“Meltdown”, “turmoil”, “financial disaster”. It has been quite a week for the world of cryptocurrencies as markets plummeted and the value of investors' holdings in digital assets such as Bitcoin and Terra rapidly diminished.
Bitcoin was set for a record losing streak while Terra, a stablecoin, collapsed to close to zero on Thursday.
But what happened? Why did the crash occur and is it now over?
What happened to Terra?
Stablecoins, which are pegged to the value of traditional assets such as the US dollar, are usually popular in times of turmoil. They are key elements of the cryptocurrency market and traders park funds in these assets as they move in and out of other digital tokens.
However, Terra slipped below its 1:1 peg to the dollar this week, as global stock markets fell amid rising interest rates and high inflation.
Terra's value is derived by algorithmic processes and it is linked to another paired token called Luna.
Luna fell by more than 94 per cent on Wednesday to almost zero, compared with a high of $119.51, and the blockchain behind both coins twice stopped processing new transactions.
The blockchain’s validators unveiled a software update designed to help avoid attacks on the network.
The largest stablecoin, Tether, also diverged from its 1:1 peg, although marginally.
“The Terra incident is causing an industry-based panic as [it] is the world’s third-biggest stablecoin that couldn’t hold its promise to maintain a stable value in terms of US dollars,” Ipek Ozkardeskaya, a senior analyst with Swissquote Bank, said on Thursday.
“The Terra-USD peg is mostly based on the belief that one could always exchange Luna to guarantee a $1 peg for Terra. But, apparently, that belief is not working any more, and trust is a foremost ingredient in cryptocurrencies' success. So, the level of stress in other cryptocurrencies is mounting.”
Fitch Ratings said that in the case of Terra, the backing entity’s cryptocurrency reserve was not sufficiently large to serve as a source of stability when its algorithmic peg mechanism came under speculative pressure.
“We expect recent developments to lead to increased calls for regulation of stablecoins,” the rating agency said in a note.
How is Bitcoin faring?
The world's largest cryptocurrency has been struggling, too. Bitcoin was at a 16-month low of about $25,400 on Thursday. While it rose close to $30,000 on Friday, it is still way below the $40,000 level it was at a week ago and about 60 per cent below record peaks reached in November.
“Bitcoin has rebounded from $25,424 but this won’t last if risk appetite does not stabilise soon,” said Edward Moya, senior market analyst at Oanda.
“Bitcoin is still vulnerable to one last plunge that could coincide with a stock market sell-off, before many crypto investors feel the bottom is in place.
How is Bitcoin's plunge affecting El Salvador?
It became the world’s first government to make Bitcoin legal tender in September. The idea was to draw more people into the financial system and make it cheaper to send remittances.
However, after the government spent about $105 million buying more than 2,300 Bitcoins, the value is now at about $66m.
The losses are equal to the cash-strapped nation’s next interest payment to bondholders, Bloomberg reported.
Will cryptocurrencies rebound?
Sentiment was generally improving on Friday morning.
“The dust seems to be settling in cryptocurrencies,” Ms Ozkardeskaya said.
“Terra and Luna are now worth almost nothing and probably won’t regain investors’ confidence, and Tether had a mini crash to 0.95, but it recovered fast before things got serious,” she said.
“Bitcoin returned past the $30,000 [level], which is a sign that confidence in the broader sector may not have been damaged as much as we first feared.”
However, analysts also believe that further declines are in store for cryptocurrencies.
“I don't think the worst is over,” said Scottie Siu, investment director of Axion Global Asset Management, a Hong Kong-based company that runs a cryptocurrency index fund.
“I think there is more downside in the coming days. What we need to see is the open interest collapse a lot more, so the speculators are really out of it and that is when I think the market will stabilise.”
How is Hollywood actor Matt Damon involved?
The actor is being criticised across social media for an advertisement he starred in for Crypto.com in October last year.
The advert ran under the tagline “Fortune Favours the Brave”. Mr Damon's financial advice is not looking too sharp right now.
Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
UAE currency: the story behind the money in your pockets
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What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
Cryopreservation: A timeline
- Keyhole surgery under general anaesthetic
- Ovarian tissue surgically removed
- Tissue processed in a high-tech facility
- Tissue re-implanted at a time of the patient’s choosing
- Full hormone production regained within 4-6 months
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
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Info
What: 11th edition of the Mubadala World Tennis Championship
When: December 27-29, 2018
Confirmed: men: Novak Djokovic, Rafael Nadal, Kevin Anderson, Dominic Thiem, Hyeon Chung, Karen Khachanov; women: Venus Williams
Tickets: www.ticketmaster.ae, Virgin megastores or call 800 86 823
UAE currency: the story behind the money in your pockets
The National in Davos
We are bringing you the inside story from the World Economic Forum's Annual Meeting in Davos, a gathering of hundreds of world leaders, top executives and billionaires.
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
Killing of Qassem Suleimani
Killing of Qassem Suleimani
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The Greatest Royal Rumble card as it stands
The Greatest Royal Rumble card as it stands
50-man Royal Rumble - names entered so far include Braun Strowman, Daniel Bryan, Kurt Angle, Big Show, Kane, Chris Jericho, The New Day and Elias
Universal Championship Brock Lesnar (champion) v Roman Reigns in a steel cage match
WWE World Heavyweight ChampionshipAJ Styles (champion) v Shinsuke Nakamura
Intercontinental Championship Seth Rollins (champion) v The Miz v Finn Balor v Samoa Joe
United States Championship Jeff Hardy (champion) v Jinder Mahal
SmackDown Tag Team Championship The Bludgeon Brothers (champions) v The Usos
Raw Tag Team Championship (currently vacant) Cesaro and Sheamus v Matt Hardy and Bray Wyatt
Casket match The Undertaker v Chris Jericho
Singles match John Cena v Triple H
Cruiserweight Championship Cedric Alexander v tba
Tour de France 2017: Stage 5
Vittel - La Planche de Belles Filles, 160.5km
It is a shorter stage, but one that will lead to a brutal uphill finish. This is the third visit in six editions since it was introduced to the race in 2012. Reigning champion Chris Froome won that race.
Jetour T1 specs
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EPL's youngest
- Ethan Nwaneri (Arsenal)
15 years, 181 days old
- Max Dowman (Arsenal)
15 years, 235 days old
- Jeremy Monga (Leicester)
15 years, 271 days old
- Harvey Elliott (Fulham)
16 years, 30 days old
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16 years, 68 days old
Specs
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What is cyberbullying?
Cyberbullying or online bullying could take many forms such as sending unkind or rude messages to someone, socially isolating people from groups, sharing embarrassing pictures of them, or spreading rumors about them.
Cyberbullying can take place on various platforms such as messages, on social media, on group chats, or games.
Parents should watch out for behavioural changes in their children.
When children are being bullied they they may be feel embarrassed and isolated, so parents should watch out for signs of signs of depression and anxiety
Various Artists
Habibi Funk: An Eclectic Selection Of Music From The Arab World (Habibi Funk)
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
THE SPECS
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Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
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The specs: 2018 Mercedes-AMG C63 S Cabriolet
Price, base: Dh429,090
Engine 4.0-litre twin-turbo V8
Transmission Seven-speed automatic
Power 510hp @ 5,500rpm
Torque 700Nm @ 1,750rpm
Fuel economy, combined 9.2L / 100km
The specs: 2018 Nissan Altima
Price, base / as tested: Dh78,000 / Dh97,650
Engine: 2.5-litre in-line four-cylinder
Power: 182hp @ 6,000rpm
Torque: 244Nm @ 4,000rpm
Transmission: Continuously variable tranmission
Fuel consumption, combined: 7.6L / 100km
Killing of Qassem Suleimani
