wheat exports have also been flooding international markets, keeping prices low, he added.



Wheat and maize, along with rice, account for over half of global caloric intake. That means the direction of their prices will critically influence consumers’ food budgets around the world, the report pointed out.



Even though wheat and corn prices have seen a robust decline, rice prices have been steadily climbing, with global supplies hampered by export restrictions imposed by India, which accounts for around 40% of the world’s rice production. Poor harvests in the country last year also pushed prices higher. Contrary to the slump seen in wheat and maize prices, rough rice futures have gained over 8% year-to-date.



Global food prices registered a decline of 9% in 2023, according to the World Bank. Similarly, the United Nations food agency’s world price index hit a three-year low in February, but saw a slight rebound in March, lifted by increases for dairy products, meat and vegetable oils. 



“We expect prices to fall a further 5.6% this year before picking up on an annual basis next year,” said Ahmed.



That said, Oxford Economics noted that risks to its food price forecast are still “overwhelmingly skewed to the upside,” with adverse weather conditions on the cards.



Bad weather has been denting confidence of agribusinesses and crop outlooks, with cocoa recently soaring to record levels as West African farmers battle with inclement weather and disease. If poor weather conditions persist, harvest prospects could be impaired in other key crop growing regions, the note added.



“However, we think prices are now near a floor and will begin to rise gradually through [the second half of] 2024,” the report said.



Buyers in Africa and Asia have also held back from purchasing wheat on hopes of even lower prices — and their return to the market could drive a recovery in prices, Ahmed said. Additionally, rice prices, which remain high, could also encourage more export restrictions coming out of India.



“Thus, while our base case is for food prices to remain subdued this year, the risks are building that prices could rebound more sharply than anticipated. This could keep food price inflation higher than in our base case, maintaining pressure on the consumer,” he concluded.

107266210-1688397617168-gettyimages-1508048254-_dsc5612

High global food prices may finally see a bottom in 2024, says Oxford Economics

Why The U.S. Government Is Buying And Destroying Homes

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="410" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/106962761-1634667390508-Screen_Shot_2021-10-19_at_90550_AM-820x410.jpg" alt="" class="wp-image-478995" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/106962761-1634667390508-Screen_Shot_2021-10-19_at_90550_AM-820x410.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/106962761-1634667390508-Screen_Shot_2021-10-19_at_90550_AM-300x150.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/106962761-1634667390508-Screen_Shot_2021-10-19_at_90550_AM-160x80.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/106962761-1634667390508-Screen_Shot_2021-10-19_at_90550_AM-768x384.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/106962761-1634667390508-Screen_Shot_2021-10-19_at_90550_AM.jpg 884w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



AUSTIN, TEXAS — Adam Sullivan left investment banking to mine bitcoin at an awkward time. It was May 2023, bitcoin was trading at around $21,000, U.S. regulators were in the thick of cracking down on the sector writ large, and Core Scientific, the company he had agreed to take over, was battling angry lenders in a Texas bankruptcy court over tens of millions of dollars in outstanding debt.



But Sullivan knew that, with a lifeline, he could get the business to a much better place. That’s because the halving was on the way, and with it would likely come a big rally in bitcoin.



Late Friday night, the bitcoin code automatically cut new issuance of the world’s largest cryptocurrency in half. It happens roughly every four years, and in addition to helping to stave off inflation, it historically precedes a major run-up in the price of bitcoin.



The technical event is relatively simple: Bitcoin miners get paid in bitcoin to validate transactions, and after 210,000 blocks of transactions are computed and added to the main chain, the reward given to the miners securing bitcoin is ‘halved.’



There are more than a dozen publicly traded miners on the network and thousands of smaller, private ones around the globe, constantly racing to process transactions and get paid in new bitcoin. Because the event leads to a cut to rewards paid to miners directly, they’ll be the first ones to feel the impact of the halving.



Typically, when the halving cuts supply, it’s led to huge rallies for bitcoin.



In fact, the previous (and only) three halvings in the chain’s history have come before every bull run, in which the coin has touched new all-time highs and a surge of investors have entered the market for the first time.



That rapid price increase has helped many miners stave off the worst since it tends to offset the impact of having the block prize cut in half.



“As a company that was already in the process of scaling our infrastructure during the previous halving, we know the toll that halvings can take on a company if it is not adequately prepared,” Core’s Sullivan told CNBC.



The aggregate market cap of the 14 U.S.-listed bitcoin miners tracked by JPMorgan analysts, which accounts for around 21% of the global Bitcoin network, declined 28% over the first half of April to $14.2 billion, reaching year-to-date lows. Bitdeer was the best-performing stock over the period, down around 20%, versus Stronghold Digital, which was 46% lower.



Some have billed the 2024 bitcoin halving as a seminal moment for the mining sector. Depending on how much prep work miners have done, it could easily make or break them.



“Being prepared for a halving means evaluating all of your power strategies, all of your software capabilities, all of your operations,” continued Sullivan.



Others are less concerned given recent price moves in bitcoin.



In a research note from Needham on Apr. 16, analysts said they expect the halving to only have a modest impact to miners’ estimated EBITDA margins, despite the 50% reduction in revenue, since the price of bitcoin has been trading in the range of $60,000 to $70,000.



“We expect geopolitical tensions and interest rate policy to be the biggest near-term drivers of crypto price action,” Needham analysts wrote, adding that at a bitcoin price above $60,000, the halving is “derisked for nearly all public miners.”



The bank did, however, single out their preference for low-cost bitcoin producers like Riot Platforms, Bitdeer, and Cipher Mining. Meanwhile, if bitcoin prices fall, Needham says the most outsized native impact will be felt by higher cost producers that are also levered to higher bitcoin prices via large treasury holdings.



Analysts from JPMorgan echoed a similar sentiment, writing in an Apr. 16 research note that they think “recent weakness offers an attractive entry point” for investors and that they are “especially bullish” on Riot, which they believe offers attractive relative valuations.



<h2 class="wp-block-heading" id="h-years-spent-bracing-for-the-halving">Years spent bracing for the halving</h2>



Miners have had years to prepare for the halving, including seeking lower power costs and upgrading their fleets to more efficient machines.



“Bitcoin’s halving happens like clockwork every four years,” said Haris Basit, chief strategy officer of Bitdeer Technologies Group. “It’s a known variable that is a benchmark for us to remain focused on operational excellence.”



To that end, the Singapore-headquartered mining firm has invested in new data centers, but its core strategy has been to increase vertical integration through research and development. 25% of its staff is focused on R&amp;D efforts, which Basit says have “led to new innovations and revenue pathways, such as our recently announced 4nm mining rigs and AI Cloud offerings.”



Analysts at Cantor Fitzgerald recently named Bitdeer as having one of the industry’s lowest “all-in” cost-per-coin.



Greg Beard, the CEO and Chairman of Stronghold Digital Mining, tells CNBC that&nbsp;miners whose only lever is more efficient machines will be at a disadvantage.



“Miners who own their low-cost power are better positioned,” said Beard. “Operational costs will be lower, allowing them to be more flexible with their capital.”



Core’s Sullivan agrees, noting that bitcoin mining data centers in the future will work hand-in-glove with power generators and grid operators to serve as a virtual battery for grid operators – allowing them to increase base load, curtail bitcoin data centers when they need to, and avoid peak generation loads, which he says are dirty and expensive.



“We own and operate our infrastructure, giving us greater control over operational and strategic decisions, such as the potential to expand into high-performance computing hosting,” said Sullivan.



Core Scientific, which launched in 2017 and now manages seven mining sites in five U.S. states, also owns the full technology stack. The company has been looking to diversify its revenue streams beyond purely bitcoin. Sullivan says that existing data centers offer reconfiguration opportunities to accommodate new types of high-value compute.&nbsp;



“Certain data centers are located in close proximity to major metropolitan areas, making them candidates for low-latency, high-value compute applications,” said Core’s CEO.



Riot Platforms CEO Jason Les told CNBC that preparation for the halving came down to the company’s long-standing focus on achieving a low cost of power, strong balance sheet, and significant scale of operations. Les says that’s what has positioned the firm to both withstand the halving with positive margins and be well positioned for upside on the other side of it.&nbsp;&nbsp;



“Our new Corsicana Facility was energized just this week, and we will be significantly scaling up our hash rate with next-generation equipment at that new site over the remainder of the year,” said Les. “As a result, we are positioned to mine more bitcoin per day at the end of the year than we do today, despite the halving.”



Marathon Digital, which has seen its stock rise more than 70% in the last year, took a different approach to scaling the business than its rivals. CEO Fred Thiel tells CNBC that the company grew quickly using an asset-light approach, where Capex was spent on mining rigs rather than infrastructure. 



“In December, we owned less than 5% of the sites where we were hosting our miners,” said Thiel. “Today we now own 53% of our total 1.1 gigawatts of capacity, having purchased it at less than the build and replacement cost.”



Owning sites lowers Marathon’s cost to mine by up to 20% on a marginal cost basis. Thiel also noted that by the end of 2024, Marathon expects to further improve efficiency by 10% to 15% as they deploy the next generation rigs across their new sites.&nbsp;



That boost to efficiency isn’t just about new gear, however. The firm is deploying its own custom firmware, which allows it to operate even more efficiently.&nbsp;



Marathon, along with other mining firms, has begun diversifying its business model into ancillary operations beyond purely bitcoin mining, as well.



Thiel says the company recently launched an energy harvesting division, where they are compensated for converting stranded methane and bio-mass into energy, which they then sell heat back into an industrial or commercial process. The service essentially subsidizes and lowers Marathon’s cost to mine significantly. The company expects this new business line to generate a significant portion of its revenues by the halving in 2028. 



<h2 class="wp-block-heading">Diversifying revenue</h2>



The April 2024 bitcoin halving looks a lot different than the three that came before it.



For years, increased competition resulting from new miners coming online has been cutting into profits, because more miners means more people are sharing the same pool of rewards.



In a research note from JPMorgan on Apr. 16, analysts note that the network hashrate, a proxy for industry competition and mining difficulty, was up 4% in April from the month before. Stronghold’s Beard says the halving is a headwind dwarfed by the global hashrate increasing nearly five-fold from the last one in May 2020.



“Mining is a tough industry especially because there are a lot of nation states that have extra power power and they’re dedicating it to mining,” said Nic Carter of Castle Island Ventures. “It’s a free market, anybody can enter into it as long as they have the basics.”



U.S. spot bitcoin exchange-traded funds have also significantly shifted the pricing dynamics. In years past, the price of bitcoin didn’t surge until after the halving. But in the wake of record flows into these spot bitcoin funds, the world’s largest cryptocurrency touched a fresh all-time-high above $73,000 in March.



“The recently approved bitcoin ETFs have proven to be huge pipelines of capital into bitcoin and that universe of ETFs continues to grow with the recent approvals in Hong Kong as well,” said Riot’s Les. “We think the price action we’ve seen in bitcoin year-to-date reflect that and has us very optimistic on what bitcoin mining economics can look like in the months and years post-halving.”



Blackrock’s ETF reached $17 billion in net assets within a few months of launching. Beard of Stronghold tells CNBC that if Blackrock added even just a billion dollars more of bitcoin in April to its ETF, it would single handedly create demand for more coins than the mining industry will supply post halving.



What is also different this time around is that the block reward is no longer the primary form of miner revenue. Recent programming innovations in bitcoin have given way to a burgeoning ecosystem of projects building on top of bitcoin’s blockchain, which has translated to greater transaction fee revenue for miners.



There is a limit to how large the blocks can go but the value of those blocks is about to increase significantly, according to Bill Barhydt, who is the CEO and founder of Abra. From Barhydt’s vantage point, he supports miners with a mix of services, including their auto liquidations, so he has access to a lot of macro data across the sector.



“The math is simple,” begins Barhydt. “Bitcoin blocks are fixed in size and the demand for data within those blocks is going to increase significantly for several reasons, including more retail wallet holders moving their bitcoin into and out of storage, new uses cases like Ordinals (NFTs for bitcoin) and DeFi on bitcoin, institutional settlement requirements for exchange traded products in the U.S., Hong Kong, Europe, etc., lightning settlement transactions, and more.”



At the current rate of adoption, Barhydt believes that transaction fees in this cycle would likely peak within 24 months at 10 times their cost during the previous cycle peak, due to a combination of a higher price for bitcoin itself, combined with higher demand for the space inside each block.&nbsp;



Castle Island’s Carter isn’t so sure that fee-based revenue can completely make up for lost income post-halving.



“It’s not entirely clear that fees are fully offsetting the lost revenue, and in fact, I don’t expect that to happen” said Carter.



Fees tend to be really cyclical. They rise sharply during periods of congestion, and they fall back to near zero during other normal periods. Carter cautions that miners will see spikes in fees, but there is not yet an enduring, strong, and robust fee market most of the time.



<h2 class="wp-block-heading">Swapping ASICs for AI</h2>



In the last year, there has been a surge in demand for AI compute and infrastructure that can support the massive workloads required to power these novel machine learning applications. In a new report, digital asset fund manager CoinShares says it expects to see more miners shift toward artificial intelligence in energy-secure locations because of the potential for higher revenues.



Already, mining firms like BitDigital, Hive, Hut 8, Terawfulf, and Core Scientific all have either current AI operations or AI growth plans.



“This trend suggests that bitcoin mining may increasingly move to stranded energy sites while investment in AI grows at more stable locations,” write analysts at CoinShares.



But pivoting from bitcoin mining to AI isn’t as simple as re-purposing existing infrastructure and machines. The data center requirements are different, as are the data network needs.



“AI presents several challenges, notably the need for distinct and considerably more costly infrastructure, which establishes barriers to entry for smaller, less capitalized entities,” continues the report. “Additionally, the necessity for a different skill set among employees leads to increased costs as companies hire more AI-skilled talent.”



The rigs used to mine bitcoin are called ASICs, short for Application-Specific Integrated Circuits. The “Specific” in that acronym means that it can’t be used to do other things, like supporting the underlying infrastructure for AI.



“If you’re a bitcoin miner, your machines can’t be repurposed,” explains Carter. “You have to buy net new machines in order to do it and the data center requirements are different for AI versus bitcoin mining.”



Sullivan says that Core Scientific, which has been mining a mix of digital assets since 2017, began to diversify into other services in 2019.



“The company has owned and hosted Nvidia DGX systems and GPUs for AI computing, having built and deployed a specialized facility specifically for high-value compute applications at our Dalton, Georgia data center campus,” he said.



Core Scientific has also partnered with CoreWeave, a cloud provider which provides infrastructure for use cases like machine learning.



Sullivan says the combined capabilities will support both AI and High Performance Compute workloads, resulting in an estimated revenue of $100 million, though he says the total potential revenue is much higher given their significant infrastructure footprint that can be fitted to host some of the most advanced GPU compute coming to market.



“Bitcoin mining is an early example of high-value compute, attracting significant capital and a number of companies scaling their operations to support the Bitcoin network,” said Sullivan.



But Sullivan thinks few operators will be able to make the transition to AI.



Sullivan continued, “Bitcoin mining sites can only be repurposed if they meet the attributes that are required for HPC. Many existing sites across North America do not meet these needs.”

106962761-1634667390508-Screen_Shot_2021-10-19_at_90550_AM

Bitcoin miners upgrade power centers and get into AI to brace for slashed revenue post halving

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2147860031-820x547.jpg" alt="" class="wp-image-478968" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2147860031-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2147860031-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2147860031-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2147860031-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2147860031-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2147860031-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">WASHINGTON DC, USA &#8211; APRIL 16: Financial Counsellor and Director of the Monetary and Capital Markets Department Tobias Adrian hold the press briefing of the Global Financial Stability Report at the International Monetary Fund during the 2024 Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group in Washington DC, United States on April 16, 2024. (Photo by Celal Gunes/Anadolu via Getty Images)</figcaption></figure>



WASHINGTON, April 20 (Reuters)&nbsp;&#8211;&nbsp;The steering committee for both International Monetary Fund and the World Bank on Saturday emphasized the need for broader accountability as the institutions implemented reforms to help countries grapple with climate change and other shocks.



&#8220;We must hold ourselves accountable more broadly as we become a better and bigger bank,&#8221; said Mohammed bin Hadi Al Husseini, the United Arab Emirates&#8217; minister of state for finance, who heads the joint Development Committee this year.



Al Husseini issued a chair&#8217;s statement, rather than a communique, amid disagreements over wars in the Middle East and Ukraine, but referenced economic risks posed by the conflicts. The statement came as this week&#8217;s meetings of the IMF and World Bank drew to a close.



Governors of the institutions urged the World Bank to continue to bolster global and regional partnerships, and asked its management to push ahead with country engagement reforms and enhanced country diagnostics.



They also encouraged further collaboration between the World Bank and IMF to help countries mobilize more revenues at home, and on issues such as climate change and pandemic preparedness, as well as debt sustainability.



(Reporting by Andrea Shalal; editing by Diane Craft)

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/UGBD2ZAOI5NQPCFYW7PX6JS46A-820x547.jpg" alt="" class="wp-image-478146" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/UGBD2ZAOI5NQPCFYW7PX6JS46A-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/UGBD2ZAOI5NQPCFYW7PX6JS46A-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/UGBD2ZAOI5NQPCFYW7PX6JS46A-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/UGBD2ZAOI5NQPCFYW7PX6JS46A-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/UGBD2ZAOI5NQPCFYW7PX6JS46A-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/UGBD2ZAOI5NQPCFYW7PX6JS46A-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Street vendors wait for customers at an open market, ahead of Nigeria&#8217;s Presidential election in Awka, Anambra state, Nigeria February 23, 2023. REUTERS/Temilade Adelaja/File Photo</figcaption></figure>



JOHANNESBURG/WASHINGTON, April 19 (Reuters)&nbsp;&#8211;&nbsp;Incomes in Sub-Saharan Africa are falling further behind the rest of the world amid a &#8220;tepid&#8221; economic recovery, the International Monetary Fund (IMF) said on Friday, warning of risks from geopolitics, domestic instability and climate change.



The IMF earlier this week said the region&#8217;s economy would grow 3.8% this year, up from 3.4% in 2023, as it begins to emerge from four years of shocks, from the COVID-19 pandemic to Russia&#8217;s invasion of Ukraine and rising global interest rates.



&#8220;When accounting for population growth, the income gap with the rest of the world is widening,&#8221; the fund said in its biannual Regional Economic Outlook report, launched during its Spring Meetings this week in Washington.



It noted that other developing countries saw real income per person more than triple since 2000, while they grew 75% in Sub-Saharan Africa and 35% in developed countries.



However, there were some positive developments.



&#8220;Two-thirds of the countries are already experiencing acceleration in growth; diversified and fairly broad-based growth,&#8221; said Abebe Selassie, director of the IMF&#8217;s African Department, said in an interview with Reuters in Washington.



Many of the more diversified economies had already enjoyed some growth recovery since the pandemic, he added.



<h2 class="wp-block-heading" id="h-inflation-falling">INFLATION FALLING</h2>



Economic conditions have started to ease for many countries this year, with Ivory Coast, Benin and Kenya issuing international bonds and median inflation falling to 6% in February from almost 10% a year earlier, the IMF said.



But political instability is rising and denting investor confidence, it said, pointing to junta-led states Burkina Faso, Mali and Niger leaving the Economic Community of West African States (ECOWAS) and 18 elections across the region this year.



Devastating droughts last year in the Horn of Africa and currently in southern Africa, as well as cyclones and floods, have also increased the region&#8217;s struggles.



South Africa is set to grow just 0.9% this year, a slight increase from 0.6% in 2023, amid ongoing rolling power cuts and problems with the country&#8217;s railways and ports, the IMF said, adding that &#8220;electoral uncertainties&#8221; could derail ongoing energy sector reforms.



Africa&#8217;s most industrialised economy holds an election on May 29, in which the ruling African National Congress (ANC) party could lose its majority for the first time since the end of apartheid in 1994.



West Africa&#8217;s largest economy, Nigeria, is set to grow 3.3% this year, as it struggles with high inflation amid painful currency and subsidy reforms.



In its northern neighbour Niger, meanwhile, growth is predicted to rocket from 1.4% last year to 10.4%, as oil exports ramp up.



(Reporting by Rachel Savage and Karin Strohecker, Additional reporting by Maxwell Akalaare Adombila, Editing by Alex Richardson)

FILE PHOTO: Street vendors wait for customers at an open market, ahead of Nigeria’s Presidential election in Awka

Sub-Saharan Africa incomes falling further behind rest of world, says IMF

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="728" height="444" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/UXGWX6XZO5LIROPXQDLPV6SPGA.jpg" alt="" class="wp-image-422268" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/UXGWX6XZO5LIROPXQDLPV6SPGA.jpg 728w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/UXGWX6XZO5LIROPXQDLPV6SPGA-300x183.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/UXGWX6XZO5LIROPXQDLPV6SPGA-148x90.jpg 148w" sizes="(max-width: 728px) 100vw, 728px" /><figcaption class="wp-element-caption">South African Rand coins are seen in this illustration picture taken October 28, 2020. REUTERS/Mike Hutchings</figcaption></figure>



JOHANNESBURG, April 19 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s rand weakened in volatile trading early on Friday, as reports of an Israeli attack on Iran sapped risk sentiment and sent currency markets into a tailspin.



In the latest tit-for-tat exchange between the two arch-foes, Israel launched an attack on Iranian soil, sources told Reuters. Iranian state media reported that drones had been shot down.



The rand&nbsp;ZAR=D3&nbsp;initially hit a near two-month low of 19.3800 to the dollar in a sell-off of risk assets as investors scurried towards safe-haven dollar and gold.



However, some calm returned to the markets after a senior Iranian official said Iran had no plan to strike back immediately.



&#8220;Diminished concern over a broader regional conflict, as Iran reported minimal damage to its infrastructure and confirmed no impact on its nuclear sites, contributed to the markets&#8217; partial recovery,&#8221; said Andre Cilliers, currency strategist at TreasuryONE.



At 0802 GMT, the rand traded at 19.2300 against the dollar, down 0.38% from its previous close.



On the stock market, the Top-40&nbsp;.JTOPI&nbsp;index and the broader all-share&nbsp;.JALSH&nbsp;index were both trading in the red, about 0.7% weaker in early trade.



The dollar&nbsp;=USD&nbsp;was last down 0.1% against a basket of currencies but still hovered near a five-month high.



Capital Economics chief economist Neil Shearing said Iran lifting flight restrictions may also have helped the markets.



&#8220;This might indicate that the attack was at the more moderate end of the spectrum,&#8221; he said in a research note.



(Reporting by Bhargav Acharya; Editing by Alex Richardson)

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Could India be the answer to Apple’s growth issue?

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