Nofe Isah, a 25-year-old based in Nigeria, has been investing in cryptocurrency since January. Last week, she lost all her $5,000 in savings as cryptocurrency Luna went into free fall.
Ms Isah, a recently unemployed administrative officer, said she would never invest in cryptocurrency again.
“I can’t believe I fell for crypto,” she said. “I’m just trying not to get myself depressed. Crypto has taken my money, fine. It shouldn’t take my head.”
The cryptocurrency market, known for its wild price swings, slumped last week as investors yanked money from riskier assets on worries over soaring inflation and rising interest rates.
Bitcoin, the world’s largest cryptocurrency, fell as low as $25,401 last week, its lowest since December 2020. It hit a record high of $69,000 in November.
Small tokens were also hit, with Ether, the second-largest token, dropping more than 15 per cent to its lowest since June.
Luna, a digital coin widely promoted on social media and backed by institutional cryptocurrency investors, lost nearly all of its value.
Small traders such as Ms Isah have flocked to cryptocurrencies in the hope of quick returns, despite warnings from regulators that the emerging assets can be high risk.
Platforms such as Robinhood, which has 23 million customers across a variety of assets, helped to spur retail investing, including in cryptocurrency.
Around a quarter of Robinhood’s transaction-based revenue came from cryptocurrencies in the first quarter of this year, the company said in its latest earnings statement.
Overall user numbers at cryptocurrency platforms have ballooned. Binance, the world’s biggest cryptocurrency exchange, had some 118 million clients last month, up from 43.4 million in the first quarter of last year.
But after last week’s turmoil, online forums were awash with tales of woe as retail investors spoke about their losses.
“I’m 49, with a big mortgage and three kids. My retirement party is on ice for the foreseeable future,” a user with the handle Boring-Fun-3646 said on Reddit.
Another user with the handle AdventurousAdagio830 posted on Reddit: “It doesn’t seem real that I lost $180,000.”
Emblematic of cryptocurrency risks was the collapse last week of TerraUSD, a stablecoin designed to keep a constant value by a complex algorithm that involved Luna.
When the coins came under heavy selling pressure, the system broke down. TerraUSD — designed to keep a value of $1 — traded around 9 cents on Tuesday, while Luna plunged to near-zero, based on CoinGecko data.
Tejan Shrivastava, a 31-year old graphic designer from Mumbai, who has been investing in cryptocurrencies for the past year, had his $250 investment wiped out by Luna’s collapse.
“It was stuck in a death spiral. All the money was gone in 15 minutes,” he said.
“I don’t even know if I’ll invest in crypto in the future. I have a crypto portfolio, but I am planning to liquidate it once it reaches break-even.”
Luna’s fall wiped out most of its market value, which had been at more than $40 billion as recently as early April, CoinGecko data shows.
Retail investors’ online frustration even spilt over into the real world.
Seoul police last week said they were seeking a suspect after an unidentified individual rang the doorbell of the apartment of Do Kwon, the founder of TerraUSD, and ran away.
Police would investigate whether the suspect had invested in cryptocurrencies, a Seoul police officer said.
Throughout its 13-year life, the cryptocurrency sector has been peppered by vertiginous climbs and sudden freefalls. In November, for instance, Bitcoin slumped by a fifth in about two weeks after touching a record $69,000. Six months earlier, it had tumbled by about 40 per cent in just nine days.
Yet cryptocurrency’s latest crash, which pushed the sector’s combined value to $1.2 trillion, less than half of where it was last November, led to the crushing of Luna, which on May 1 was the eighth-largest cryptocurrency by market capitalisation.
Cryptocurrencies are subject to patchy regulation across the world, with traders of Bitcoin and the panoply of smaller tokens typically unprotected against price slumps.
But it is difficult to gauge the scale of retail investors’ pain from the cryptocurrency plunge and the repercussions on appetite given the opaque nature of the market.
In Britain, more than 4 per cent of adults — some 2.3 million people — own cryptocurrencies, data published last year by the UK financial watchdog showed.
The regulator said understanding of cryptocurrency was falling compared with a year earlier, “suggesting that some crypto users may not fully understand what they are buying”.
World's 10 richest crypto billionaires — in pictures
Still, some small investors are keeping the faith.
Eloisa Marchesoni, based near Tulum in Mexico and investing with a cryptocurrency syndicate, said she would not give up.
“I am looking to buy the dip — we are all waiting for Bitcoin to go down to $22,000, which is not something too probable but not something that’s ‘not probable at all’.”
Ms Marchesoni is also hedging her cryptocurrency bets with physical assets — “cars because you can lease them, watches, real estate”.
Bitcoin was hovering around $29,765 on Tuesday, having lost more than 20 per cent so far this month.
Regulators remain on alert. The British government said last month it will regulate stablecoins.
The US Securities and Exchange Commission is toughening its stance. Gary Gensler, SEC chair, said this week investors in cryptocurrencies needed more protections.
'Worse than a prison sentence'
Marie Byrne, a counsellor who volunteers at the UAE government's mental health crisis helpline, said the ordeal the crew had been through would take time to overcome.
“It was worse than a prison sentence, where at least someone can deal with a set amount of time incarcerated," she said.
“They were living in perpetual mystery as to how their futures would pan out, and what that would be.
“Because of coronavirus, the world is very different now to the one they left, that will also have an impact.
“It will not fully register until they are on dry land. Some have not seen their young children grow up while others will have to rebuild relationships.
“It will be a challenge mentally, and to find other work to support their families as they have been out of circulation for so long. Hopefully they will get the care they need when they get home.”
RESULT
Manchester City 1 Sheffield United 0
Man City: Jesus (9')
Will the pound fall to parity with the dollar?
The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.
Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.
New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.
“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.
The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.
The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.
Bloomberg
Business Insights
- As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses.
- SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income.
- Larger entities have specific provisions for asset and liability movements, business restructuring, and handling foreign permanent establishments.
ORDER OF PLAY ON SHOW COURTS
Centre Court - 4pm (UAE)
Gael Monfils (15) v Kyle Edmund
Karolina Pliskova (3) v Magdalena Rybarikova
Dusan Lajovic v Roger Federer (3)
Court 1 - 4pm
Adam Pavlasek v Novak Djokovic (2)
Dominic Thiem (8) v Gilles Simon
Angelique Kerber (1) v Kirsten Flipkens
Court 2 - 2.30pm
Grigor Dimitrov (13) v Marcos Baghdatis
Agnieszka Radwanska (9) v Christina McHale
Milos Raonic (6) v Mikhail Youzhny
Tsvetana Pironkova v Caroline Wozniacki (5)
What is a robo-adviser?
Robo-advisers use an online sign-up process to gauge an investor’s risk tolerance by feeding information such as their age, income, saving goals and investment history into an algorithm, which then assigns them an investment portfolio, ranging from more conservative to higher risk ones.
These portfolios are made up of exchange traded funds (ETFs) with exposure to indices such as US and global equities, fixed-income products like bonds, though exposure to real estate, commodity ETFs or gold is also possible.
Investing in ETFs allows robo-advisers to offer fees far lower than traditional investments, such as actively managed mutual funds bought through a bank or broker. Investors can buy ETFs directly via a brokerage, but with robo-advisers they benefit from investment portfolios matched to their risk tolerance as well as being user friendly.
Many robo-advisers charge what are called wrap fees, meaning there are no additional fees such as subscription or withdrawal fees, success fees or fees for rebalancing.
Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
$1,000 award for 1,000 days on madrasa portal
Daily cash awards of $1,000 dollars will sweeten the Madrasa e-learning project by tempting more pupils to an education portal to deepen their understanding of math and sciences.
School children are required to watch an educational video each day and answer a question related to it. They then enter into a raffle draw for the $1,000 prize.
“We are targeting everyone who wants to learn. This will be $1,000 for 1,000 days so there will be a winner every day for 1,000 days,” said Sara Al Nuaimi, project manager of the Madrasa e-learning platform that was launched on Tuesday by the Vice President and Ruler of Dubai, to reach Arab pupils from kindergarten to grade 12 with educational videos.
“The objective of the Madrasa is to become the number one reference for all Arab students in the world. The 5,000 videos we have online is just the beginning, we have big ambitions. Today in the Arab world there are 50 million students. We want to reach everyone who is willing to learn.”
Silent Hill f
Publisher: Konami
Platforms: PlayStation 5, Xbox Series X/S, PC
Rating: 4.5/5
MATCH INFO
Manchester United v Manchester City, Wednesday, 11pm (UAE)
Match is on BeIN Sports
HUNGARIAN GRAND PRIX RESULT
1. Sebastian Vettel, Ferrari 1:39:46.713
2. Kimi Raikkonen, Ferrari 00:00.908
3. Valtteri Bottas, Mercedes-GP 00:12.462
4. Lewis Hamilton, Mercedes-GP 00:12.885
5. Max Verstappen, Red Bull Racing 00:13.276
6. Fernando Alonso, McLaren 01:11.223
7. Carlos Sainz Jr, Toro Rosso 1 lap
8. Sergio Perez, Force India 1 lap
9. Esteban Ocon, Force India 1 lap
10. Stoffel Vandoorne, McLaren 1 lap
11. Daniil Kvyat, Toro Rosso 1 lap
12. Jolyon Palmer, Renault 1 lap
13. Kevin Magnussen, Haas 1 lap
14. Lance Stroll, Williams 1 lap
15. Pascal Wehrlein, Sauber 2 laps
16. Marcus Ericsson, Sauber 2 laps
17r. Nico Huelkenberg, Renault 3 laps
r. Paul Di Resta, Williams 10 laps
r. Romain Grosjean, Haas 50 laps
r. Daniel Ricciardo, Red Bull Racing 70 laps
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Drishyam 2
Directed by: Jeethu Joseph
Starring: Mohanlal, Meena, Ansiba, Murali Gopy
Rating: 4 stars
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List of alleged parties
May 12, 2020: PM and his wife Carrie attend 'work meeting' with at least 17 staff
May 20, 2020: They attend 'bring your own booze party'
Nov 27, 2020: PM gives speech at leaving party for his staff
Dec 10, 2020: Staff party held by then-education secretary Gavin Williamson
Dec 13, 2020: PM and his wife throw a party
Dec 14, 2020: London mayoral candidate Shaun Bailey holds staff event at Conservative Party headquarters
Dec 15, 2020: PM takes part in a staff quiz
Dec 18, 2020: Downing Street Christmas party
Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
Anghami
Started: December 2011
Co-founders: Elie Habib, Eddy Maroun
Based: Beirut and Dubai
Sector: Entertainment
Size: 85 employees
Stage: Series C
Investors: MEVP, du, Mobily, MBC, Samena Capital
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Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
