Bitcoin drops after report Binance under US probe, Tesla move

Cryptocurrency fans have counted Tesla boss Elon Musk as among their champions, but this week he rocked their world by criticizing carbon emissions from bitcoin, causing bitcoin's price to drop. (AFP)
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Updated 14 May 2021

Bitcoin drops after report Binance under US probe, Tesla move

  • Bitcoin dropped to $45,700, the lowest since March 1, then steadied at $49,312 in Asia morning trade on Friday
  • The world’s largest cryptocurrency fell 17 percent on Wednesday following Elon Musk’s remarks

NEW YORK/LONDON/TOKYO: Bitcoin slid to a 2-1/2-month low on Thursday after a regulatory probe into crypto exchange Binance added to pressure from Tesla Inc. chief Elon Musk’s reversing his stance on accepting the digital currency.
Bloomberg reported on Thursday that as part of the Binance inquiry, the US Justice Department and the Internal Revenue Service have sought information from individuals with insight into its business.
Bitcoin dropped to $45,700, the lowest since March 1, then steadied at $49,312 in Asia morning trade on Friday.
The world’s largest cryptocurrency fell 17 percent on Wednesday following Musk’s remarks that Tesla would stop accepting the digital token as payment for its electric cars for environmental reasons.
“Environmental matters are an incredibly sensitive subject right now, and Tesla’s move might serve as a wake-up call to businesses and consumers using bitcoin, who hadn’t hitherto considered its carbon footprint,” Laith Khalaf, an analyst at AJ Bell, said.
Bitcoin remains about 70 percent higher for the year and is more than 1,000 percent higher than its 2020 low of $3,850.
Binance did not immediately respond to a request for comment. A Binance spokeswoman told Bloomberg that the company doesn’t comment on specific inquiries but takes its legal obligations seriously and engages with regulators in a collaborative fashion.
Ethereum, the second-largest cryptocurrency, dropped to a session low of $3,543.62 and last changed hands at $3,656, down about 4 percent. On Wednesday, ethereum hit a record high of $4,380.64.
Tesla’s announcement on Feb. 8 that it had bought $1.5 billion of bitcoin and would accept it as payment for its electric vehicles has been one factor behind the digital currency’s surge this year.
Musk has faced pressure over bitcoin’s environmental impact. The cryptocurrency relies on computers competing to solve elaborate math problems, which use huge amounts of electricity.
“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk tweeted.
Musk’s comments roiled markets even though he said Tesla would not sell any bitcoin and would resume accepting it as soon as “mining” for it transitioned to more sustainable energy.
In a second tweet on Thursday, Musk denounced the “insane” amount of energy used to produce bitcoin, which pushed bitcoin lower.
Jeffrey Wang, Vancouver-based head of Americas at Amber Group, a cryptocurrency service provider, said broader selling of risk assets in traditional markets was another factor behind Wednesday’s bitcoin plunge.
“I don’t think everything is selling off just because of this news. This was kind of the straw that broke the camel’s back in terms of adding to the risk sell-off,” Wang said.
Bitcoin has struggled since hitting a record $64,895.22 in mid-April, dropping to the cusp of $47,000 just 11 days later before hovering around $58,000 since the start of May.

Environmental concerns
At current rates, bitcoin mining devours about the same amount of energy annually as the Netherlands did in 2019, data from the University of Cambridge and the International Energy Agency showed.
Tesla shares were down 2.4 percent, while the biggest US cryptocurrency exchange, Coinbase, tumbled nearly 9 percent. Smaller cryptocurrencies were less affected by the news.
“The reason given in the tweet is fossil fuel use for the mining of BTC, but most cryptocurrencies have already found more efficient ways to do that and therefore outperformed.”
Cryptocurrency dogecoin lost more than a third of its price on Sunday after Musk, whose tweets had stoked demand for the token earlier this year, called it a “hustle” on the “Saturday Night Live” comedy show.
By Tuesday, however, he was asking his followers on Twitter if they wanted Tesla to accept dogecoin and it jumped on Friday in Asia after Musk tweeted about it again and said he was working on improvements to its transaction systems.
Dogecoin rose 20 percent to 52 cents on Friday according to Binance and last traded at $0.4825.


EU threatens Lebanese politicians with sanctions over crisis

Updated 19 June 2021

EU threatens Lebanese politicians with sanctions over crisis

  • Lebanon’s economic crisis began in late 2019 and has intensified in recent months
  • Borrell said the EU stands ready to assist Lebanon and its people

BEIRUT: The European Union’s foreign policy chief Saturday berated Lebanese politicians for delays in forming a new Cabinet, warning the union could impose sanctions on those behind the political stalemate in the crisis-hit country.
Josep Borrell made his comments at the presidential palace near the capital Beirut after meeting with President Michel Aoun. It was the first meeting in a two-day visit to Lebanon.
Borrell said Lebanese politicians should quickly form a new government, implement reforms and reach a deal with the International Monetary Fund to start getting the tiny country out of its paralyzing economic and financial crisis.
Lebanon’s economic crisis — triggered by decades of corruption and mismanagement — began in late 2019 and has intensified in recent months. The World Bank said earlier this month the crisis is likely to rank as one of the worst the world has seen in more than 150 years, adding that the economy contracted 20.3 percent in 2020 and is expected to shrink 9.5 percent this year.
A power struggle between premier-designate Saad Hariri on one side, and Aoun and his son-in-law Gebran Bassil on the other, has worsened the crisis despite warnings from world leaders and economic experts of the dire economic conditions tiny Lebanon is facing.
Hariri was named to form a new government in October and has not succeeded so far. The government of Prime Minister Hassan Diab resigned days after a massive blast in Beirut on Aug. 4, that killed 211 people and injured more than 6,000.
“We cannot understand that nine months after the resignation of a prime minister, there is still no government in Lebanon,” Borrell said. “Only an urgent agreement with the International Monetary Fund will rescue the country from a financial collapse.”
“There is no time to waste. You are at the edge of the financial collapse,” he said in English.
Borrell said the EU stands ready to assist Lebanon and its people but warned that if there is further obstruction to solutions “we will have to consider other courses of actions as some member states have proposed.”
“The council of the European Union has been including other options, including targeted sanctions,” Borrell said. He added: “Of course we prefer not to go down this road and we hope that we will not have to but it is in the hands of the Lebanese leadership.”
Borrel rejected claims by some Lebanese politicians that refugees are the cause of the crisis, saying it is “homemade.”
“It is not fair (to say) that the crisis in Lebanon comes from the presence of refugees,” he said referring to a nearly 1 million Syrian refugees who fled the war in their country to Lebanon.

 

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Sterling set for worst week since Sept. 2020

Updated 19 June 2021

Sterling set for worst week since Sept. 2020

LONDON: Sterling extended its fall against the US dollar on Friday, dropping below $1.39, hurt by the US Federal Reserve’s hawkish surprise and an unexpected fall in Britain’s retail sales.
The pound dropped against a strengthening dollar on Thursday after the Fed surprised markets by signaling it would raise interest rates and end emergency bond-buying sooner than expected.
On Friday, it fell further against both the dollar and the euro. It was down 0.3 percent on the day at $1.389, having touched as low as $1.38555 — its weakest since May 4. It was on track for its worst week since September 2020.
Versus the euro, it was down around 0.3 percent at 85.78 pence per euro, on track for a small weekly fall.
“GBPUSD remains bogged down below the 1.39 handle by a confluence of broad USD strength and a slight deterioration in near-term data,” said Simon Harvey, senior FX market analyst at Monex Europe.
“The limited impact of the data on sterling is largely because retail sales volumes remain above pre-pandemic levels and a shift in consumption patterns toward services after the May 17th reopening was always likely.”
For cable, market participants are weighing up the Bank of England and the Fed’s relative pace of possible monetary policy tightening. The BoE next meets on June 24.
BofA strategists said in a note to clients that it changed its view on the central bank’s tightening trajectory.
and now expects a 15 basis point rate hike in May 2022, compared to previously expecting no hikes in 2022.
“Brussels’ patience with London’s having its cake and eating it is wearing thin. Indeed, there is a risk of protocols being triggered and tariffs being threatened more seriously,” wrote ING strategists in a note to clients.
“The next few weeks could thus be a vulnerable period for Cable, where a break of 1.3890 opens up 1.3800/3810 — the last stop before an extension to the March/April lows of 1.3675.”


Bahrain’s Batelco could be first stock to be dual listed on Tadawul

Updated 18 June 2021

Bahrain’s Batelco could be first stock to be dual listed on Tadawul

  • Samba has been hired as an adviser on the deal

RIYADH: Bahrain Telecommunications Co. (Batelco) is planning to become the first company to have a dual listing of shares on Saudi Arabia’s stock exchange (Tadawul), Bloomberg reported citing people familiar with the matter.

The investment arm of Samba Financial Group has been hired as an adviser on the deal, the people said, asking not to be identified for information privacy.

No decision has been made and the company may decide against the dual listing, they said.

A spokesperson at Batelco declined to comment, while Samba Capital didn’t respond to messages seeking comment, Bloomberg said.

Tadawul has been trying to encourage Middle Eastern firms to dual list for years, without success. Aluminium Bahrain had considered a dual listing in 2014, but it never occurred.


Saudi Arabia’s National Debt Management Center wins global awards for second year

Updated 18 June 2021

Saudi Arabia’s National Debt Management Center wins global awards for second year

  • Saudi office won Middle East and emerging market awards

RIYADH: Saudi Arabia won the Best Sovereign Public Debt Office in the Middle East and the Most Impressive Emerging Market Issuer Award at the 2021 Global Capital Bond Awards, for the year 2021, for the second year in a row, SPA reported.

The Global Capital Bond Awards honors the achievements of governments and companies of all sizes in the field of sovereign and regional finance, banking services, hedge funds, and many other areas within the financial services sector.

It also highlights the most prominent innovations and achievements within the financial services sector, globally.

Saudi Arabia sold SR8.27 billion ($2.20 billion) of riyal-denominated sukuk in June, up from $941 million in May, bunt down from $3.1 billion April, National Debt Management Center data show.

“Driving growth of the Kingdom’s capital markets will be an increase in bond issuance to help fund the SR12 trillion Vision 2030," said Khalid Al-Bihlal, head of S&P Global Ratings KSA. "We project a gradual rise in the use of Saudi Arabian riyal-denominated bond issuance as the local capital markets develop. The US dollar is currently the currency of choice for such bonds."


Saudi MoF electronically linked to SAMA

Updated 18 June 2021

Saudi MoF electronically linked to SAMA

RIYADH: The Saudi Central Bank (SAMA) announced the completion of an electronic link with the Ministry of Finance to process requests relating to the bank accounts of government agencies held at Saudi commercial banks through the online portal Hesaab.

SAMA is seeking to improve and accelerate the procedures related to requests of government agencies’ bank accounts received from the Ministry of Finance, by implementing technical solutions with minimal human intervention, it said in a statement on Thursday.

The Hesaab portal is one of the National Transformation Program 2020 initiatives that improves the level of financial services, in line with Vision 2030.