Trump’s threat to impose tariffs on autos adds new pressure to NAFTA talks

President Donald Trump’s threat to impose sweeping new tariffs on imported automobiles may be an attempt to pressure his NAFTA partners into striking a deal that would help drive manufacturing jobs back to the U.S.

Trump directed Commerce Secretary Wilbur Ross on Wednesday to initiate a so-called Section 232 national-security investigation into imports of cars, trucks and vehicle parts that could possibly lead to tariffs.

These investigations can take months to conclude. In the meantime, the clock is ticking to clinch a NAFTA deal that can be voted on by the current Congress this year. An agreement over auto-production rules has been one of the key sticking points in nine months of talks.

The looming threat of auto levies could further weigh on Mexico and Canada, which have a large stake in the U.S. auto market as the two biggest foreign suppliers of vehicles.

It’s “inconceivable” that Canada would pose a threat to America’s security, Adam Austen, spokesman for Canadian Foreign Minister Chrystia Freeland, said in an email on Thursday. “Canada and the United States have the greatest economic and security partnership of any two countries in the world,” he said.

Any attempt to use the auto-import probe as leverage is unlikely to work, said Bill Reinsch, a former Clinton administration commerce official who’s now a senior adviser at the Washington-based Center for Strategic and International Studies.

“A deal on autos is within reach but the other U.S. demands remain unresolved, and Canada and Mexico are not going to agree on autos without assurances on the other stuff,” Reinsch said. “I don’t see how bullying them on auto tariffs will change that. In addition, you’re talking about a process that is going to take some time.”

The Commerce Department, which is leading the probe, said in a statement on Wednesday that automobile manufacturing “has long been a significant source of American technological innovation.”

The investigation will examine whether the decline of the U.S. automobile sector threatens to weaken the U.S. economy by reducing research and development, skilled jobs and more advanced manufacturing processes like electric and autonomous vehicles, Commerce said.

Hours before the announcement of the investigation on Wednesday, Trump said on Twitter that “big news” was “coming soon for our great American Autoworkers. After many decades of losing your jobs to other countries, you have waited long enough!”

‘Not Smart’

Linda Hasenfratz, chief executive officer of Canada-based auto-parts maker Linamar Corp., said it’s “ludicrous” to suggest vehicle imports from Canada and Mexico represent a security risk.

“This is clearly a negotiating tactic to draw to a close the ongoing NAFTA negotiations and other trade disputes,” she said in a statement Thursday. “While I support coming to an agreement on NAFTA to eliminate that uncertainty and allow us to all get back to business, I certainly don’t support a tactic which will drive inflation and ultimately economic recession.”

U.S. President Donald Trump directed Commerce Secretary Wilbur Ross to initiate a so-called Section 232 national-security investigation into imports of cars, trucks and vehicle parts that could possibly lead to tariffs.

Canadian auto parts stocks slipped on the U.S. move. Magna International Inc., North America’s largest auto supplier, was down 1.2 per cent at 1:03 p.m. in Toronto, while Martinrea International Inc. fell 1.6 pe rcent and Linamar dropped 1 per cent.

More than half of the cars built in Canada are made by American manufacturers with a majority of U.S. content, said Flavio Volpe, president of the Toronto-based Automotive Parts Manufacturers’ Association. Tariffs would “punish American companies, suppliers and customers. This is not smart,” Volpe said.

The Trump administration has already stoked tensions with Canada and Mexico by threatening to impose permanent tariffs on imported steel and aluminum if they don’t agree to successfully conclude a revamped NAFTA. Those duties are being implemented as part of separate Section 232 probes into the metals that wrapped up earlier this year. Temporary relief from the duties for Canada and Mexico is due to expire on June 1.

Trade experts were at a loss to explain how the booming U.S. auto sector could be considered a national-security risk. They also warned the measures would be hard to defend at the World Trade Organization and are likely to invite retaliation from a number of countries, if Trump follows through.

“This is a case where there is no auto shortage, the companies are not currently in trouble, and there are plenty of alternative sources from friendly allies,” Reinsch said.

Bloomberg.com

Trump says Canada, Mexico ‘spoiled’ and ‘very difficult to deal with’, but auto industry will be happy with NAFTA

WASHINGTON — President Donald Trump predicted Wednesday that U.S. automakers and auto workers would be “very happy” with the outcome of talks over the North American Free Trade Agreement, which have stalled amid a dispute over rules for car production.

Trump told reporters on the South Lawn that “you’ll be seeing very soon what I’m talking about,” noting that both Mexico and Canada have been “very difficult to deal with” during the negotiations.

“I am not happy with their requests. But I will tell you in the end we win, we will win and will win big,” Trump said before departing for New York. He said America’s neighbours have been “very spoiled because nobody’s done this but I will tell you that what they ask for is not fair. Our auto workers are going to be extremely happy.”

The U.S. remains far apart on the talks over rewriting the trade pact with Canada and Mexico. Treasury Secretary Steven Mnuchin has said that efforts to renegotiate the trade agreement could spill into next year.

Mexico has so far resisted U.S. attempts to get higher regional content rules in the auto industry and move production to higher-wage U.S. and Canadian factories. The U.S. has also sought to change NAFTA’s dispute-resolution system, and include a sunset clause that would allow countries to exit after five years.

The Trump administration has already missed an informal deadline that had been set by House Speaker Paul Ryan to get a revamped deal to Congress in time for lawmakers to vote on it in a midterm election year. Mexico, meanwhile, will hold presidential elections on July 1 and Andres Manuel Lopez Obrador, the leftist candidate who has led in polls, has said the re-negotiation shouldn’t be rushed through and should be left to the winner of the election.

If the negotiators fail to agree to a revamped version of NAFTA, the discussions could be extended into 2019. Trump could also carry out his threat to abandon the agreement that he has long railed against, throwing commerce among the three countries into disarray.

Trump has sought to overhaul NAFTA in an effort to return auto production to the United States and reduce America’s trade deficit. The U.S. has been demanding that a percentage of a car’s content of auto parts originate in a country — the U.S. or Canada — with average auto worker wages of about $15 an hour to qualify for NAFTA’s duty-free status.

But companies have built supply chains that straddle NAFTA borders and changing the rules could disrupt their operations, raise costs and potentially put them at a competitive disadvantage with manufacturers in Asia and Europe.

Prince Edward Island is ‘on a tear’ as economy booms amid record tourism

CHARLOTTETOWN — Tourists visiting tidy, bucolic Prince Edward Island should keep their eyes open for some swagger this summer: The smallest province is on a tear.

An expected steady rhythm of hammers and saws is just one indicator of an economic boom.

Retail sales on the Island were up 7.4 per cent last year, and employment grew by three per cent and continues to grow at that pace.

Wages grew by 3.6 per cent over the past year — third in the country behind only British Columbia and Ontario. The island is aiming for its fifth straight year of record tourism.

Chris Palmer, minister of economic development, said the Island has seen a fundamental change in attitude.

“We’ve got tremendous skill sets of folks who are here. We are inviting people with new skill sets to come to P.E.I. They’re coming here and thriving. They’re creating new employment. They’re spending money,” he said.

Last year, the Atlantic Provinces Economic Council said P.E.I. was “on a tear,” and senior policy analyst Fred Bergman said that statement holds true for 2018 as well.

Bergman said there is no one single reason for the boom, but a number of sectors including the fishery and tourism are doing very well.

“The value of the lobster catch at the wharf would be up 50 per cent in two years,” Premier Wade MacLauchlan, who brought in the Island’s first balanced budget in a decade last year, said in an interview. “That in turn is money people spend on their vehicles, on homes, dining out and improving their communities.”

The Island only has about 150,000 residents, or about the same as Trois-Rivieres, Que., but it has the strongest population growth in the region.

Some of that credit goes to immigration. The province’s immigration nominee program has been harshly criticized as flawed because it grants permanent residency before there’s proof the immigrants have actually stayed on the Island, but P.E.I.’s growing diversity cannot be denied.

“The number of immigrants per 1,000 people on P.E.I. showed that once again they led the country in terms of immigration rate. About 2,350 permanent residents went to P.E.I. last year, so that’s a measure of immigration,” Bergman said.

Housing starts on the Island increased by 64 per cent last year — compared to a national average of 11 per cent.

“This year is looking like an amazing year again in construction, both on the commercial and residential side,” said Sam Sanderson, general manager of the P.E.I. Construction Association.

And with a vacancy rate of less than half of a per cent, Sanderson expects 2018 will be busy. The industry is in fact facing a shortage of skilled trades people, and Sanderson said efforts are being made to train more Islanders in the trades and to recruit more to move to the Island.

Palmer said there are opportunities in the province that weren’t there when he was growing up. He said many Islanders who moved away in search of work are now moving home and bringing the jobs with them.

“I was one of those. I was in IT in Moncton for five years and Halifax for five years. I couldn’t wait to get back. I was able to come back and do the kind of work I was doing somewhere else. I could do it from P.E.I.,” he said.

The Conference Board of Canada has touted a “strong demand for P.E.I. products” that is bolstering its manufacturing sector.

Among the success stories: Sekisui Diagnostics, a global company — based in Japan — that makes reagents for medical testing.

The company bought an existing bioscience company in Charlottetown in 2011 and seen steady growth ever since.

Every year, Sekisui produces 1.5 billion clinical chemistry tests in P.E.I. that are then shipped around the world.

“Since 2011 our revenues have grown about 225 per cent. We’ve added about 50 full time staff. (Now 123 in total) We just went through a multi-million dollar expansion and are potentially looking at another expansion,” said plant manager Brian Stewart.

He said the Charlottetown facility is more cost competitive than their plants in Japan, so more of the company’s volume is being moved to P.E.I.

MacLauchlan said exports from the small province hit an all-time high of $1.38 billion in 2017, with year-over-year growth of 4.6 per cent.

“We think that can continue,” the premier said, noting that efforts are being made to grow markets in Europe and Asia.

“I’m very confident that it can continue to grow and to reflect the success that we’re having. Success brings success.”

— By Kevin Bissett in Fredericton

Trump backs down from China tariffs amid North Korea concerns, White House trade discord

U.S. President Donald Trump retreated from imposing tariffs on billions of dollars worth of Chinese goods because of White House discord over trade strategy and concern about harming negotiations with North Korea, according to people briefed on the administration’s deliberations.

Trump also succumbed to pressure from farm-state Republicans, who heavily lobbied the White House to resolve its trade differences with China, which had especially targeted U.S. agricultural products with planned retaliatory tariffs.

Treasury Secretary Steven Mnuchin said Sunday that the administration’s plan to impose tariffs had been suspended, and Trump said on Twitter on Monday that the Chinese had agreed to purchase unspecified amounts of American farm products. Some of his loyalists led by former chief strategist Steven Bannon criticized the deal as a capitulation.

The agreement at least delays a trade war between the world’s two largest economies, a prospect that has rattled financial markets for months. But many U.S. concerns about China’s economic practices remain unresolved: its acquisition of American technologies; the country’s plans to subsidize the growth of advanced domestic industries such as artificial intelligence and clean energy; and U.S. companies’ access to China’s markets.

Bannon blamed Mnuchin. Trump “changed the dynamic regarding China but in one weekend Secretary Mnuchin has given it away,” he said in an interview. “Mnuchin has completely misread the geopolitical, military, and historical precedents, and what President Trump had done was finally put the Chinese on their back heels.”

Some White House officials blame poor coordination among the warring factions in Trump’s economic team for the retreat, according to several people briefed on the matter. Within the administration, divisions are raw between free-trade supporters such as Mnuchin and White House economic adviser Larry Kudlow and China hawks led by White House trade adviser Peter Navarro.

During a trip to Beijing earlier this month, Navarro and Mnuchin argued about the U.S. negotiating position, and Navarro wasn’t deeply involved last week in negotiations with a Chinese delegation in Washington.

The divisions are apparent in Trump’s public actions. In April, the Commerce Department cut off Chinese telecommunications company ZTE Corp. from its American suppliers in response to what Commerce Secretary Wilbur Ross called “egregious” violations of U.S. sanctions against doing business in Iran and North Korea.

Trump reversed the action via tweet a week ago, declaring that it would cost “too many jobs in China.”

‘Broad Outline’

The Wall Street Journal reported that China and the U.S. have agreed on the “broad outline” of a settlement to the seven-year ban on ZTE. The paper cited unidentified people who knew of the deal in reporting that the outline would include a seven-year prohibition on ZTE purchasing American technology and call for major management changes.

Senator Marco Rubio, a Florida Republican who in recent days has been critical of how the Trump administration is handling trade issues with China, said that if the Journal story is true it means the U.S. has “surrendered” to the Chinese on ZTE issues. He said Congress will begin working on a veto-proof legislative fix.

“Making changes to their board & a fine won’t stop them from spying & stealing from us,” Rubio said Tuesday on Twitter. “But this is too important to be over.”

Asked about the report, a foreign ministry spokesman told reporters Tuesday in Beijing that the trade deal is still being negotiated, without providing more detail. He repeated prior statements that a consensus had been reached and the U.S. would send a delegation to China to work out the details.

“If these reports are true, the fines and board changes will do nothing to protect American national or economic security and are simply a diversion from the fact we have lost,” Senate Minority Leader Chuck Schumer of New York said in a statement. “President Xi has played President Trump and Secretary Mnuchin.”

While Schumer is a Democrat, he has consistently complimented Trump’s confrontation of China.

The White House said in a statement Monday that “the president and his entire administration are committed to ending decades of unfair and illegal trading practices that harm our farmers, workers and many other parts of the U.S. economy.”

“The president will not back down until we see meaningful and lasting change,” the White House added.

North Korea Spectre

Looming large over negotiations with China are separate but inextricable talks with North Korea over its nuclear weapons program. Trump is counting on Chinese President Xi Jinping to maintain pressure on North Korean leader Kim Jong Un, whose country is economically dependent on China.

Last week, North Korea’s state-run news agency and top officials began issuing threats to back out of a planned June 12 summit in Singapore between Trump and Kim. Trump suggested himself that Xi was pulling strings in Pyongyang to put pressure on U.S. trade negotiators.

White House officials think Trump could take a harder line on China after the North Korea summit, the people briefed on administration discussions said.

Some Republicans warned Trump that congressional seats held by their party that should have been safe in midterm elections were endangered by the trade dispute. Several farm-state lawmakers expressed relief that a damaging round of tariffs is — for now — no longer on the horizon.

‘Catastrophic’ Tariffs

“It would be catastrophic,” Senator Chuck Grassley of Iowa said. The Chinese had targeted soybeans, one of his state’s top exports to the country, as one product for retaliatory tariffs.

“We have made the case to the White House at least twice in the last four months,” he said in an interview.

But Trump loyalists including Bannon and campaign trade adviser Dan DiMicco were among the loudest critics of the president’s retreat.

“It gives the appearance that the Chinese are doing what they’ve always done to us: put in significant delay tactics,” DiMicco, who now serves on an advisory committee for the the U.S. Trade Representative, said in a phone interview. “It’s a road we’ve been down for 25 years and has gotten us nothing but trouble – -more theft of IP, more stealing and hacking of proprietary information of companies in this country, ever growing trade deficit in manufactured goods.”

Bloomberg.com

Building the Digital Silk Road Together: Kyrgyz Chapter Proposes Ideas for Internet Development in Central Asia at Cambridge University Forum

Central Asia, the most remote landlocked mountainous region in the world, has some of the most expensive Internet in global comparison. The cost of it can easily reach 10-20% of average monthly salary. In absolute terms, the price of the Internet can reach triple digits for 1 Mbps.

Acknowledging such challenges and considering the benefits that the Internet can bring, Central Asian governments are embarking on national digitalization strategies. The Kyrgyz Republic has launched a national program on digital transformation “Taza Koom” (“Transparent Society”). The program focuses on building an open government and a digital economy.

When it comes to digital development strategies, cooperation among countries is a mutually beneficial approach. To foster such collaboration, Cambridge University initiated a common platform called Digital Dialogue for Central Asia. The first meeting of this platform Making Inroads into Digital Transformation took place in Astana in April 2018.

Speaking at the forum on behalf of the Internet Society’s Kyrgyz Chapter, I proposed to jointly build the Digital Silk Road guided by the slogan: “free movement of ideas, people, creativity, technology and innovation”. Central Asia, with its favourable geographical location in Eurasia, could become the connecting host and focal point – a global digital hub – connecting different continents.

The region has talented people and beautiful nature that offers energy and inspiration. The Internet has become our ocean of possibilities and Central Asia can be the virtual window to the entire Eurasian region.

As a specific proposal for innovative cooperation, we proposed the idea of extending the network of fiber-optic communications lines through the territory of the Central Asia connecting the East and the West. Simultaneously, the World Bank is helping connect the South and the North through the Digital CASA project.

Another idea under implementation with the support of the Internet Society’s Beyond the Net Programme is the Digital Silk Road IXP in the Ferghana Valley, one of the most densely populated areas in the world, bordering three Central Asia countries of Kyrgyzstan, Tajikistan, and Uzbekistan.

Improving Internet connectivity in Central Asia would bring many economic opportunities and social benefits to the citizens of the Central Asian countries. This is a mutually beneficial effort that would help the region to leapfrog in terms of sustainable economic development. The region that was the world’s centre of culture and science during the times of the Ancient Silk Road gets a new chance to become one of the vibrant regions of the globe thanks to the Digital Silk Road.

The discussions on Internet development in Central Asia will continue at the Central Asian Internet Governance Forum on 21-22 June in Astana, Kazakhstan.

Learn more about Internet Governance and why every voice matters.

The post Building the Digital Silk Road Together: Kyrgyz Chapter Proposes Ideas for Internet Development in Central Asia at Cambridge University Forum appeared first on Internet Society.

Why Stephen Poloz isn’t ready just yet to pivot on interest rates

Normally, we’d preview the Bank of Canada’s next policy decision closer to the actual date. But all the relevant data has been published, so why wait? Unless the central bank scraps its story, it will leave the benchmark rate at 1.25 per cent on May 30.

Canada’s dollar dropped half a cent against its U.S. counterpart on Friday, probably because new readings on inflation and retail sales suggest the economy is chugging along, not racing ahead at a pace that would alarm policy makers. The prices of financial assets linked to short-term interest rates put odds of an interest-rate increase next week at about 25 per cent.

Bank of Canada Governor Stephen Poloz and his lieutenants on the Governing Council will take note of those prices. When Poloz abandoned explicit forward guidance, he said he hoped investors would think harder about the economy and spend less time trying to guess what he might be thinking. The market’s current message: There’s no need to change policy.

The sudden wobble in the renegotiation of the North American Free Trade Agreement might also have influenced traders. Policy makers have characterized uncertainty about trade policy as the biggest headwind facing the economy because it’s a chill on investment. So the shift to a protracted negotiation, after politicians spent several weeks suggesting a deal was close, is a negative.

But trade never was going to play a major role in the May decision. The vibe around NAFTA was turning positive a month ago, and the Bank of Canada opted to leave the benchmark rate unchanged. Officials said they would stop worrying about trade only when they saw evidence that business investment was holding up. RBC Capital Markets said last week that its monitoring of company announcements suggests a modest increase in spending. Still, definitive data won’t be available until after May 30: Statistics Canada will release its tally of second-quarter gross domestic product the following day, and the central bank’s quarterly Business Outlook Survey is due on June 29.

That’s why the policy announcement scheduled for July 11 is the earliest the Bank of Canada could raise interest rates and remain consistent with what it’s said about how it would react to trade news, positive or otherwise. To move in May would require a noticeable change in other economic variables and that hasn’t happened.

To be sure, oil prices are about $15 a barrel higher than central bank’s current forecast, which is based on prices a month ago.

That will prompt some debate over the next 10 days as policy makers deliberate over where the economy is headed. Normally, a shift of that magnitude would represent a material change in Canada’s prospects. Yet there has been no discernible change in the value of the currency, the TSX or the outlook for economic growth, according to economists at Bank of Montreal. Higher crude prices mean the value of exports is rising, but those gains are being offset by doubts about whether the increase will last and the future competitiveness of Canada’s high-cost oil industry.

One indicator that would outweigh concerns about business investment is inflation. The Bank of Canada’s primary mission is to keep the consumer price index advancing at an annual rate of about 2 per cent. Statistics Canada reported the CPI increased 2.2 per cent in April from a year earlier, the third-consecutive month that inflation exceeded the central bank’s target. That’s noteworthy because annual price increases had brushed the target only three times in the previous three years.

The upward pressure on inflation could make the May decision a closer call than currency traders seem to think. The Bank of Canada cares more about three specially crafted inflation gauges than it does the headline number, which is often distorted by surges and plunges in energy and prices. Two of those three measures now are above 2 per cent, and the third is at 1.9 per cent, so for the first time since early 2012 all four of the key price indicators have been at target or higher. Sebastien Lavoie, a former staffer at the BoC who now is chief economist at Laurentian Bank Securities in Montreal, calculated that prices for 24 of the items in StatCan’s CPI basket were increasing at a rate faster than 3 per cent in the first quarter, compared with 22 that did so in 2017. The number of items that were cheaper declined to 30 from 34. The change suggests inflation is heating up, if only gradually.

“We still think it is preferable for [Bank of Canada] officials to remain on the sidelines at the May 30 monetary policy decision meeting,” Lavoie said in a note to his clients. “This being said, this decision is likely to be a close call given that two of the three core inflation measures are now above the 2% target.”

The two other factors that dominate the Bank of Canada’s narrative about the economy are household debt and Poloz’s contention that lower interest rates might actually help policymakers stay ahead of inflation.

Household debt is about 100 per cent of GDP, compared to about 70 per cent in 2005, according to the International Monetary Fund’s new Global Debt Database. All that debt probably means consumers are more sensitive to changes in interest rates than they were in the past. So the BoC is looking for evidence that credit growth is slowing, but not so fast that it crushes domestic demand. And as you might expect, higher interest rates appear to be restraining consumer demand. StatsCan said last week that retail sales jumped 0.6 per cent in March from the previous month, but only because of a surge in automobile purchases. Most other retail segments are essentially unchanged from January 2017.

Sluggish retail sales support Poloz’s argument that Canada’s economy isn’t as strong as its 5.8-per-cent jobless rate suggests. He sees elevated rates of long-term and youth unemployment as marks of the financial crisis and the oil-price collapse. Higher interest rates risk killing growth that could pull more of those people into the labour market and Poloz has been crystal clear that he intends to do what he can to encourage that to happen.

“In some models of the economy, that would become a permanent thing, a hysteresis thing,” Poloz said of the elevated number of marginalized workers, while talking to me and a couple of other journalists in Washington last month. “Well, if it can happen in one direction, there is no reason with enough time that it can’t be reversed because it’s just people combined with new investment, just building more economic building blocks.”

He added: “You’ve got to believe we’re going to get a fair bit of that. But again I can’t guess how much, but I think it’s a really important phase.”

It will take some strong evidence to push Poloz off that course and there hasn’t been enough since then to force a pivot. Bottom line: low for a bit longer.

• Email: kcarmichael@nationalpost.com | Twitter:

With at least $1.3 billion invested globally in 2018, VC funding for blockchain blows past 2017 totals

Although bitcoin and blockchain technology may not take up quite as much mental bandwidth for the general public as it did just a few months ago, companies in the space continue to rake in capital from investors.

One of the latest to do so is Circle, which recently announced a $110 million Series E round led by bitcoin mining hardware manufacturer Bitmain. Other participating investors include Tusk VenturesPantera CapitalIDG Capital PartnersGeneral CatalystAccel PartnersDigital Currency GroupBlockchain Capital and Breyer Capital.

This round vaults Circle into an exclusive club of crypto companies that are valued, in U.S. dollars, at $1 billion or more in their most recent venture capital round. According to Crunchbase data, Circle was valued at $2.9 billion pre-money, up from a $420 million pre-money valuation in its Series D round, which closed in May 2016. According to Crunchbase data, only Coinbase and Robinhood — a mobile-first stock-trading platform which recently made a big push into cryptocurrency trading — were in the crypto-unicorn club, which Circle has now joined.

But that’s not the only milestone for the world of venture-backed cryptocurrency and blockchain startups.

Back in February, Crunchbase News predicted that the amount of money raised in old-school venture capital rounds by blockchain and blockchain-adjacent startups in 2018 would surpass the amount raised in 2017. Well, it’s only May, and it looks like the prediction panned out.

In the chart below, you’ll find worldwide venture deal and dollar volume for blockchain and blockchain-adjacent companies. We purposely excluded ICOs, including those that had traditional VCs participate, and instead focused on venture deals: angel, seed, convertible notes, Series A, Series B and so on. The data displayed below is based on reported data in Crunchbase, which may be subject to reporting delays, and is, in some cases, incomplete.

A little more than five months into 2018, reported dollar volume invested in VC rounds raised by blockchain companies surpassed 2017’s totals. Not just that, the nearly $1.3 billion in global dollar volume is greater than the reported funding totals for the 18 months between July 1, 2016 and New Year’s Eve in 2017.

And although Circle’s Series E round certainly helped to bump up funding totals year-to-date, there were many other large funding rounds throughout 2018:

There were, of course, many other large rounds over the past five months. After all, we had to get to $1.3 billion somehow.

All of this is to say that investor interest in the blockchain space shows no immediate signs of slowing down, even as the price of bitcoin, ethereum and other cryptocurrencies hover at less than half of their all-time highs. Considering that regulators are still figuring out how to treat most crypto assets, massive price volatility and dubious real-world utility of the technology, it may surprise some that investors at the riskiest end of the risk capital pool invest as much as they do in blockchain.

Notes on methodology

Like in our February analysis, we first created a list of companies in Crunchbase’s bitcoin, ethereum, blockchaincryptocurrency and virtual currency categories. We added to this list any companies that use those keywords, as well as “digital currency,” “utility token” and “security token” that weren’t previously included in the above categories. After de-duplicating this list, we merged this set of companies with funding rounds data in Crunchbase.

Please note that for some entries in Crunchbase’s round data, the amount of capital raised isn’t known. And, as previously noted, Crunchbase’s data is subject to reporting delays, especially for seed-stage companies. Accordingly, actual funding totals are likely higher than reported here.