Welcome back,
Bitcoin fell to a six-week low today below $54,000, in line with turmoil in global markets over the emergence of a new Covid-19 variant.
Here are the top stories that caught our eye
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Black Friday crypto crash
Bitcoin fell to a six-week low today – down as much as 9% to $53,534 – in line with wider markets after a new Covid-19 variant emerged in South Africa. Investors dumped many riskier assets in favour of safe-havens such as the US dollar and bonds.
“Bitcoin has been acting more like a risk asset recently, and today’s rush to safety means the digital token got steamrolled,” says Bloomberg.
Another reason speculators give for holding bitcoin is rising inflation. But the new variant raises questions about the future of central bank monetary policy, with chances of tightening receding, and could derail the global recovery – and potentially even reverse inflation. As Neil Wilson, chief market analyst at Markets.com, says: “Bitcoin is not providing much of a hedge”.
India plans cryptocurrency ban
India is set to go ahead with a contentious plan to ban cryptocurrencies in a long-awaited parliamentary bill. The ban is part of the Cryptocurrency and Regulation of Official Digital Currency bill, and would cover all private cryptocurrencies with only minimal exceptions in place for blockchain, the technology underpinning cryptocurrencies.
India was expected to take a less hardline stance on cryptocurrencies and even possibly regulate them as assets. But the bill could mean cryptocurrency activity in India falling sharply.
Laith Khalaf, head of investment analysis at AJ Bell, says that while “India’s plan to ban cryptocurrencies has not wrought the same damage on the bitcoin price as China’s summer crackdown...it nonetheless marks yet another stumbling block in crypto’s advancement as an economic force in the real world.”
Binance in talk with sovereign wealth funds about taking a stake in the company
Binance, the world’s largest cryptocurrency exchange by volume, has been in talks with numerous sovereign wealth funds about possibly taking a stake in the exchange, says the Financial Times.
Changpeng Zhao, Binance’s chief executive, said that the move, if realised, would help “perception and relationships” with various governments. “But it may also tie us to specific countries . . . which we want to be slightly careful with,” Binance’s CEO added.
Binance has not been immune to growing scrutiny in recent months, coming under pressure from regulators in Canada, Singapore, the UK, among others.
Zhao said Binance was in preliminary discussions to raise capital from many sovereign wealth funds. This is on top of “capital raising for its US affiliate ahead of a public listing,” the FT said.
Zhao did not disclose which sovereign wealth funds the exchange has already held discussions with.
Here’s what happened in the cryptocurrency market in the last seven days:
- Bitcoin fell 4% to $54,160.
- Ether rose 2% to $4,035.20.
- Dogecoin fell 7% to $0.20.
- Cardano fell 14% to $1.53.
- Solana is down 0.5% to $203.
What you need to watch out for
Sweden calls for EU-wide ban on “proof-of-work” cryptocurrency mining
The directors of the country's Financial Supervisory Authority Environmental Protection Agency have called for a ban on the most energy-intensive form of cryptocurrency mining – so called “”proof of work” employed by bitcoin and many other tokens.
In an open letter to the E says that, with China banning crypto-mining, that miners will move in to take advantage of Sweden’s renewable energy, which the country needs "for the climate transition of our essential services".
It's fair to say those calling for a ban are no fans of cryptocurrencies in general. “The social benefit of crypto-assets is questionable”, the letter says, as “crypto-assets are commonly used for criminal purposes such as money laundering, terrorist financing and ransomware payments”.
-
The top stocks in the FTSE 100After a year of strong returns for the UK’s flagship index, which FTSE 100 stocks have posted the best performance in 2024?
-
A junior ISA could turn your child’s pocket money into thousands of poundsPersuading your child to put their pocket money in a junior ISA might be difficult, but the pennies could quickly grow into pounds – and teach them a valuable lesson about money
-
Halifax: House price slump continues as prices slide for the sixth consecutive monthUK house prices fell again in September as buyers returned, but the slowdown was not as fast as anticipated, latest Halifax data shows. Where are house prices falling the most?
-
Rents hit a record high - but is the opportunity for buy-to-let investors still strong?UK rent prices have hit a record high with the average hitting over £1,200 a month says Rightmove. Are there still opportunities in buy-to-let?
-
Pension savers turn to gold investmentsInvestors are racing to buy gold to protect their pensions from a stock market correction and high inflation, experts say
-
Where to find the best returns from student accommodationStudent accommodation can be a lucrative investment if you know where to look.
-
Best investing appsLooking for an easy-to-use app to help you start investing, keep track of your portfolio or make trades on the go? We round up the best investing apps
-
The world’s best bargain stocksSearching for bargain stocks with Alec Cutler of the Orbis Global Balanced Fund, who tells Andrew Van Sickle which sectors are being overlooked.
-
Revealed: the cheapest cities to own a home in BritainNew research reveals the cheapest cities to own a home, taking account of mortgage payments, utility bills and council tax
-
UK recession: How to protect your portfolioAs the UK recession is confirmed, we look at ways to protect your wealth.
