Bitcoin enjoyed a bright start to the year, with the price almost doubling to more than $30,000 by the end of June.
It seemed to feed off the US technology stock recovery, as investors got their mojo back after a tough bear market in 2022.
Yet, the past month has been difficult, with Bitcoin suffering a flash crash and trading more than 10 per cent lower than it did only one month ago at about $26,000.
This kind of volatility is nothing new for the crypto market. US tech stock mania has also eased but Bitcoin has fallen at twice the speed of the Nasdaq – and has failed to benefit from the recent small recovery.
Watch: What happened to the price of Bitcoin?
It’s still 50 per cent up over the year but experts say something isn’t quite right with crypto at the moment.
Manuel Villegas, next-generation research analyst at Julius Baer, says the recent Bitcoin “retracement” follows clear signs of waning interest as “market depth has been quietly degrading while its annualised volatility hit an all-time low”.
Volatility did then pick up but not in the way investors would have wanted.
Bitcoin's price plunged almost 12 per cent in the week beginning August 14, in what Mr Villegas calls “the sharpest and steepest setback since the FTX fallout”, referring to the collapse of Sam Bankman-Fried’s crypto platform in November.
“Crypto’s market capitalisation lost close to $100 billion within minutes,” he says.
Bitcoin has been caught up in the general risk-off attitude as the US Federal Reserve looks to force further interest rate rises and Chinese bank Evergrande’s bankruptcy filing threatens contagion across the country’s property and financial sectors.
It has also been hit by problems specific to crypto following reports that Elon Musk’s SpaceX has written down $373 million worth of Bitcoin holdings in the past two years and sold an undisclosed amount of the digital coin.
Tesla has been taking a similar approach. The electric car maker's stock often moves in lockstep with crypto and it's been selling off hard, too, down more than 13 per cent in a month.
Mr Villegas says there has also some selling by crypto market makers, which were forced to adjust their hedges amid the changing volatility landscape.
Giles Coghlan, chief market analyst consulting for HYCM, notes that Bitcoin tends to track tech stocks and the recent sharp drop is a timely reminder that this is a currency rather than a commodity.
“This means it’s liable for speculation and the price is mainly moved by US monetary policy.”
As a speculative asset class, Bitcoin and other alt-coins will always be vulnerable when investors flee risk, says Mads Eberhardt, cryptocurrency analyst at Saxo Bank. “Particularly those driven by retail investors, like Bitcoin.”
Private investors are still piling into US tech but “are nearly completely absent from the crypto market, resulting in a lack of new money flowing into crypto”, he adds.
Macro uncertainty, high interest rates, a hostile US regulatory environment and last year’s collapse of both FTX and crypto Terra has added to investor hesitancy.
“With fewer retail investors and market makers, there is now less liquidity in the market. This leaves it more vulnerable to sharp price movements, as we’ve seen in recent weeks,” Mr Eberhardt says.
There is also a chance that artificial intelligence mania has given investors something new to get excited about. Whisper it, but is Bitcoin looking a little old?
Crypto sentiment could receive a major boost if the US Securities and Exchange Commission does approve crypto ETFs, as most analysts expect, Mr Eberhardt says.
“In that scenario, we expect to see the futures Ethereum ETF as early as mid-October, while the spot Bitcoin ETF can launch early next year.”
Both should bring wider benefits. “They may increase the accessibility and mainstream adoption of cryptocurrencies and allow traditional US investors to gain exposure to Bitcoin and Ethereum easily and securely through normal brokerage accounts.”
The next Bitcoin halving, expected in April 2024, may further lift sentiment by cutting issuance in half, thereby potentially increasing its scarcity and value, Mr Eberhardt adds.
Yet, he warns that this may not reverse today’s downwards trend. “The crypto market is still highly speculative and subject to various external factors such as liquidity, the regulatory and macro environments, and interest rates.”
Cryptocurrencies – in pictures
Mr Villegas remains positive towards Bitcoin, saying the price will be supported by “a broad range of positive fundamentals including increasing institutional adoption, holder accumulation, the potential approval of spot ETFs in the United States, which we believe is more likely than not, and a looming supply squeeze”.
Now could be a good time to take a position in Bitcoin, while sentiment is down and the price is falling.
Given its exposure to macro forces, it is likely to rebound when the Fed finally starts cutting rates and general animal spirits return.
With a volatile asset class like this one, the best time to buy is when sentiment is low and the price is falling. Ironically, this is exactly the time when it is most likely to slip off investors' radar.
Private investors seem to have forgotten all about crypto for now.
The danger is they suddenly remember when monetary conditions ease but by then, they will have missed the early stage of the recovery.
While traders can still have fun with Bitcoin, long-term investors should only invest as a small part of a balanced portfolio.
The opportunity cost of holding it is even greater when cash and bonds are yielding about 5 per cent a year and dividend stocks are cheap.
Bitcoin’s recent setback looks far from fatal and, one day, we could all be kicking ourselves for failing to buy it at $26,000 – just as we did more than a decade ago, when it was trading below $10.
Yes, it does look like some of the shine has come off crypto. Especially when compared to a superstar AI-fuelled stock like Nvidia, which is up 230 per cent year-to-date. How long that can last is another question altogether.
Company profile
Name: GiftBag.ae
Based: Dubai
Founded: 2011
Number of employees: 4
Sector: E-commerce
Funding: Self-funded to date
The specs: Macan Turbo
Engine: Dual synchronous electric motors
Power: 639hp
Torque: 1,130Nm
Transmission: Single-speed automatic
Touring range: 591km
Price: From Dh412,500
On sale: Deliveries start in October
UAE currency: the story behind the money in your pockets
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
The Lowdown
Us
Director: Jordan Peele
Starring: Lupita Nyong'o, Winston Duke, Shahadi Wright Joseqph, Evan Alex and Elisabeth Moss
Rating: 4/5
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
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UAE currency: the story behind the money in your pockets
Sarfira
Director: Sudha Kongara Prasad
Starring: Akshay Kumar, Radhika Madan, Paresh Rawal
Rating: 2/5
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
Nepotism is the name of the game
Salman Khan’s father, Salim Khan, is one of Bollywood’s most legendary screenwriters. Through his partnership with co-writer Javed Akhtar, Salim is credited with having paved the path for the Indian film industry’s blockbuster format in the 1970s. Something his son now rules the roost of. More importantly, the Salim-Javed duo also created the persona of the “angry young man” for Bollywood megastar Amitabh Bachchan in the 1970s, reflecting the angst of the average Indian. In choosing to be the ordinary man’s “hero” as opposed to a thespian in new Bollywood, Salman Khan remains tightly linked to his father’s oeuvre. Thanks dad.
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
Teams in the EHL
White Bears, Al Ain Theebs, Dubai Mighty Camels, Abu Dhabi Storms, Abu Dhabi Scorpions and Vipers
ETFs explained
Exhchange traded funds are bought and sold like shares, but operate as index-tracking funds, passively following their chosen indices, such as the S&P 500, FTSE 100 and the FTSE All World, plus a vast range of smaller exchanges and commodities, such as gold, silver, copper sugar, coffee and oil.
ETFs have zero upfront fees and annual charges as low as 0.07 per cent a year, which means you get to keep more of your returns, as actively managed funds can charge as much as 1.5 per cent a year.
There are thousands to choose from, with the five biggest providers BlackRock’s iShares range, Vanguard, State Street Global Advisors SPDR ETFs, Deutsche Bank AWM X-trackers and Invesco PowerShares.
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
Bio:
Favourite Quote: Prophet Mohammad's quotes There is reward for kindness to every living thing and A good man treats women with honour
Favourite Hobby: Serving poor people
Favourite Book: The Alchemist by Paulo Coelho
Favourite food: Fish and vegetables
Favourite place to visit: London
Libya's Gold
UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.
The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.
Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.
A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.
The bio:
Favourite holiday destination: I really enjoyed Sri Lanka and Vietnam but my dream destination is the Maldives.
Favourite food: My mum’s Chinese cooking.
Favourite film: Robocop, followed by The Terminator.
Hobbies: Off-roading, scuba diving, playing squash and going to the gym.
Bombshell
Director: Jay Roach
Stars: Nicole Kidman, Charlize Theron, Margot Robbie
Four out of five stars
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
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
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
KILLING OF QASSEM SULEIMANI
Profile Periscope Media
Founder: Smeetha Ghosh, one co-founder (anonymous)
Launch year: 2020
Employees: four – plans to add another 10 by July 2021
Financing stage: $250,000 bootstrap funding, approaching VC firms this year
Investors: Co-founders
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Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
Brief scores:
Day 1
Toss: South Africa, field first
Pakistan (1st innings) 177: Sarfraz 56, Masood 44; Olivier 4-48
South Africa (1st innings) 123-2: Markram 78; Masood 1-4
Results
ATP Dubai Championships on Monday (x indicates seed):
First round
Roger Federer (SUI x2) bt Philipp Kohlschreiber (GER) 6-4, 3-6, 6-1
Fernando Verdasco (ESP) bt Thomas Fabbiano (ITA) 3-6, 6-3, 6-2
Marton Fucsovics (HUN) bt Damir Dzumhur (BIH) 6-1, 7-6 (7/5)
Nikoloz Basilashvili (GEO) bt Karen Khachanov (RUS x4) 6-4, 6-1
Jan-Lennard Struff (GER) bt Milos Raonic (CAN x7) 6-4, 5-7, 6-4
Sholto Byrnes on Myanmar politics
List of officials:
Referees: Chris Broad, David Boon, Jeff Crowe, Andy Pycroft, Ranjan Madugalle and Richie Richardson.
Umpires: Aleem Dar, Kumara Dharmasena, Marais Erasmus, Chris Gaffaney, Ian Gould, Richard Illingworth, Richard Kettleborough, Nigel Llong, Bruce Oxenford, Ruchira Palliyaguruge, Sundaram Ravi, Paul Reiffel, Rod Tucker, Michael Gough, Joel Wilson and Paul Wilson.
ENGLAND TEAM
Alastair Cook, Mark Stoneman, James Vince, Joe Root (captain), Dawid Malan, Jonny Bairstow, Moeen Ali, Chris Woakes, Craig Overton, Stuart Broad, James Anderson
The specs: 2017 GMC Sierra 1500 Denali
Price, base / as tested Dh207,846 / Dh220,000
Engine 6.2L V8
Transmission Eight-speed automatic
Power 420hp @ 5,600rpm
Torque 624Nm @ 4,100rpm
Fuel economy, combined 13.5L / 100km
The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
Most sought after workplace benefits in the UAE
- Flexible work arrangements
- Pension support
- Mental well-being assistance
- Insurance coverage for optical, dental, alternative medicine, cancer screening
- Financial well-being incentives
Places to go for free coffee
- Cherish Cafe Dubai, Dubai Investment Park, are giving away free coffees all day.
- La Terrace, Four Points by Sheraton Bur Dubai, are serving their first 50 guests one coffee and four bite-sized cakes
- Wild & The Moon will be giving away a free espresso with every purchase on International Coffee Day
- Orange Wheels welcome parents are to sit, relax and enjoy goodies at ‘Café O’ along with a free coffee
COMPANY PROFILE
Founders: Sebastian Stefan, Sebastian Morar and Claudia Pacurar
Based: Dubai, UAE
Founded: 2014
Number of employees: 36
Sector: Logistics
Raised: $2.5 million
Investors: DP World, Prime Venture Partners and family offices in Saudi Arabia and the UAE
Naga
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Difference between fractional ownership and timeshare
Although similar in its appearance, the concept of a fractional title deed is unlike that of a timeshare, which usually involves multiple investors buying “time” in a property whereby the owner has the right to occupation for a specified period of time in any year, as opposed to the actual real estate, said John Peacock, Head of Indirect Tax and Conveyancing, BSA Ahmad Bin Hezeem & Associates, a law firm.
The five pillars of Islam
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
