Bitcoin, the world's largest cryptocurrency, continued its slide on Tuesday, falling to below $30,000 for the first time since January, as Chinese authorities, worried about the environmental impact of cryptocurrency, closed down mining operations in Sichuan.
Bitcoin was down more than 11 per cent on Tuesday to $29,273 at 6.12pm UAE time. Ethereum, the second largest cryptocurrency, was down 13.8 per cent to $1,725.
"Bitcoin has violated an important support level and it is likely that we may see more panic in the market as investors will think that it may be the end of Bitcoin," said Naeem Aslam, chief market analyst at London-based AVA Trade. "The current sell off could be the opportunity for many investors to load their portfolio with Bitcoin, which is selling at a huge discount."
China's central bank has encouraged payment service provider Alipay and other large institutions to crack down on cryptocurrency trading, he added, citing reports of Bitcoin mines in Sichuan being shut down after regulators in China stopped crypto mining.
"The majority of Bitcoin mines consume coal power, which has raised concerns about the digital currency's potential environmental impact," Mr Aslam said.
The slide in prices also comes a day after China’s biggest banks said they will refuse to help customers trade Bitcoin and other cryptocurrencies after the country's central bank said executives were told to step up enforcement of a government ban, according to the AP.
In May, public criticism of the digital currency’s energy needs by Tesla’s billionaire chief executive and founder Elon Musk and a Chinese regulatory crackdown caused the Bitcoin’s price to plummet more than 53 per cent to $30,000 after reaching an all-time high of $64,899 in April.
Electricity is a primary input of Bitcoin and other cryptocurrencies. The coins are mined by computers that process complex algorithms in halls that span the area of several football pitches. In April, researchers at Cambridge University estimated that the electricity consumption of the Bitcoin network is almost 120 terawatt-hours per year, more than the energy consumption of the UAE at 119.45 terawatt-hours, and on course to overtake Pakistan.
Despite Bitcoin's volatility, investor confidence in cryptocurrencies is growing, Mr Aslam said.
"This is backed up by institutional investors, who are working to diversify their product portfolios in order to provide their clients with access to Bitcoin," he said.
Mr Aslam cited findings of several surveys that show a growing number of hedge fund managers are willing to allocate about 10 per cent of their portfolio to cryptocurrencies.
"Technically, there are two make-or-break levels on the Bitcoin chart: the $30K support on the downside and the $43K resistance on the upside, which is the 200-day moving average. Which will break first is hard to tell, but the state of technical indicators hints that the $30K support could fall first," said Ipek Ozkardeskaya, a senior analyst at Swissquote.
"There is a death cross formation on the daily chart, warning that the technicals are in favour of a further Bitcoin sell-off. However ... the fact that the 200-day moving average is still on a rising path could prevent Bitcoin from a bloodbath in the short run, and that things would get more serious once the 200-day moving average turns its nose to the downside."
Central banks have been reluctant to endorse cryptocurrencies and critics have said they are speculative, lack any value and are a medium for money laundering and criminal activity.
"In its current version, in spite of the hype, Bitcoin failed to satisfy the notion of 'currency without government' (it proved to not even be a currency at all), can be neither a short or long term store of value (its expected value is no higher than 0), cannot operate as a reliable inflation hedge, and, worst of all, does not constitute, not even remotely, safe haven for one's investments, shield against government tyranny, or tail protection vehicle for catastrophic episodes," Nassim Taleb, New York University professor and author of the Black Swan wrote on his blog.
Mr Taleb said there is a fundamental flaw and contradiction at the base of most cryptocurrencies and how miners extract value.
"The originators, miners, and maintainers of the system currently make their money from the inflation of their currencies rather than just from the volume of underlying transactions in them," he said. "Hence, the total failure of Bitcoin in becoming a currency has been masked by the inflation of the currency value, generating (paper) profits for large enough a number of people to enter the discourse well ahead of its utility."
Mr Taleb went on to explain that unlike the 1995-2000 dot-com rush that was characterised by highly speculative investments in Internet-related companies, the Bitcoin bubble has no foundation.
The companies "were at least promising some type of future revenue stream", he said.
While you're here
Tomorrow 2021
SPEC%20SHEET
If you go...
Etihad flies daily from Abu Dhabi to Zurich, with fares starting from Dh2,807 return. Frequent high speed trains between Zurich and Vienna make stops at St. Anton.
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What is Reform?
Reform is a right-wing, populist party led by Nigel Farage, a former MEP who won a seat in the House of Commons last year at his eighth attempt and a prominent figure in the campaign for the UK to leave the European Union.
It was founded in 2018 and originally called the Brexit Party.
Many of its members previously belonged to UKIP or the mainstream Conservatives.
After Brexit took place, the party focused on the reformation of British democracy.
Former Tory deputy chairman Lee Anderson became its first MP after defecting in March 2024.
The party gained support from Elon Musk, and had hoped the tech billionaire would make a £100m donation. However, Mr Musk changed his mind and called for Mr Farage to step down as leader in a row involving the US tycoon's support for far-right figurehead Tommy Robinson who is in prison for contempt of court.
TECH%20SPECS%3A%20APPLE%20IPHONE%2014%20PLUS
Transgender report
• Remittance charges will be tackled by blockchain
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The low down
Producers: Uniglobe Entertainment & Vision Films
Director: Namrata Singh Gujral
Cast: Rajkummar Rao, Nargis Fakhri, Bo Derek, Candy Clark
Rating: 2/5
• Remittance charges will be tackled by blockchain
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Kareem Shaheen on Canada
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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
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Plastic tipping point
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Barings Bank
Barings, one of Britain’s oldest investment banks, was
founded in 1762 and operated for 233 years before it went bust after a trading
scandal.
Barings Bank collapsed in February 1995 following colossal
losses caused by rogue trader Nick Lesson.
Leeson gambled more than $1 billion in speculative trades,
wiping out the venerable merchant bank’s cash reserves.
'Gehraiyaan'
Stars:Deepika Padukone, Siddhant Chaturvedi, Ananya Panday, Dhairya Karwa
Rating: 4/5
KEY%20DATES%20IN%20AMAZON'S%20HISTORY
The bio
Job: Coder, website designer and chief executive, Trinet solutions
School: Year 8 pupil at Elite English School in Abu Hail, Deira
Role Models: Mark Zuckerberg and Elon Musk
Dream City: San Francisco
Hometown: Dubai
City of birth: Thiruvilla, Kerala
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Violence%20
Tomorrow 2021
More from Neighbourhood Watch:
Tips for taking the metro
- set out well ahead of time
- make sure you have at least Dh15 on you Nol card, as there could be big queues for top-up machines
- enter the right cabin. The train may be too busy to move between carriages once you're on
- don't carry too much luggage and tuck it under a seat to make room for fellow passengers
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While you're here
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
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IF YOU GO
The flights
FlyDubai flies direct from Dubai to Skopje in five hours from Dh1,314 return including taxes. Hourly buses from Skopje to Ohrid take three hours.
The tours
English-speaking guided tours of Ohrid town and the surrounding area are organised by Cultura 365; these cost €90 (Dh386) for a one-day trip including driver and guide and €100 a day (Dh429) for two people.
The hotels
Villa St Sofija in the old town of Ohrid, twin room from $54 (Dh198) a night.
St Naum Monastery, on the lake 30km south of Ohrid town, has updated its pilgrims' quarters into a modern 3-star hotel, with rooms overlooking the monastery courtyard and lake. Double room from $60 (Dh 220) a night.
Infiniti QX80 specs
Engine: twin-turbocharged 3.5-liter V6
Power: 450hp
Torque: 700Nm
Price: From Dh450,000, Autograph model from Dh510,000
Available: Now
Tomorrow 2021
Analysis
Members of Syria's Alawite minority community face threat in their heartland after one of the deadliest days in country’s recent history. Read more
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AI traffic lights to ease congestion at seven points to Sheikh Zayed bin Sultan Street
The seven points are:
Shakhbout bin Sultan Street
Dhafeer Street
Hadbat Al Ghubainah Street (outbound)
Salama bint Butti Street
Al Dhafra Street
Rabdan Street
Umm Yifina Street exit (inbound)
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World Mental Health Day
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Simon Waldman: Cautious Israel keeping a low profile
Rashmee Roshan Lall: Sound of silence in South Asia
Richard Olson: Why Afghanistan will be very wary
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Khaled Yacoub Oweis: Hezbollah bids to control Lebanon’s financial system
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Justin Thomas: Challenge the notion that 'men are from Mars, women are from Venus'
Company%C2%A0profile
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Mina Al Oraibi: Air strike casts a long shadow over the decade ahead
Jack Moore: Why the assassination is such a monumental gamble
Damien McElroy: A CEO tasked with spreading Iran's influence
Hussein Ibish: Trump's order on solid constitutional ground
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Farage on Muslim Brotherhood
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
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
