Cryptocurrencies are struggling to cope up with volatility owing to their niche nature and small market size, said the founder and the chief executive of Keynote, one of the world's biggest organisers of cryptocurrency events.
Compared with a traditional big-ticket stock market, which has huge buffers of funds to support it, the cryptocurrency industry is not big enough yet and doesn't have enough money to absorb shocks, Moe Levin said.
“It's a market that isn't ready to handle a huge amount of money yet, so it does a bad job at handling quick and sharp price increases," he told The National at the Fantom Developer Conference in Abu Dhabi.
"Then there's momentum, hype and people jumping on the bandwagon. Those are the people who lose more money because they buy at the wrong time and then the market collapses.”
“It's a market that isn't ready to handle a huge amount of money yet, so it does a bad job at handling quick and sharp price increases. Then there's momentum, hype and people jumping on the bandwagon - and those are the people who lose more money because they buy at the wrong time and then the market collapses,” he said.
Cryptocurrencies have exploded in popularity over the past year as investors parked their spare cash in the asset amid the Covid-19 pandemic. Bitcoin, the biggest cryptocurrency, hit a new record of $66,976 last week after the debut of the first futures exchange-traded fund of the digital currency on Wall Street but has experienced wild swings in the past year.
The volatility of assets such as Bitcoin and Ethereum has often been a deterrent for widespread acceptance, with critics such as top US economist Nouriel Roubini saying it is "too volatile" to be considered a currency.
Mr Levin admitted that these assets do have drawbacks, but a widening developer base and an aggressive information campaign to educate investors could turn this around sooner.
If people opt to rely on hype rather than market fundamentals, investments would be put under severe jeopardy, he said.
Bitcoin and other cryptocurrencies are notorious for moving in tandem with sensationalist statements. In June, Tesla chief executive Elon Musk tweeted a broken-heart emoji, apparently signalling a split from Bitcoin owing to its high energy consumption. The move dragged the cryptocurrency down 5.4 per cent.
Ten days later, he reversed course, saying Tesla would accept cryptos when miners use clean energy, sending Bitcoin's price up 12.4 per cent.
On Tuesday, another cryptocurrency, Shiba Inu, lost 20 per cent of its value after Mr Musk replied "none" to a tweet asking if he held any of that asset.
Another “gamble” people take when investing is when they are more interested in making money quickly than the pace of technology, Mr Levin said.
“This is not smart investing. It’s not understanding the ecosystem; this is just gambling with cryptos.”
Mr Levin, who has been organising events dedicated to the cryptocurrency market for almost a decade now, was part of the team that launched Ethereum, currently the world’s second-largest cryptocurrency, in 2014.
Having advised corporates, regulators and governments, including in the US and Canada, he has also worked with UAE blockchain projects in 2015, most notably with BitOasis, a cryptocurrency platform in the UAE.
Cryptocurrencies are not licensed by the UAE Central Bank, although a number of cryptocurrency exchanges have been given permission to operate within the financial free zones. The UAE dirham is the only legal tender in the country that is recognised by the Central Bank.
There's momentum, hype and people jumping on the bandwagon. Those are the people who lose more money because they buy at the wrong time and then the market collapses
Moe Levin,
founder and chief executive of Keynote
But despite his experience, the one thing he cannot predict is in which direction the market will go, given the fast pace of innovation and the huge number of operators entering the crypto game.
There were 6,826 cryptocurrencies globally as of October 21, 10,242 per cent higher from 2013's 66 companies, according to data from Statista.
“The market is moving really, really fast. There was a time that I knew everybody in the industry. Now, you have millions of people who know about cryptos,” Mr Levin said.
“More people are joining the industry at such a fast rate, with many even leaving their jobs for cryptocurrencies.”
UAE currency: the story behind the money in your pockets
BEACH SOCCER WORLD CUP
Group A
Paraguay
Japan
Switzerland
USA
Group B
Uruguay
Mexico
Italy
Tahiti
Group C
Belarus
UAE
Senegal
Russia
Group D
Brazil
Oman
Portugal
Nigeria
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
LOVE%20AGAIN
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The biog
Name: James Mullan
Nationality: Irish
Family: Wife, Pom; and daughters Kate, 18, and Ciara, 13, who attend Jumeirah English Speaking School (JESS)
Favourite book or author: “That’s a really difficult question. I’m a big fan of Donna Tartt, The Secret History. I’d recommend that, go and have a read of that.”
Dream: “It would be to continue to have fun and to work with really interesting people, which I have been very fortunate to do for a lot of my life. I just enjoy working with very smart, fun people.”
The Lowdown
Us
Director: Jordan Peele
Starring: Lupita Nyong'o, Winston Duke, Shahadi Wright Joseqph, Evan Alex and Elisabeth Moss
Rating: 4/5
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UAE's role in anti-extremism recognised
General John Allen, President of the Brookings Institution research group, commended the role the UAE has played in the fight against terrorism and violent extremism.
He told a Globsec debate of the UAE’s "hugely outsized" role in the fight against Isis.
"It’s trite these days to say that any country punches above its weight, but in every possible way the Emirates did, both militarily, and very importantly, the UAE was extraordinarily helpful on getting to the issue of violent extremism," he said.
He also noted the impact that Hedayah, among others in the UAE, has played in addressing violent extremism.
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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More from Neighbourhood Watch:
MATCH INFO
What: 2006 World Cup quarter-final
When: July 1
Where: Gelsenkirchen Stadium, Gelsenkirchen, Germany
Result:
England 0 Portugal 0
(Portugal win 3-1 on penalties)
Test series fixtures
(All matches start at 2pm UAE)
1st Test Lord's, London from Thursday to Monday
2nd Test Nottingham from July 14-18
3rd Test The Oval, London from July 27-31
4th Test Manchester from August 4-8
Hydrogen: Market potential
Hydrogen has an estimated $11 trillion market potential, according to Bank of America Securities and is expected to generate $2.5tn in direct revenues and $11tn of indirect infrastructure by 2050 as its production increases six-fold.
"We believe we are reaching the point of harnessing the element that comprises 90 per cent of the universe, effectively and economically,” the bank said in a recent report.
Falling costs of renewable energy and electrolysers used in green hydrogen production is one of the main catalysts for the increasingly bullish sentiment over the element.
The cost of electrolysers used in green hydrogen production has halved over the last five years and will fall to 60 to 90 per cent by the end of the decade, acceding to Haim Israel, equity strategist at Merrill Lynch. A global focus on decarbonisation and sustainability is also a big driver in its development.
Recent winners
2002 Giselle Khoury (Colombia)
2004 Nathalie Nasralla (France)
2005 Catherine Abboud (Oceania)
2007 Grace Bijjani (Mexico)
2008 Carina El-Keddissi (Brazil)
2009 Sara Mansour (Brazil)
2010 Daniella Rahme (Australia)
2011 Maria Farah (Canada)
2012 Cynthia Moukarzel (Kuwait)
2013 Layla Yarak (Australia)
2014 Lia Saad (UAE)
2015 Cynthia Farah (Australia)
2016 Yosmely Massaad (Venezuela)
2017 Dima Safi (Ivory Coast)
2018 Rachel Younan (Australia)
Poacher
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ULTRA PROCESSED FOODS
- Carbonated drinks, sweet or savoury packaged snacks, confectionery, mass-produced packaged breads and buns
- margarines and spreads; cookies, biscuits, pastries, cakes, and cake mixes, breakfast cereals, cereal and energy bars;
- energy drinks, milk drinks, fruit yoghurts and fruit drinks, cocoa drinks, meat and chicken extracts and instant sauces
- infant formulas and follow-on milks, health and slimming products such as powdered or fortified meal and dish substitutes,
- many ready-to-heat products including pre-prepared pies and pasta and pizza dishes, poultry and fish nuggets and sticks, sausages, burgers, hot dogs, and other reconstituted meat products, powdered and packaged instant soups, noodles and desserts.
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Day 5, Dubai Test: At a glance
Moment of the day Given the problems Sri Lanka have had in recent times, it was apt the winning catch was taken by Dinesh Chandimal. He is one of seven different captains Sri Lanka have had in just the past two years. He leads in understated fashion, but by example. His century in the first innings of this series set the shock win in motion.
Stat of the day This was the ninth Test Pakistan have lost in their past 11 matches, a run that started when they lost the final match of their three-Test series against West Indies in Sharjah last year. They have not drawn a match in almost two years and 19 matches, since they were held by England at the Zayed Cricket Stadium in Abu Dhabi in 2015.
The verdict Mickey Arthur basically acknowledged he had erred by basing Pakistan’s gameplan around three seam bowlers and asking for pitches with plenty of grass in Abu Dhabi and Sharjah. Why would Pakistan want to change the method that has treated them so well on these grounds in the past 10 years? It is unlikely Misbah-ul-Haq would have made the same mistake.
if you go
The flights
Etihad and Emirates fly direct to Kolkata from Dh1,504 and Dh1,450 return including taxes, respectively. The flight takes four hours 30 minutes outbound and 5 hours 30 minute returning.
The trains
Numerous trains link Kolkata and Murshidabad but the daily early morning Hazarduari Express (3’ 52”) is the fastest and most convenient; this service also stops in Plassey. The return train departs Murshidabad late afternoon. Though just about feasible as a day trip, staying overnight is recommended.
The hotels
Mursidabad’s hotels are less than modest but Berhampore, 11km south, offers more accommodation and facilities (and the Hazarduari Express also pauses here). Try Hotel The Fame, with an array of rooms from doubles at Rs1,596/Dh90 to a ‘grand presidential suite’ at Rs7,854/Dh443.
The National photo project
Chris Whiteoak, a photographer at The National, spent months taking some of Jacqui Allan's props around the UAE, positioning them perfectly in front of some of the country's most recognisable landmarks. He placed a pirate on Kite Beach, in front of the Burj Al Arab, the Cheshire Cat from Alice in Wonderland at the Burj Khalifa, and brought one of Allan's snails (Freddie, which represents her grandfather) to the Dubai Frame. In Abu Dhabi, a dinosaur went to Al Ain's Jebel Hafeet. And a flamingo was taken all the way to the Hatta Mountains. This special project suitably brings to life the quirky nature of Allan's prop shop (and Allan herself!).
More from Rashmee Roshan Lall
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Company profile
Company name: Suraasa
Started: 2018
Founders: Rishabh Khanna, Ankit Khanna and Sahil Makker
Based: India, UAE and the UK
Industry: EdTech
Initial investment: More than $200,000 in seed funding
Titanium Escrow profile
Started: December 2016
Founder: Ibrahim Kamalmaz
Based: UAE
Sector: Finance / legal
Size: 3 employees, pre-revenue
Stage: Early stage
Investors: Founder's friends and Family
