Bitcoin set for record losing streak after ‘stablecoin’ collapse

Bitcoin set for record losing streak after ‘stablecoin’ collapse
Crypto-related stocks have taken a pounding in recent weeks (Shutterstock)
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Updated 13 May 2022

Bitcoin set for record losing streak after ‘stablecoin’ collapse

Bitcoin set for record losing streak after ‘stablecoin’ collapse
  • Bitcoin edges back up from 16-month low
  • TerraUSD collapse shakes crypto market
  • Analysts say impact on traditional markets limited

SINGAPORE/HONG KONG/LONDON: Cryptocurrencies nursed large losses on Friday, with Bitcoin back above $30,000 and but still set for a record losing streak after the collapse of TerraUSD, a so-called stablecoin, rippled through cryptocurrency markets, according to Reuters.

Crypto assets have also been swept up in broad selling of risky investments on worries about high inflation and rising interest rates. Sentiment is particularly fragile, as tokens supposed to be pegged to the dollar have faltered.

Bitcoin, the largest cryptocurrency by total market value, managed to bounce in the Asia session and traded around $30,500 at 1140 GMT. It has staged something of a recovery from a 16-month low of around $25,400 reached on Thursday.

But it remains far below week-ago levels of around $40,000 and, unless there is a rebound in weekend trade, is headed for a record seventh consecutive weekly loss.

“I don’t think the worst is over,” said Scottie Siu, investment director of Axion Global Asset Management, a Hong Kong based firm that runs a crypto index fund.

“I think there is more downside in the coming days. I think what we need to see is the open interest collapse a lot more, so the speculators are really out of it, and that’s when I think the market will stabilize.”

Beyond Bitcoin 

Crypto-related stocks have taken a pounding, with shares in broker Coinbase steadying overnight but still down by half in little more than a week.

In Asia, Hong Kong-listed Huobi Technology and BC Technology Group, which operate trading platforms and other crypto services, eyed weekly drops of more than 20 percent.

But broader financial markets have so far seen little knock-on effect from the cryptocurrency crash.

“Crypto is still tiny and crypto integration within broader financial markets is still infinitesimally small,” said James Malcolm, head of FX strategy at UBS.

“This idea that what goes on in crypto stays in crypto – that’s in many ways where we still are at the moment.”

Stablecoin Squeeze 

Selling has roughly halved the global market value of cryptocurrencies since November, but the drawdown has turned to panic in recent sessions with the squeeze on stablecoins.

Stablecoins are tokens pegged to the value of traditional assets, often the US dollar, and are the main medium for moving money between cryptocurrencies or to convert balances to fiat cash.

Cryptocurrency markets were rocked this week by the collapse of TerraUSD, which broke its 1:1 peg to the dollar.

The coin’s complex stability mechanism, which involved balancing with a free-floating cryptocurrency called Luna, stopped working when Luna came under selling pressure. TerraUSD last traded around 9 cents, while Luna plunged close to zero.

Tether, the biggest stablecoin and one whose developers say is backed by dollar assets, has also come under pressure and fell to 95 cents on Thursday, according to CoinMarketCap data, but was back at $1 on Friday.

“Over half of all bitcoin and ether traded on exchanges are versus a stablecoin, with USDT or Tether taking the largest share,” analysts at Morgan Stanley said in a research note.

“For these types of stablecoins, the market needs to trust that the issuer holds sufficient liquid assets they would be able to sell in times of market stress.”

Tether’s operating company says it has the necessary assets in Treasuries, cash, corporate bonds and other money-market products.

But Tether is likely to face further tests if traders keep selling, and analysts are concerned that stress could spill over into money markets if pressure forces more and more liquidation.

Ratings agency Fitch said in a note on Thursday that there could be “significant negative repercussions” for cryptocurrencies and digital finance if investors lose confidence in stablecoins.

“Many regulated financial entities have increased their exposure to cryptocurrencies, defi and other forms of digital finance in recent months, and some Fitch-rated issuers could be affected if crypto market volatility becomes severe,” it said.

However, Fitch said that weak links between crypto markets and regulated financial markets will limit the potential of crypto market volatility to cause wider financial instability. (Reporting by Tom Westbrook and Alun John; Editing by Bradley Perrett and Emelia Sithole-Matarise)


PIF, Cain International invest $900m in Aman Group to boost its global expansion

PIF, Cain International invest $900m in Aman Group to boost its global expansion
Updated 12 sec ago

PIF, Cain International invest $900m in Aman Group to boost its global expansion

PIF, Cain International invest $900m in Aman Group to boost its global expansion

RIYADH: Saudi Arabia’s Public Investment Fund and Cain International have invested $900 million in Aman Group to help accelerate the global expansion of the hospitality and lifestyle brand management company.

The investment will be used to enhance the existing portfolio, drive the construction of the pipeline of Aman and Janu destinations, as well as support the acquisition and development of additional sites, according to a statement issued on Monday. 

Following the new funding, the company is now valued at over $3billion.

Aman is a renowned collection of 34 hotels across 20 countries, 12 of which include Aman Branded Residences, with nine further hotels and residences projects under construction and a committed pipeline of additional destinations in countries including USA, Japan, Mexico, South Korea, Saudi Arabia, and European destinations, among others. 

Vlad Doronin, owner, chairman and CEO of Aman Group, said: “The investment from PIF and Cain International is a vote of confidence in my vision and the work the team has done over the last eight years, cementing the brand’s evolution and ability to deliver this vision at pace.”

Commenting on the investment, Turqi Al-Nowaiser, deputy governor and head of International Investments Division at PIF, said: “The investment is in line with PIF’s strategy to invest in promising sectors to achieve sustainable, attractive returns in Saudi Arabia and globally.”

“We are excited to be investing in this phenomenal brand and look forward to building upon our longstanding partnership with Vlad and his team,” said Jonathan Goldstein, CEO and co- founder of Cain International. 


PIF-owned Helicopter Co. to add Airbus ACH160 to its fleet 


PIF-owned Helicopter Co. to add Airbus ACH160 to its fleet 

Updated 15 August 2022

PIF-owned Helicopter Co. to add Airbus ACH160 to its fleet 


PIF-owned Helicopter Co. to add Airbus ACH160 to its fleet 


RIYADH: The Helicopter Co., fully owned by the Public Investment Fund, has announced that Airbus ACH160 multi-purpose Helicopter will become part of its fleet in early 2023.

The new ACH160 is one of the world’s most technologically advanced helicopters with a new rotor blade design that results in significantly reduced noise, according to a statement posted on LinkedIn.

The company will obtain six new ACH160 helicopters, with the first being set to join the fleet early in 2023.

The new helicopter comes in line with the firm’s aims to deliver an improved environmental footprint and lower fuel consumption.


Macro Snapshot — China unexpectedly cuts key rates as economic data disappoints; Japan’s economy expands

Macro Snapshot — China unexpectedly cuts key rates as economic data disappoints; Japan’s economy expands
Updated 15 August 2022

Macro Snapshot — China unexpectedly cuts key rates as economic data disappoints; Japan’s economy expands

Macro Snapshot — China unexpectedly cuts key rates as economic data disappoints; Japan’s economy expands

CAIRO: China’s central bank cut key lending rates in a surprise move on Monday to revive demand as data showed the economy slowing in July, with factory and retail activity squeezed by Beijing’s zero-COVID policy and a property crisis.

The grim set of figures indicate the world’s second largest economy is struggling to shake off the June quarter’s hit to growth from strict COVID-19 restrictions, prompting some economists to downgrade their projections.

Egypt’s unemployment rate  

Egypt’s unemployment rate in April to June remained unchanged from the previous quarter at 7.2 percent, the country’s Central Agency for Public Mobilization And Statistics announced on Monday.

Thai GDP grows 

Thailand’s economy expanded at the fastest pace in a year in the second quarter as eased COVID-19 restrictions boosted activity and tourism, reinforcing views that more rate hikes will be needed to curb inflationary pressures.

The Southeast Asia’s second-largest economy is making a steady recovery after the lifting of pandemic curbs but still faces headwinds ranging from inflation at 14-year highs to China’s slowdown and weaker global demand. Read full story

The government slightly revised its 2022 economic growth forecast to 2.7 percent to 3.2 percent from an earlier 2.5 percent to 3.5 percent range. Last year’s 1.5 percent growth was among the slowest in Southeast Asia.

Japan’s economy expands

Japan’s economy expanded an annualized 2.2 percent in the April-June period to mark the third straight quarter of expansion on solid private consumption, government data showed on Monday.

The increase in gross domestic product was slower than a median market forecast for a 2.5 percent expansion. It translated into quarterly growth of 0.5 percent against market forecasts for a 0.6 percent rise.

Private consumption rose 1.1 percent in the April-June period from the previous quarter, compared with a median market forecast for a 1.3 percent increase, the data showed.

 

 


Fitch upgrades Oman rating to BB

Fitch upgrades Oman rating to BB
Updated 15 August 2022

Fitch upgrades Oman rating to BB

Fitch upgrades Oman rating to BB

DUBAI: Global rating agency Fitch Ratings upgraded the long-term foreign currency issuer default rating on Oman to BB from BB-.

The outlook on Oman is stable, Fitch said on Monday.

The agency said the upgrade “reflects significant improvements in Oman’s fiscal metrics, a lessening of external financing pressures and ongoing efforts to reform public finances.”

A relatively small crude producer when compared to its wealthier Gulf neighbors, Oman is more sensitive to oil price swings, meaning it was hit especially hard by the pandemic-driven price crash in 2020.

But higher oil prices this year along with fiscal reforms, Fitch said, will support the sultanate to register its first budget surplus since 2013 and contain debt levels over the next few years.

“Higher oil revenue will underpin budget surpluses in 2022 and 2023,” Fitch said.


IT consulting firm Saudi Networkers to list on Nomu on Aug. 17

IT consulting firm Saudi Networkers to list on Nomu on Aug. 17
Updated 15 August 2022

IT consulting firm Saudi Networkers to list on Nomu on Aug. 17

IT consulting firm Saudi Networkers to list on Nomu on Aug. 17

RIYADH: Saudi Networkers Services Co., a Riyadh-based technical consulting services provider, will list its shares on the Kingdom’s parallel Nomu market on Aug. 17, according to a bourse filing.

The initial public offering price was earlier set at SR71 ($19) per share, yielding strong demand from qualified investors with the IPO being 223 percent oversubscribed.

Led by Aldukheil Financial Group, the offering of 1.5 million shares, or a 25 percent stake, was limited to qualified investors.

Ahead of its IPO, Saudi Networkers posted a 28 percent drop in profit, from SR39.1 million to SR28.3 million, for the year 2021, due to a rise in the cost of revenue.