The rise of cryptocurrencies: Year in Review

The rise of cryptocurrencies: Year in Review
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Updated 09 January 2022

The rise of cryptocurrencies: Year in Review

The rise of cryptocurrencies: Year in Review
  • The year witnessed digital coins gaining global acceptance as legal tender

RIYADH: 2021 was a record year for cryptocurrency, which saw the market value for digital coins briefly top $3 trillion (SR11.3 trillion) in November.

Bitcoin, the largest cryptocurrency by market value and the second-largest cryptocurrency, ether, also hit all-time highs. While altcoins and the meme-inspired Dogecoin gained traction.

Other digital assets, such as nonfungible tokens, or NFTs, sold for millions of dollars alongside fine art in major auction houses. A digital collage by US artist Beeple sold at Christie’s for $69.3 million in March.

In addition to art, NFTs for use in video games to buy digital land or other items soared in value.

And El Salvador became the first country to accept Bitcoin as legal tender in September, in a move that saw the government provide digital wallets giving away $30 in Bitcoin to every citizen. 

HIGHLIGHT

El Salvador became the first country to accept bitcoin as legal tender in September, in a move that saw the government provide digital wallets giving away $30 in Bitcoin to every citizen.

Blockchain-based applications, including decentralized finance, or DeFi, garnered interest from both retail and institutional investors, pushing the growth of Web3, which is the decentralized version of the internet based on blockchain technology that powers NFTs and underpins cryptocurrencies.

All of this helped push cryptocurrency into the mainstream in 2021.

Here are the crypto highlights of 2021.

 

Most searched cryptocurrencies

Receiving an average of 1,100,000 Google searches per month, Bitcoin was the most Googled cryptocurrency in the UK in 2021, according to a new study.




A representation of the virtual cryptocurrency Bitcoin is seen in this picture illustration taken June 14, 2021. (REUTERS/File Photo)

Research conducted by Bacancy, a software firm, added that Dogecoin is the second most searched digital coin in the UK with a monthly average of 596,000 Google searches over the past year.

In third place with 378,000 searches is Ethereum, the blockchain-based software platform for receiving and sending value globally.

With 189,000 searches per month, the Shiba Inu token, another digital coin with a dog theme, was in fourth place.

Cardano is the fifth most-searched, with 187,000, followed by XRP in sixth place with 185,000 monthly searches and in seventh place is Ripple with 83,000 Google searches in 2021.




A representation of the virtual cryptocurrency Bitcoin is seen in this picture illustration taken October 19, 2021. (REUTERS/Edgar Su/File Photo)
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Meanwhile, Dogecoin has overtaken Bitcoin in popularity in the US in 2021 as it is the most searched cryptocurrency in the country’s 23 states, according to research.

This survey was conducted by financial adviser The Advisor Coach to establish the cryptocurrency each US might want to invest in based on searches.

Analysis of the Google Trends data revealed that Dogecoin had the highest number of states who were interested in investing in the digital coin with a total of 23 states, including Illinois, Florida, Hawaii and New Jersey. The rise in interest can be partially attributed to the endorsement of US billionaire Elon Musk who said in December that his electric carmaker Tesla would accept Dogecoin as a form of payment.

Bitcoin was the second most popular with 10 states looking up investments opportunities in cryptocurrency, including Connecticut, Alaska, Mississippi, and New Hampshire.

A total of eight states inquired into Ethereum, the third-highest spot in the research, with states such as Georgia, Louisiana, Virginia and Ohio showing an interest.

 

Who’s mining

Most Bitcoin mining took place in China, according to internet protocol, or IP, addresses that used the mathematical functions needed to search for the digital coin.

In 2021, the world’s top Bitcoin mining pools all came from China, with five pools being responsible for over half of the cryptocurrency's total hash, or mathematical mining functions. 




Cryptocurrency mining facilities are seen in Pristina, Kosovo. (REUTERS/Hazir Reka/File Photo)

This is likely related to energy prices around the world as the cost of electricity in Germany is more than 10 times the price in China. Successful mining for Bitcoin uses banks of high-powered computers that use a great deal of energy.

Digital coin mining companies bought a lot of hardware this year, which resulted in the price of some mining accessories jumping roughly 10 percent a week in 2021, according to Statista.

However, on the currency’s dark side, the US Internal Revenue Service revealed in November that $3.5 billion of cryptocurrency was seized last year.

This represents 93 percent of all funds seized by the criminal investigation unit during 2021.

The agency expects to confiscate billions more dollars in cryptocurrency next year.

“I expect a trend of crypto seizures to continue as we move forward into fiscal year 2022. We are seeing crypto involved in a number of our crimes as we move forward,” IRS Criminal Investigation Chief Jim Lee said.


Electric car construction will drive aluminum prices to 30 year high: Mining company CEO

Electric car construction will drive aluminum prices to 30 year high: Mining company CEO
Updated 28 January 2022

Electric car construction will drive aluminum prices to 30 year high: Mining company CEO

Electric car construction will drive aluminum prices to 30 year high: Mining company CEO

Aluminum is set to reach its highest price for more than 30 years, according to the CEO of mining company Eurasian Resources Group.

In 2021, the price of the metal surged to a 13-year high, gaining over 40 percent year-on-year.

Benedikt Sobotka believes a combination of Chinese demand, a global focus on renewables, and rising electric vehicle production will further push up the cost of aluminum over the upcoming 12 months.

In a report, he said: “We believe that aluminum has strong potential to outperform other LME base metals in 2022, having again breached the important milestone of USD 3,000/tonne at the start of this year. The market will remain in a sizable deficit for the second consecutive year, with visible inventories at the lowest level since the global financial crisis.”

His comments came after a year in which the cost of metals and other commodities rose, with copper, iron ore and natural gas prices hitting all-time highs.  

“The main driving forces for these markets were supply chain disruptions, production restrictions in China, the energy crisis, a stimulus-led consumption boom in the US and depleted inventories,” said Sobotka.

As well as aluminum, Sobotka forecasts an increase in the cost of cobalt, saying that its 119 percent price surge through the course of 2021 emanates “a very loud and clear message: the market is severely short of the blue metal.”

“As we move into the New Year, there are no discernible signs of any fundamental easing, with prices remaining on an upward trajectory as consumers skirmish to secure sparsely available spot units – a situation that will undoubtedly persist throughout 2022 and beyond,” he added.


Gold demand hits highest level in more than two years

Gold demand hits highest level in more than two years
Updated 28 January 2022

Gold demand hits highest level in more than two years

Gold demand hits highest level in more than two years

Rising inflation and the post-pandemic economic uncertainty has sent demand for gold to a two year high, according to the World Gold Council.

The organisation’s latest report shows the appetite for the metal  reached 1,147 tonnes in the last three months of 2021, its highest level since the second quarter of 2019 and an increase of almost 50 percent year-on-year.

Gold bar and coin demand rose 31 percent to an eight-year high of 1,180 tonnes, while the  jewellery sector rebounded to match 2019’s pre-pandemic total of 2,124 tonnes.

For the twelfth consecutive year, central banks were net purchasers of gold, adding 463 tonnes to their holdings — 82 percent higher than 2020. 

Central banks from both emerging and developed markets added to their gold reserves, lifting the global total to a near 30-year high.

Louise Street, a senior analyst at the World Gold Council, said: “On the investment side, the tug of war between persistent inflation and rising rates created a mixed picture for demand. Increasing rates fuelled a risk-on appetite among some investors, reflected in ETF (exchange-traded fund) outflows. 

“On the other hand, a search for safe haven assets led to a rise in gold bar and coin purchases, buoyed by central bank buying.

“Declines in ETFs were offset by demand growth in other sectors. Jewellery reached its highest level in nearly a decade as key markets like China and India regained economic vibrancy.”

Street added that the World Gold Council is expecting demand to fluctuate in 2022, with how central banks deal with persistent high levels of inflation a key factor affecting the sector.

Likewise, the jewellery market’s strength could be hampered if new COVID variants once again restrict consumer access.

 


Alturki migrating recently-bought US drilling firm to Dhahran

Alturki migrating recently-bought US drilling firm to Dhahran
Updated 28 January 2022

Alturki migrating recently-bought US drilling firm to Dhahran

Alturki migrating recently-bought US drilling firm to Dhahran

DAMMAM: Investment firm Alturki Holding is shifting the base of a US drilling firm it recently acquired to Dhahran, according to the head of the company.

Speaking to Arab News, Alturki’s CEO Rami Alturki said the move was related to Newsco International Energy Services, which it snapped up in October 2021 for an undisclosed amount. 

The comments came on the sideline of the Saudi Aramco hosted In-Kingdom Total Value Add forum, held in Dhahran.

Referring to Newsco, Alturki said: “We are in the process of migrating the company to be based here in Dhahran.” 

Alturki also commented on another of his firm’s subsidiaries, Sawafi Borets, which was awarded a contract to create a $50 million facility in King Salman Energy Park, or SPARK, to assemble electrical submersible pumps.

“We're also very involved on the construction side, building facilities for Aramco across the Kingdom,” he added. 


Iraqi ‘super app’ Baly raises $10.5m in funding round

Iraqi ‘super app’ Baly raises $10.5m in funding round
Updated 28 January 2022

Iraqi ‘super app’ Baly raises $10.5m in funding round

Iraqi ‘super app’ Baly raises $10.5m in funding round

RIYADH: Iraq’s first super app Baly raised an historic $10.5 million in its latest funding round — the most ever for a tech startup in the country. 

Baly launched ride-hailing as its first service in Baghdad last month, and already boasts thousands of rides each day, according to a press release. 

Additional services, like food and grocery delivery, will go live in the next few weeks, and Baly will expand to cover more cities in the country.

The startup will be able to use the new funds to support its scaling efforts in operations and market growth, the company said.

Baly Managing Director Matteo Mantovani said: “Iraq is home to 40 million people, with over 90 percent smartphone penetration amongst those aged 17-40. 

“With a young, urbanized population, it is the perfect place to revolutionize the economy through digital services.

Arnd Lodowicks, chief financial officer of investor Rocket Internet, said: “Baly is for us a world-class team in an extremely exciting and promising market. We are looking forward to supporting  the company on its mission to become the leading super app of Iraq.”

Venture capital funding in Iraq reached record highs in 2021, despite the political and socio-economic challenges in the region, according to Baly.

It crossed the $5 million mark over five deals in 2021, recording a 170 percent year-on-year jump in VC funding.

Kingsway Capital, MSA Capital, Global Founders Capital, Vostok Ventures, Majid Al Futtaim, and March Holding all participated in the funding round for Baly.


HP wins fraud case against UK tech tycoon Mike Lynch

HP wins fraud case against UK tech tycoon Mike Lynch
Updated 28 January 2022

HP wins fraud case against UK tech tycoon Mike Lynch

HP wins fraud case against UK tech tycoon Mike Lynch

LONDON: Hewlett-Packard won the majority of its civil case against British tech tycoon Mike Lynch over its acquisition of Autonomy in 2011, a London judge said on Friday, though damages will be considerably less than the $5 billion claimed.
The court’s decision comes on the same day as Britain has to decide whether or not to extradite Lynch to the United States after almost a decade of bitter wrangling over who was to blame for the failure of Hewlett-Packard’s $11 billion takeover of Lynch’s Autonomy.
HP had sued Lynch, arguing that he had fraudulently inflated the value of Autonomy before he sold it to the US tech giant. Lynch had argued that HP mismanaged the acquisition.
High Court Justice Robert Hildyard said HP had substantially succeeded in their case but the damages would be less than they were demanding.
Lynch faces separate criminal charges in the US, including wire fraud and securities fraud.
A year after acquiring Autonomy, HP threw out the architect of the deal which was supposed to help transform the computer and printer maker, one of Silicon Valley’s original companies, into a more profitable group centered on business software and services.
It wrote down the value of Autonomy by $8.8 billion and sought damages of around $5 billion from Lynch and his colleague Sushovan Hussain, alleging they inflated the value of Autonomy before selling it. Hussain was convicted in the United States in 2019.
Lynch has denied all the allegations.
Lynch is due to hear on Friday whether Britain’s interior minister Priti Patel has approved the extradition request to the United States.
A court has given Patel until midnight on Friday to make a decision, although Lynch could appeal any ruling that goes against him. The US charges carry a maximum term of 20 years imprisonment.
Lynch is one of Britain’s leading tech bosses. He founded Autonomy which was capable of searching and organizing unstructured information, such as telephone conversations.
The 56-year-old’s doctoral thesis remains one of the most consulted at Cambridge University and his success, including the around $800 million he made from his stake in Autonomy, elevated his position in Britain, giving him a place on government advisory boards.
Lynch was also central to the creation of DarkTrace , a cybersecurity firm that listed on the stock market last year. Lynch and his wife Angela Bacares own nearly 16 percent of DarkTrace, according to Refinitiv