Bitcoin tumbles on report China to shutter digital currency exchanges

Blockchain, a digital ledger of transactions underpinning bitcoin, has leapt to prominence as it enable users to track and record assets across all industries. (Reuters)
Updated 09 September 2017
0

Bitcoin tumbles on report China to shutter digital currency exchanges

NEW YORK: Bitcoin fell sharply on Friday after a report from a Chinese news outlet said China was planning to shut down local crypto-currency exchanges, although analysts said this was just a temporary setback.
Sources close to a cross regulators committee that oversees online finance activities told Chinese financial publication Caixin that authorities plan to shut key bitcoin exchanges in China.
Reuters was not immediately able to verify the report. But two sources in direct contact with officials at three Chinese bitcoin exchanges — Beijing-based OKCoin, Shanghai-based BTC China, and Beijing-based Huobi — said the platforms told them that they have not heard anything from the Chinese government.
The news follows China’s move earlier this week to ban so-called “initial coin offerings,” or the practice of creating and selling digital currencies or tokens to investors in order to finance start-up projects.
Greg Dwyer, business development manager at crypto-currency trading platform BitMEX, said there was confusion over whether China would close bitcoin exchanges following the ICO ban.
“If this turns out to be true, then this sell-off is substantiated, and we could see further downside over the weekend, as it could mean the large bitcoin/Chinese yuan exchanges will need to halt trading,” he added.
Bitcoin dropped to a low of $4,227 on the BitStamp platform and last traded at $4,309.80, down 6.6 percent. On September 2, it hit a record high of nearly $5,000.
Sharp losses such as Friday’s are par for the course for an asset like bitcoin, analysts said. Over the course of its eight-year history, bitcoin has on a daily basis risen as much as 18 percent and fallen as much as 13 percent.
Still, bitcoin was still up nearly 346 percent this year.
John Spallanzani, chief macro strategist at GFI Group, said Friday’s losses could be short-lived. “Bitcoin is here to stay,” he said.
Jehan Chu, a partner at Jen Advisers, a Hong Kong-based early-stage blockchain venture capital firm, noted that should China shut down bitcoin exchanges, it will not be the end of the crypto-currency world in the country.
Blockchain, a digital ledger of transactions underpinning bitcoin, has leapt to prominence as it enable users to track and record assets across all industries.
“This is just China pressing the ‘Pause button,” said Chu.
A big part of bitcoin’s recent surge was the ICO craze, which exploded this year. Bitcoins and ether, another digital currency, are used to purchase tokens for ICOs.
By mid-July, tech firms had raised about $1.1 billion in 89 coin sales this year, roughly 10 times more than in all of 2016, data from crypto-currency research firm Smith + Crown showed.


Palestinians in financial crisis after Israel, US moves

Updated 22 March 2019
0

Palestinians in financial crisis after Israel, US moves

  • A Ramallah-based economics professor said the Palestinian economy more generally, remain totally controlled by and reliant on Israel
  • Israeli-Palestinian peace efforts have been at a standstill since 2014

RAMALLAH, Palestinian Territories: The Palestinian Authority faces a suffocating financial crisis after deep US aid cuts and an Israeli move to withhold tax transfers, sparking fears for the stability of the West Bank.
The authority, headed by President Mahmud Abbas, announced a package of emergency measures on March 10, including halving the salaries of many civil servants.
The United States has cut more than $500 million in Palestinian aid in the last year, though only a fraction of that went directly to the PA.
The PA has decided to refuse what little US aid remains on offer for fear of civil suits under new legislation passed by Congress.
Israel has also announced it intends to deduct around $10 million a month in taxes it collects for the PA in a dispute over payments to the families of prisoners in Israeli jails.
In response, Abbas has refused to receive any funds at all, labelling the Israeli reductions theft.
That will leave his government with a monthly shortfall of around $190 million for the length of the crisis.
The money makes up more than 50 percent of the PA’s monthly revenues, with other funds coming from local taxes and foreign aid.

While the impact of the cuts is still being assessed, analysts fear it could affect the stability of the occupied West Bank.
“If the economic situation remains so difficult and the PA is unable to pay salaries and provide services, in addition to continuing (Israeli) settlement expansion it will lead to an explosion,” political analyst Jihad Harb said.
Abbas cut off relations with the US administration after President Donald Trump declared the disputed city of Jerusalem Israel’s capital in December 2017.
The right-wing Israeli government, strongly backed by the US, has since sought to squeeze Abbas.
After a deadly anti-Israeli attack last month, Prime Minister Benjamin Netanyahu said he would withhold $138 million (123 million euros) in Palestinian revenues over the course of a year.
Israel collects around $190 million a month in customs duties levied on goods destined for Palestinian markets that transit through its ports, and then transfers the money to the PA.
Israel said the amount it intended to withhold was equal to what is paid by the PA to the families of prisoners, or prisoners themselves, jailed for attacks on Israelis last year.
Many Palestinians view prisoners and those killed while carrying out attacks as heroes of the fight against Israeli occupation.
Israel says the payments encourage further violence.
Abbas recently accused Netanyahu’s government of causing a “crippling economic crisis in the Palestinian Authority.”
The PA also said in January it would refuse all further US government aid for fear of lawsuits under new US legislation targeting alleged support for “terrorism.”

Finance Minister Shukri Bishara announced earlier this month he had been forced to “adopt an emergency budget that includes restricted austerity measures.”
Government employees paid over 2,000 shekels ($555) will receive only half their salaries until further notice.
Prisoner payments would continue in full, Bishara added.
Nasser Abdel Karim, a Ramallah-based economics professor, told AFP the PA, and the Palestinian economy more generally, remain totally controlled by and reliant on Israel.
The PA undertook similar financial measures in 2012 when Israel withheld taxes over Palestinian efforts to gain international recognition at the United Nations.
Abdel Karim said such crises are “repeated and disappear according to the development of the relationship between the Palestinian Authority and Israel or the countries that support (the PA).”
Israel occupied the Gaza Strip and the West Bank, including now annexed east Jerusalem in the Six-Day War of 1967 and Abbas’s government has only limited autonomy in West Bank towns and cities.
“The problem is the lack of cash,” economic journalist Jafar Sadaqa told AFP.
He said that while the PA had faced financial crises before, “this time is different because it comes as a cumulative result of political decisions taken by the United States.”
Abbas appointed longtime ally Mohammad Shtayyeh as prime minister on March 10 to head a new government to oversee the crisis.
Abdel Karim believes the crisis could worsen after an Israeli general election next month “if a more right-wing Israeli government wins.”
Netanyahu’s outgoing government is already regarded as the most right-wing in Israel’s history but on April 9 parties even further to the right have a realistic chance of winning seats in parliament for the first time.
Israeli-Palestinian peace efforts have been at a standstill since 2014, when a drive for a deal by the administration of President Barack Obama collapsed in the face of persistent Israeli settlement expansion in the West Bank.