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Crypto Moves – Sudden crypto drop leads to three-week low for Bitcoin

Several crypto assets fell sharply on Friday, with Bitcoin reaching a three-week low as a result of sudden selling (Shutterstock)
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Updated 21 August 2022
Dana Alomar
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Crypto Moves – Sudden crypto drop leads to three-week low for Bitcoin

Updated 21 August 2022
Dana Alomar

DUBAI: Bitcoin, the leading cryptocurrency internationally, traded lower on Sunday, falling by 0.23 percent to $21,197.99 as of 8 a.m. Riyadh time.

Ethereum, the second most traded cryptocurrency, was priced at $1,583.38 falling by 3.90 percent, according to data from Coindesk.

Bitcoin drops to a three-week low after a sudden crypto drop

Several crypto assets fell sharply on Friday, with Bitcoin reaching a three-week low as a result of sudden selling, with analysts divided over the reasons behind the decrease, Reuters reported. 

As GlobalBlock analyst Marcus Sotiriou noted in a research note, the heavy selling was not triggered by a single catalyst.

He said: “But the S&P 500 rejecting and failing to continue its recovery contributed to Bitcoin’s drop.” Early Friday afternoon, the S&P 500 was down around 1 percent.

The move, according to Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, resulted from a large sale transaction.

“It’s not showing the pattern of a flash crash, as the assets didn’t immediately rebound sharply but sank even lower in the hours that followed,” she said.

Cardano seemed to be the first cryptocurrency to move, followed by bitcoin and ether, and then other altcoins like Dogecoin.

Despite Federal Reserve rate hikes and ultrahigh inflation, cryptocurrency prices have plummeted this year.

The inability of Bitcoin to recover its losses, according to Craig Erlam, senior market analyst at Oanda, “suggests that there is substance behind the move.” It was the worst day for it since June’s collapse after Friday’s move.

“Speculating in cryptocurrencies is extremely high risk and is not suitable for the vast majority of people,” Streeter said. 

Japan’s SBI withdraws from Russia’s crypto mining industry

The largest online brokerage in Japan, SBI Holdings, is shutting down its crypto mining business in the Russian Federation, according to Bitcoin.com. 

The financial firm is planning to sell its equipment and withdraw due to mounting uncertainty over the future of such investments caused by the ongoing conflict in Ukraine.

According to Bitcoin.com, low-cost power and suitable climate made Russia an attractive destination for cryptocurrency miners when China cracked down in May 2021.

Bitcoin mining, among other Russian industries, has been affected by sanctions imposed over Moscow’s attack on Ukraine this year.

A representative of SBI, the largest online broker in Japan, told Bloomberg that the Russian-Ukrainian conflict has created uncertainty around the mining business in the energy-rich region, while the crypto market’s downturn has made minting digital currencies less profitable.

Hideyuki Katsuchi, the company’s chief financial officer, announced that it plans to sell its equipment in Russia and withdraw from the country.

In the second quarter, SBI registered a $72 million pre-tax loss from its crypto business due to negative developments that led to a loss of over $15.8 million, a first in a decade for the group. SBI entered the digital asset space earlier than other Japanese financial firms.

 

With inputs from Reuters 

Topics: CRYPTO bitcoin

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Global trade isn’t deglobalizing — it’s reshuffling, Harvard economist says

Updated 16 min 52 sec ago
Basmah Albasrawi 
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Global trade isn’t deglobalizing — it’s reshuffling, Harvard economist says

Updated 16 min 52 sec ago
Basmah Albasrawi 

ALULA: Global trade is not retreating into deglobalization despite geopolitical shocks, but is instead undergoing a structural reshuffling led by US-China tensions, according to Harvard University economist Pol Antras. 

Presenting research at the AlUla Emerging Market Economies Conference, Antras said there is no evidence that countries are systematically turning inward. Instead, trade flows are being redirected across markets, creating winners and losers depending on export structure and exposure to Chinese competition. 

This comes as debate intensifies over whether supply-chain disruptions, industrial policy and rising trade barriers signal the end of globalization after decades of expansion. 

Speaking to Arab News on the sidelines of the event, Antras said: “I think the right way to view it is more a reorganization, where things are moving from some countries to others rather than a general trend where countries are becoming more inward looking, in a sense of producers selling more of their stuff domestically than internationally, or consumers buying more domestic products than foreign products.”  

He said a change of that scale has not yet happened, which is important to recognize when navigating the reshuffling — a shift his research shows is driven by Chinese producers redirecting sales away from the US toward other economies. 

He added that countries are affected differently, but highlighted that the Kingdom’s position is relatively positive, stating: “In the case of Saudi Arabia, for instance, its export structure, what it exports, is very different than what China exports, so in that sense it’s better positioned so suffer less negative consequences of recent events.” 

He went on to say that economies likely to be more negatively impacted than the Kingdom would be those with more producers in sectors exposed to Chinese competition. He added that while many countries may feel inclined to follow the United States’ footsteps by implementing their own tariffs, he would advise against such a move.  

Instead, he pointed to supporting producers facing the shock as a better way to protect and prepare economies, describing it as a key step toward building resilience — a view Professor Antras underscored as fundamental. 

Elaborating on the Kingdom’s position amid rising tensions and structural reorganization, he said Saudi Arabia holds a relative advantage in its economic framework. 

“Saudi Arabia should not be too worried about facing increased competitive pressures in selling its exports to other markets, by its nature. On the other hand, there is a benefit of the current situation, which is when Chinese producers find it hard to sell in US market, they naturally pivot to other markets.” 

He said that pivot could benefit importing economies, including Saudi Arabia, by lowering Chinese export prices. The shift could increase the Kingdom’s import volumes from China while easing cost pressures for domestic producers. 

Topics: AlUla IMF Saudi Arabia

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