Cryptocurrency markets recently experienced a spectacular crash, with total market capitalisation falling from about $3 trillion to just below $1tn today.
This is not an unprecedented situation in cryptocurrencies — we witnessed a similar event in 2018.
Back then, Bitcoin’s value collapsed by more than 80 per cent following a breathtaking rally that saw its price rise from $900 to around $20,000, making some of the early adopters millionaires and billionaires in the space of only a year.
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World's 10 richest crypto billionaires — in pictures
During that time, the cryptocurrency market was establishing itself as a serious player in the financial ecosystem, so much so that Bitcoin attracted the attention of regulators, particularly in the US and China. This led to its famous crash of 2018 amid fears that central bank scrutiny would stifle the burgeoning cryptocurrency industry.
As we all know, however, Bitcoin was far from dead.
The birth of decentralised finance
Over the 18 months that preceded the most recent cryptocurrency crash, we saw the cryptocurrency industry coming of age.
An incredible amount of development took place that eventually led to the establishment of the decentralised financial network and the 2020 boom.
Decentralised finance, commonly known as DeFi, was born in 2019 when a handful of organisations sought to challenge the status quo in financial services.
Their goal was to democratise finance, facilitating peer-to-peer lending, banking and investment services without the need for a centralised intermediary.
Transparency and financial inclusion were the slogans on the banners of this revolution.
The popularity of this idea quickly propelled the DeFi sector to dizzying heights. In December 2021, the total value locked in DeFi protocols — an indicator of the size of this market segment — stood at $247.96 billion.
Today, this value has dropped to $56.27bn, while the price of Bitcoin has plummeted more than 70 per cent from its all-time high of $68,000.
The coming boom
As history has shown, though, it is only a matter of time until the next period of development arrives. This time, it will be greater than anything we have witnessed so far.
This year's cryptocurrency crash has taught the industry important lessons. The most important of these is that bringing traditional, centralised financial practices on to the blockchain simply doesn’t work.
Lessons from the great financial crisis
Former billion-dollar giants such as Celsius and Voyager Digital marketed themselves as crypto banks, empowering people to take their financial futures into their own hands.
However, while Celsius was calling for its customers to “unbank” themselves, in reality they were simply swapping one type of centralised control for another.
As unsecured lenders, customers who chose to earn interest on their cryptocurrencies through Celsius never became custodians of their own assets. They relinquished control in exchange for an attractive annual return, in the erroneous belief that their funds would be safe.
In a similar way to the 2008 great financial crisis, this system worked until it did not — and then it failed spectacularly.
The demise of these crypto banks was little different from the fall of Lehman Brothers back in 2008. Excessive leverage and risk-taking was followed by a liquidity crisis and a domino effect across the market.
Power to the people
This is precisely why the crypto industry can’t follow the route of traditional finance. A different, fair financial system cannot be built on the principles that govern a broken paradigm.
DeFi is all about giving the power back to the people. This means no longer relinquishing ownership of their assets. This means transparency. This means financial inclusion.
Although DeFi has certainly suffered in volume from the contagion in the crypto market, the protocols worked well in the slump.
The next 18 months will see a true renaissance of this sector. DeFi will go back to its roots and build a decentralised network that can provide a true alternative to the current elitist, exclusive and inaccessible global financial system.
True decentralisation
In a decentralised economy, it won’t matter where people live, what their credit score is, or how rampant inflation is in their country. Financial freedom will be available to all through a secure blockchain at the click of a button.
Traditionally, cryptocurrency downturns are a chance for the industry to take a breather and prepare for the next boom cycle.
The preparation that is taking place behind the scenes in the DeFi space today dwarfs the development that has happened in cryptocurrencies in previous years.
What we will see at the end of it will be a true democratisation of finance, the way it was supposed to be from the beginning.
Stefan Rust is the founder of Laguna Labs, a blockchain development house, and former chief executive of bitcoin.com
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
RESULT
Manchester United 1 Brighton and Hove Albion 0
Man United: Dunk (66' og)
Man of the Match: Shane Duffy (Brighton)
Results:
5pm: Baynunah Conditions (UAE bred) Dh80,000 1,400m.
Winner: Al Tiryaq, Dane O’Neill (jockey), Abdullah Al Hammadi (trainer).
5.30pm: Al Zahra Handicap (rated 0-45) Dh 80,000 1,400m:
Winner: Fahadd, Richard Mullen, Ahmed Al Mehairbi.
6pm: Al Ras Al Akhdar Maiden Dh80,000 1,600m.
Winner: Jaahiz, Jesus Rosales, Eric Lemartinel.
6.30pm: Al Reem Island Handicap Dh90,000 1,600m.
Winner: AF Al Jahed, Antonio Fresu, Ernst Oertel.
7pm: Al Khubairah Handicap (TB) 100,000 2,200m.
Winner: Empoli, Pat Dobbs, Doug Watson.
7.30pm: Wathba Stallions Cup Handicap Dh80,000 2,200m.
Winner: Shivan OA, Patrick Cosgrave, Helal Al Alawi.
The specs
Engine: 3.0-litre six-cylinder MHEV
Power: 360bhp
Torque: 500Nm
Transmission: eight-speed automatic
Price: from Dh282,870
On sale: now
Various Artists
Habibi Funk: An Eclectic Selection Of Music From The Arab World (Habibi Funk)
Wydad 2 Urawa 3
Wydad Nahiri 21’, Hajhouj 90'
Urawa Antonio 18’, 60’, Kashiwagi 26’
Honeymoonish
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Elie%20El%20Samaan%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3ENour%20Al%20Ghandour%2C%20Mahmoud%20Boushahri%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203%2F5%3C%2Fp%3E%0A
MATCH INFO
Uefa Champions League semi-final, first leg
Bayern Munich v Real Madrid
When: April 25, 10.45pm kick-off (UAE)
Where: Allianz Arena, Munich
Live: BeIN Sports HD
Second leg: May 1, Santiago Bernabeu, Madrid
South Africa squad
: Faf du Plessis (captain), Hashim Amla, Temba Bavuma, Quinton de Kock (wkt), Theunis de Bruyn, AB de Villiers, Dean Elgar, Heinrich Klaasen (wkt), Keshav Maharaj, Aiden Markram, Morne Morkel, Chris Morris, Wiaan Mulder, Lungi Ngidi, Duanne Olivier, Vernon Philander and Kagiso Rabada.
England's lowest Test innings
- 45 v Australia in Sydney, January 28, 1887
- 46 v West Indies in Port of Spain, March 25, 1994
- 51 v West Indies in Kingston, February 4, 2009
- 52 v Australia at The Oval, August 14, 1948
- 53 v Australia at Lord's, July 16, 1888
- 58 v New Zealand in Auckland, March 22, 2018
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 story in numbers
18
This is how many recognised sects Lebanon is home to, along with about four million citizens
450,000
More than this many Palestinian refugees are registered with UNRWA in Lebanon, with about 45 per cent of them living in the country’s 12 refugee camps
1.5 million
There are just under 1 million Syrian refugees registered with the UN, although the government puts the figure upwards of 1.5m
73
The percentage of stateless people in Lebanon, who are not of Palestinian origin, born to a Lebanese mother, according to a 2012-2013 study by human rights organisation Frontiers Ruwad Association
18,000
The number of marriages recorded between Lebanese women and foreigners between the years 1995 and 2008, according to a 2009 study backed by the UN Development Programme
77,400
The number of people believed to be affected by the current nationality law, according to the 2009 UN study
4,926
This is how many Lebanese-Palestinian households there were in Lebanon in 2016, according to a census by the Lebanese-Palestinian dialogue committee
MATCH INFO
Europa League semi-final, second leg
Atletico Madrid (1) v Arsenal (1)
Where: Wanda Metropolitano
When: Thursday, May 3
Live: On BeIN Sports HD
MATCH INFO
Europa League final
Who: Marseille v Atletico Madrid
Where: Parc OL, Lyon, France
When: Wednesday, 10.45pm kick off (UAE)
TV: BeIN Sports
From Conquest to Deportation
Jeronim Perovic, Hurst
Try out the test yourself
Q1 Suppose you had $100 in a savings account and the interest rate was 2 per cent per year. After five years, how much do you think you would have in the account if you left the money to grow?
a) More than $102
b) Exactly $102
c) Less than $102
d) Do not know
e) Refuse to answer
Q2 Imagine that the interest rate on your savings account was 1 per cent per year and inflation was 2 per cent per year. After one year, how much would you be able to buy with the money in this account?
a) More than today
b) Exactly the same as today
c) Less than today
d) Do not know
e) Refuse to answer
Q4 Do you think that the following statement is true or false? “Buying a single company stock usually provides a safer return than a stock mutual fund.”
a) True
b) False
d) Do not know
e) Refuse to answer
The “Big Three” financial literacy questions were created by Professors Annamaria Lusardi of the George Washington School of Business and Olivia Mitchell, of the Wharton School of the University of Pennsylvania.
Answers: Q1 More than $102 (compound interest). Q2 Less than today (inflation). Q3 False (diversification).
Tightening the screw on rogue recruiters
The UAE overhauled the procedure to recruit housemaids and domestic workers with a law in 2017 to protect low-income labour from being exploited.
Only recruitment companies authorised by the government are permitted as part of Tadbeer, a network of labour ministry-regulated centres.
A contract must be drawn up for domestic workers, the wages and job offer clearly stating the nature of work.
The contract stating the wages, work entailed and accommodation must be sent to the employee in their home country before they depart for the UAE.
The contract will be signed by the employer and employee when the domestic worker arrives in the UAE.
Only recruitment agencies registered with the ministry can undertake recruitment and employment applications for domestic workers.
Penalties for illegal recruitment in the UAE include fines of up to Dh100,000 and imprisonment
But agents not authorised by the government sidestep the law by illegally getting women into the country on visit visas.
Ticket prices
General admission Dh295 (under-three free)
Buy a four-person Family & Friends ticket and pay for only three tickets, so the fourth family member is free
Buy tickets at: wbworldabudhabi.com/en/tickets
Company%20profile
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