Bitcoin, the world's leading cryptocurrency, has had a remarkable recent rally, breaking through the $35,000 price barrier in the early days of 2021. Even the coin's brief midweek stumble should not mask the enormity of its climb in the past few weeks.
Its value stood at barely $11,000 in October, meaning if you'd hopped on board back then, your stake would look very good today. This autumn cryptocurrency rally has proved a boon for investors in other digital currencies too, such as Ethereum, which have rapidly appreciated in value in 2021.
But there is something troubling that is knotted deep within this narrative.
Market analysts sometimes refer to Bitcoin and other cryptocurrencies as being notoriously volatile, which seems to be the kind of language an estate agent might use when trying to sell a property perched on the side of a not quite inactive volcano. JP Morgan warned this week of “headwinds” approaching for the largest cryptocurrency, as reported in Bloomberg.
The firm also called out an apparent bout of “speculative mania” as the main force that had pushed the price of Bitcoin up from below $5,000 in March 2020 to its current peaks.
As a matter of historic record, the cryptocurrency slumped to that 2020 low on the same March day the World Health Organisation declared the coronavirus crisis a pandemic, which seemed to cast the crypto as a mainstream asset that was responding in typically downbeat fashion to the black clouds that were gathering around the world.
The embrace of Bitcoin since then is partly attributed to it being seen as an alternative safe haven to gold in the face of that general uncertainty, despite its historic wild swings in price and broader concerns over significant hacks.
Even though the big idea of crypto is hugely appealing – it is a decentralised payment system that is beholden neither to central banks or governments – very few people have found a use for it as a currency to transact with or as part of their day-to-day lives. For now, and perhaps for years to come, it is a tool for speculation rather than an instrument of spending.
It is easy to make the case that the Bitcoin rally fits the profile of a classic bubble: the price is booming, more investors are moving into the market to buy a thing they don’t necessarily understand, driven by a variety of impulses including simple fear of missing out and just plain profit hunting. Greed and fear tend to inhabit the same space when a correction is on the horizon.
Few have a sensible explanation as to where the price may settle or historically could expound on why it dipped back to $5,000 or tracked beyond $35,000 on Wednesday. JP Morgan’s strategists also noted that Bitcoin’s price may soon be pushed up to between $50,000 and $100,000, but that “such price levels are unsustainable”.
For now Bitcoin beats on against the tide of sense and reason, neither a currency people truly transact with nor a financial system that empowers a decentralised commercial world.
Writing on these pages last week, columnist Mustafa Alrawi provided a robust commentary on why we shouldn't fall into the trap of saying the 2020s will herald a return to the Roaring Twenties a century ago, when a post-pandemic, post-Great War world began a decade of prosperity. Readers will not need reminding again that the decade ended badly with the Great Crash precipitating an economic depression and even the rise of fascism in Europe.
There are, of course, many reasons why people cast back to a century ago to seek answers today. Decades of mythologising the 1920s have polished its reputation as one of impossible glamour, great literature and, above all, good fun.
As James K Galbraith noted in the foreword to a 2009 edition of his father's definitive work on Wall Street, The Great Crash 1929, speculative investment made people "very happy" at the time. "Millions thought they could easily become rich, and some did," he writes, while also noting that "hope, credulity and carefree optimism" were the best parts of the boom of that decade.
There is one more reason why we should all be going cold on crypto: there is not much fun in sitting on a volatile asset. Even rollercoasters stop being enjoyable if you get to ride them all day every day. Bloomberg
I'd settle for the boring Twenties of growth and certainty this time around
The Bitcoin and crypto rally differ greatly from what happened a century ago, not just because any correction in price is unlikely to precipitate a wider economic crisis. Indeed, it is more likely to resemble the dotcom bubble of more recent decades in the sense that a period of intense speculation will be followed by a steep but relatively short correction. What it might do, however, is maroon plenty of smaller investors enticed by tales of huge profits for the taking.
There is one more reason why we should all be going cold on crypto: there is not much fun in sitting on a volatile asset. Even rollercoasters stop being enjoyable if you get to ride them all day every day. There is, in essence, a distinct lack of Galbraith’s hope and carefree optimism where crypto is concerned. Quite the opposite, in fact, just a grinding sense of "Fomo".
So, if like me, you have a hunch that cryptos may fall as quickly as they have risen, it may be time to sit this one out. The Roaring Twenties sounded like a lot of fun until the party ended. I’d settle for the boring Twenties of growth and certainty this time around.
Nick March is an assistant editor-in-chief at The National
NBA FINALS SO FAR
(Toronto lead 3-2 in best-of-seven series)
Game 1Raptors 118 Warriors 109
Game 2 Raptors 104 Warriors 109
Game 3 Warriors 109 Raptors 123
Game 4 Warriors 92 Raptors 105
Game 5 Raptors 105 Warriors 106
Game 6 Thursday, at Oakland
Game 7 Sunday, at Toronto (if needed)
White hydrogen: Naturally occurring hydrogen Chromite: Hard, metallic mineral containing iron oxide and chromium oxide Ultramafic rocks: Dark-coloured rocks rich in magnesium or iron with very low silica content Ophiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on land Olivine: A commonly occurring magnesium iron silicate mineral that derives its name for its olive-green yellow-green colour
More than 2.2 million Indian tourists arrived in UAE in 2023 More than 3.5 million Indians reside in UAE Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Classification of skills
A worker is categorised as skilled by the MOHRE based on nine levels given in the International Standard Classification of Occupations (ISCO) issued by the International Labour Organisation.
A skilled worker would be someone at a professional level (levels 1 – 5) which includes managers, professionals, technicians and associate professionals, clerical support workers, and service and sales workers.
The worker must also have an attested educational certificate higher than secondary or an equivalent certification, and earn a monthly salary of at least Dh4,000.
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.
SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities
Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails
Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies
Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments
Cast: Amitabh Bachchan, Taapsee Pannu, Amrita Singh, Tony Luke
Types of fraud
Phishing: Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.
Smishing: The SMS equivalent of phishing. Fraudsters falsify the telephone number through “text spoofing,” so that it appears to be a genuine text from the bank.
Vishing: The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.
SIM swap: Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.
Identity theft: Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.
Prize scams: Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.
* Nada El Sawy
TO A LAND UNKNOWN
Director: Mahdi Fleifel
Starring: Mahmoud Bakri, Aram Sabbah, Mohammad Alsurafa
Pay varies significantly depending on the school, its rating and the curriculum. Here's a rough guide as of January 2021:
- top end schools tend to pay Dh16,000-17,000 a month - plus a monthly housing allowance of up to Dh6,000. These tend to be British curriculum schools rated 'outstanding' or 'very good', followed by American schools
- average salary across curriculums and skill levels is about Dh10,000, recruiters say
- it is becoming more common for schools to provide accommodation, sometimes in an apartment block with other teachers, rather than hand teachers a cash housing allowance
- some strong performing schools have cut back on salaries since the pandemic began, sometimes offering Dh16,000 including the housing allowance, which reflects the slump in rental costs, and sheer demand for jobs
- maths and science teachers are most in demand and some schools will pay up to Dh3,000 more than other teachers in recognition of their technical skills
- at the other end of the market, teachers in some Indian schools, where fees are lower and competition among applicants is intense, can be paid as low as Dh3,000 per month
- in Indian schools, it has also become common for teachers to share residential accommodation, living in a block with colleagues
Our legal advisor
Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.
Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation.
Education: Sagesse University, Beirut, Lebanon, in 2005.
