Bitcoin hits new record high as warnings grow

The value of bitcoin has climbed almost 80 percent so far in December. (AFP)
Updated 15 December 2017
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Bitcoin hits new record high as warnings grow

LONDON: Bitcoin blasted to another all-time high of almost $18,000 on the Bitstamp exchange on Friday, up 9 percent on the day, as warnings grew over the risks of investing in the highly volatile and speculative instrument.
The cryptocurrency’s staggering recent price rises — more than 1,700 percent since the start of the year — have driven worries that the market is a bubble that could burst in spectacular fashion.
Bitcoin has climbed almost 80 percent so far in December alone, putting it on track for its best month in percentage terms since December 2013.
On Friday it reached as high as $17,900 on the Luxembourg-based Bitstamp exchange.
While bitcoin has added another fifth to its value since Monday, trading has been slightly calmer than the wild price swings the market has seen in recent weeks, with volatility lower since the launch of bitcoin futures from CBOE Global Markets on Sunday.
Market-watchers said bitcoin’s price was being lifted by the launch of rival CME Group’s bitcoin futures contracts on Sunday.
“The hope (is) that futures signal the unlocking of institutional money into the digital arena and (that there will be) a rapid demand increase and ratification of the technology and its principles,” said Charles Hayter, founder of industry website Cryptocompare.
But outside of the crypto market, worries continue to grow about the amount of money piling into the space.
A study by Anglia Ruskin University, Trinity College Dublin and Dublin City University released on Friday said bitcoin could pose a threat to the financial stability of traditional currencies and markets.
“Our evidence finds that the price of bitcoin has been artificially inflated by speculative investment, putting it in a bubble,” said Larisa Yarovaya, one of the report’s authors and a lecturer at Anglia Ruskin University.
“Although bitcoin is not regulated by governments, it could still have a knock-on effect on traditional markets due to the interconnectedness of cryptocurrency markets with other financial assets.”
Others, however, say bitcoin’s total market size — around $300 billion — mean the impact of any future price collapse would not be large enough to have a knock-on effect on financial stability.
The BBC reported late on Thursday that the head of Britain’s Financial Conduct Authority, Andrew Bailey, had warned that bitcoin buyers should be prepared for the possibility that they could “lose all their money.”
Outages on some of the world’s biggest exchanges this week, which left millions of investors unable to access their funds during periods when trading volumes were high, have also fueled concerns about the fragility of the market’s infrastructure.
— REUTERS


Egyptian firms to build $3bn power plant on Tanzanian world heritage site

Updated 17 min 23 sec ago
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Egyptian firms to build $3bn power plant on Tanzanian world heritage site

  • Arab Contractors and El Sewedy to build plant
  • Plan triggers protests from environmentalists

DAR ES SALAAM: Tanzania has signed a deal with Egypt’s El Sewedy Electric and Arab Contractors to build a $3 billion hydroelectric plant on a World Heritage site in the country, that will more than double Tanzania’s power generation capacity.
The project has faced opposition from conservationists, who say the construction of a dam on a river that runs through the Tanzania’s Selous Game Reserve, known for its elephants, black rhinos and giraffes, as well as many other species, could affect the wildlife and their habitats.
Energy Minister Medard Kalemani, said in comments broadcast on state television on Wednesday that the plant would have an installed capacity of 2,115 megawatts, calling it “a very huge dam project.”
Representatives of state-run Tanzania Electric Supply Co, El Sewedy and Arab Contractors signed the agreement in the presence of President John Magufuli and Egyptian Prime Minister Mostafa Madbouly, TV broadcasts showed.
Magufuli said the project will be wholly funded from taxes. Monthly tax revenue collection has increased from 850 billion shillings ($370.37 million) per month before he came to power in late 2015, to an average of 1.3 trillion shillings ($566.45 million)under his administration, he said.
“When we asked for financing for this project, the lenders refused to give us money but thanks to improved tax collection, we are able to finance this project using our own resources,” he said.
Arab Contractors will have a 55 percent stake in the project and El Sewedy 45 percent, El Sewedy said on Tuesday.
El Sewedy said the Egyptian stock market had halted trading of its shares pending details on the deal it had signed.
Covering 50,000 square kilometers, the Selous Game Reserve is one of the largest protected areas in Africa, according to UNESCO.
The World Wildlife Fund conservation group said in a report in July last year the proposed hydropower dam “puts protected areas of global importance, as well as the livelihoods of over 200,000 people who depend upon the environment, at risk.”
Officials at the WWF Tanzania office were not immediately available to comment on Wednesday’s deal.
Magufuli dispelled the environmental concerns, saying Tanzania had allocated 32.5 percent of its total land mass to conservation.
“The dam will become a major source of water and the cheap electricity to be produced from the dam will reduce the number of people who cut trees for firewood,” he said.
Magufuli, nicknamed “the bulldozer,” for his forceful leadership style, has in the past pushed for the project to start as quickly as possible to speed up development.
He has introduced anti-corruption measures and tough economic reforms and pushed for swift completion of big infrastructure projects including roads, railways and airports.