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Don’t believe the Bitcoin bounce. The U.K.’s decision to block Binance from engaging in regulated activity in that country is bad news for cryptocurrencies.
The U.K. government announced that Binance, a crypto exchange, is not allowed to engage in regulated activities and must make that clear on its website. It’s not a ban—Binance can still offer crypto trading on its website—but a limit placed on what it can do.
In an email to The Wall Street Journal, U.K. regulators highlighted that a “significantly high number of crypto businesses are not meeting the required standards” under money-laundering regulations as the reason for its actions.
That’s not a surprise. Traditional banks and brokers are required to check on the legitimacy of their clients. Ultimately, crypto brokers and exchanges might have to do the same, require them to know their clients, something that isn’t really part of the crypto ethos.
Bitcoin is rallying, up almost 5% Monday. The gain, however, doesn’t matter much. It gets the world’s leading crypto to where it was on Thursday, before a 7.8% drop.
Bitcoin remains stuck at the lower end of its $30,000 to $40,000 trading range it’s been bouncing around in for more than a month.
It might have trouble gaining momentum and breaking out as global governments take a closer look at all things crypto.
—Al Root
*** In this week’s Barron’s Streetwise podcast, columnist Jack Hough talks with Pfizer CEO Albert Bourla about vaccines, cancer treatments, rising drug prices, and more. Listen here.
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Lawmakers Work to Keep Biden’s Infrastructure Proposals Alive
Sen. Joe Manchin (D., W.Va.) said Sunday he could support an additional spending bill of up to $2 trillion that could include a corporate tax rate increase to 25%, as GOP senators told the morning talk shows they were reassured by President Joe Biden’s comments about the $1.2 trillion bipartisan infrastructure deal.
- Sen. Mitt Romney (R., Utah) told CNN’s “State of the Union” that he is “totally confident” the president will sign the infrastructure agreement without raising taxes.
- Lawmakers struck the deal last week but were alarmed by Biden’s comments Thursday that suggested his signature on it would depend on passage of his other spending priorities. Biden clarified his comments on Saturday.
- A group of 21 senators, including 11 Republicans and 10 Democrats, back the infrastructure deal, which provides $579 billion above expected federal spending.
- Biden’s senior advisor Cedric Richmond said the administration hopes to get more than the 60 votes needed to pass urgently needed infrastructure improvements, he told CBS’s “This Week.”
What’s Next: Democrats hope to pass a broader anti-poverty bill under a special budget process known as reconciliation that requires only a simple Senate majority vote. Senate Majority Leader Chuck Schumer (D., N.Y.) plans to address both bills in July.
—Janet H. Cho
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India’s Coronavirus Deaths and Delta Variant Impact May Be Underestimated
India confirmed more than 395,000 Covid deaths, but public health officials, statisticians and families believe the actual figure is much higher. That may affect the world’s understanding of the scope of the highly infectious Delta variant discovered in India, The Wall Street Journal reported.
- Christopher Murray, director of the University of Washington’s Institute for Health Metrics and Evaluation, said India’s actual Covid deaths may exceed 1.1 million. Overwhelmed hospitals turned away patients in April and May without testing them.
- Australia expanded its lockdowns as it searched for 15 workers from a gold mine in central Australia who are suspected of being infected with the Delta variant. Passengers and crew from five Virgin Australia flights were ordered to isolate after one crew member tested positive.
- Although 56% of U.S. adults are fully vaccinated, rates vary from 75% in Vermont to 38% in Mississippi and 41% in Alabama, according to the New York Times’ analysis of Centers for Disease Control and Prevention data. Vaccinations in rural areas lag behind urban areas, even within the same state.
- Public health officials are concerned that unvaccinated people are more vulnerable to catching, spreading and dying from the Delta variant. In the U.K., where more than 95% of cases are of the Delta strain, children are driving the current surge.
What’s Next: The Delta variant made up 20.6% of U.S. cases as of June 19, including 29% of cases in Missouri and 10% of cases in Colorado, according to the CDC. In California, the Delta variant is 14.5% of the state’s cases and is growing rapidly.
—Janet H. Cho
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Unemployment Rates Fall In States Dropping Pandemic Payments
Unemployment is falling in the states where extra federal pandemic assistance is ending early, according to The Wall Street Journal, suggesting the move is forcing people to find jobs.
- The May unemployment rate in Missouri, which stopped the $300 weekly benefit June 12, was 4.2% compared to the national average of 5.8%, Labor Department data show.
- Missouri and three other states were the first to cut off payments, followed by seven states on June 19, and 10 this weekend. Four more states will stop by July 10. The federal program is set to expire in September.
- The number of workers paid benefits through regular state programs fell 13.8% from mid-May to June 12 in states ending them in June, according to Jefferies. That compares with a 10% decline in states ending them in July, and a 5.7% decrease in states ending them in September.
- The U.S. is not adding jobs as fast as it lost them during the early stages of the pandemic last year, but the economy has still created an average of 535,000 new jobs each month in 2021.
What’s Next: The government’s report on job creation in June is slated for Friday, and Wall Street is looking for a somewhat bigger increase. Economists predict almost 700,000 new jobs were added this month, and the unemployment rate is expected to slip to 5.7% from 5.8%.
—Liz Moyer
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China’s Didi and Krispy Kreme Highlight Busy IPO Calendar
Didi Global, the Chinese ride-hailing company, is expected to raise $4 billion in an initial public offering this week on the New York Stock Exchange, while anticipation is also growing over Krispy Kreme’s return to the public market.
- The Didi offering would give the company a valuation of $62 billion to $67 billion. The investor order books will close one day early on Monday at 5 p.m. in each region, according to Reuters.
- Didi is offering 288 million American Depository shares at a price of $13 to $14.
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The IPO would be the largest international listing in the U.S. since
Alibaba
raised $25 billion in 2014. The company said it plans to use the money to invest in technology, notably in electric vehicles, and grow outside China. - Krispy Kreme is seeking to raise up to $640 million. The company first went public in 2000 before being taking private in 2016. It will trade under the symbol DNUT.
What’s Next: The listings illustrate the renewed vigor of the IPO market as investors try to take advantage of rising markets and generous valuations.
—Pierre Briançon
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U.S. Launches Air Strikes Against Iran-Backed Militias
The U.S. military said Sunday it had carried out “defensive precision airstrikes” against Iran-backed militia groups in the Iraq-Syria border region.
- Pentagon press secretary John Kirby said in a statement that U.S. jets had targeted two “operational and weapons storage facilities” in Syria and one in Iraq, in reprisals for attacks against U.S. military personnel.
- This is the second time that President Biden has ordered retaliation against the Iran-supported groups in the region, after limited strikes in Syria in February.
- The U.S. said the appropriate strikes were “designed to limit the risk of escalation—but also to send a clear and unambiguous deterrent message.”
- The Iraqi resistance coordination, an umbrella group claiming to speak for Iran-backed militias, said that three of its members had been killed in the attack.
What’s Next: U.S. officials are concerned by the increasing use of drones by the militias in the region. But Biden is still trying separately to revive the 2015 nuclear deal with Iran.
—Pierre Briançon
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MarketWatch Wants to Hear From You
What’s the difference between a vacation home and a rental property, and what does the answer mean for your taxes?
A MarketWatch correspondent will answer this question soon. In the meantime, send any questions you would like answered to thebarronsdaily@barrons.com.
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—Newsletter edited by Liz Moyer, Stacy Ozol, Matt Bemer, Ben Levisohn