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Bitcoin Value Collapsing

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The Bitcoin phenomenon seems tumbling, experts have warned.

For example the crypto currency fell by as much as 15% Sunday with rival coins like Ether and XRP also plunging.

The retreat came after Bitcoin hit a record high of more than U$64,000 Wednesday as the stock-market debut of the U.S.’s largest exchange for the tokens, Coinbase Global Inc., stoked enthusiasm for all things crypto.

While prices steadied on Monday with Bitcoin holding just below $57,000, that’s still down about 12% from last week’s intraday peak.

So what’s sparked the slide?

As is often the case — especially with assets as opaque as crypto currencies where it’s often unclear who is selling or buying — there isn’t one answer. Analysts point to a grab bag of reasons.

Regulation fears

As digital assets make further inroads with both retail and institutional investors, regulators across the world are taking a closer interest.On Friday, the Turkish central bank said it would ban their use as a form of payment from April 30 and would prohibit companies that handle payments and electronic fund transfers from processing transactions involving crypto platforms.

There was also online speculation over the weekend that the U.S. Treasury is poised to crack down on money laundering carried out through digital assets. The Treasury declined to comment.

Other sources of regulatory pressure include central banks’ plans to create digital currencies such as China’s for the yuan, and the ban of crypto currency mining in Inner Mongolia, long an industry favorite because of its cheap power.

“We will see more regulation coming,” Eva Ados, chief investment strategist at asset manager ERShares, said on Bloomberg TV, warning investors to be “very careful.” “We think there is going to be even more volatility going forward.”

Overexcitement

Any big rally offers potential for the market to get ahead of itself.

That’s the view of Galaxy Digital founder and long-time crypto bull Michael Novogratz, who wrote on Twitter he sees the retreat as a healthy correction.

Other things could be adding to the mix. Industry news site CoinDesk reported Saturday that power outages in parts of China had knocked out a significant amount of Bitcoin mining capacity, which reduced the overall processing power of the crypto currency’s network.

There’s also the timing.

“Bitcoin goes crazy on weekends because it’s one of the few markets open to trade in,” Kyle Rodda, a Melbourne-based market analyst at IG said. “And it’s lost some buying support.”

How significant are the drops?

Given the frequent warnings from mainstream financial figures of a speculative mania in crypto currencies, any substantial drop reawakens memories of the 2017 crash. Back then, Bitcoin fell from more than $19,000 to under $4,000 by the end of 2018.

While the current retreat is notable, it’s not on that scale. Bitcoin is still 93% higher than it was in January. Volatility is routine for the asset class: the 15% intraday drop on Sunday was only the biggest since February.

Ether, which fell as much as 18% before closing 9.4% lower on Sunday, is up more than 200% this year.

What’s the price outlook?

The trouble with any sort of price predictions for crypto currencies is that there aren’t a lot of fundamental metrics to form the basis of forecasts.

Much comes down to best guesses on whether institutional investors will buy in and whether Bitcoin whales will sell.

Less than 2% of accounts control 95% of the available supply, according to researcher Flipside Crypto.

That means one large holder can have an outsized impact on the still illiquid market.

One key difference to the prolonged crash in 2017 is that a wide range of institutional investors now have some stake in the market. Brevan Howard Asset Management last week became the latest money manager said to be investing in digital assets.

In a further sign of growing interest among the wealthy, both Morgan Stanley and Goldman Sachs Group Inc. are now planning to offer clients access to crypto investments.

In January, JPMorgan Chase & Co. analysts suggested Bitcoin has the potential to reach $146,000 in the long term, a target they recently pared back to around $130,000.

“Passions run deep on social as to the likely near-term path for crypto,” Pepperstone’s Chris Weston wrote in a note to clients. “But dips are clearly supported.”

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Business

Most Expensive Home in America To Be Auctioned

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The One mansion of the largest private homes ever built, with a colossal 105,00sq ft of living space will go to the highest bidder tonight during a public auction.

Once valued at $500 million, The One mansion in Bel-Air is being sold for $295 million and will be on the open market until it is auctioned off by Concierge Auctions, an online auction marketplace, from February 28 to March 3.

The home will be sold without reserve, meaning it will sell to the highest bidder. Even if it sells close to the price it’s listed at, it will surely break records.

Currently, billionaire and hedge fund tycoon Ken Griffin’s $238 million New York penthouse in 2019 holds the record as the most expensive U.S. home ever sold.

Developed by Nile Niami, the massive estate took more than 10 years to build and created massive debt for Niami. His development company, Crestlloyd, filed for bankruptcy last year, forcing the home to careen towards auction as part of the bankruptcy proceedings.

However, the home still has about 12 more months of work. The buyer will have to put down nearly $340,000 as a deposit.

The Los Angeles home is one of the largest ever built, and is twice the size of the White House. It spans 105,000 square feet and the property sprawls over 3.8 acres.

Outdoor features include a moat of water on three sides of the home, five pools, a 10,000-square-foot deck and a 400-foot outdoor running track.

The home is more like a personal, private resort than a single-family home. There are a whopping 21 bedrooms, 42 full bathrooms and seven half bathrooms.

Despite its grandiose nature, there is a pared-down, neutral color palette throughout and calming water features.

Within the home, there are custom-curated artworks from artists Mike Fields, Stephen Wilson and glass artist Simoe Cenedese, to name a few. Soaring, 26-foot ceilings make the home feel even larger than it is (if that’s possible), and rooms are oversized and expansive.

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Business

Rwanda-Uganda Full Trading Resumes

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Full trading between Rwanda and Uganda is scheduled to resume on Monday January 31st following Kigali announcement that it had opened locks on its borders shut in March 2019.

“Rwanda has taken note that there is a process to solve issues raised by Rwanda, as well as commitments made by the government of Uganda to address remaining obstacles,” Kigali said in the statement.

Since the border closure Rwanda and Uganda recorded a significant reduction in trade flows and was further worsened by the covid-19 pandemic that struck a year after Rwanda had slammed its doors to the northern neighbour.

Before the border was closed in 2019, Uganda export revenues fetched from trading with Rwanda were valued over U$600million. During 2020 Uganda Exports to Rwanda was US$2.31 Million, according to the United Nations COMTRADE database on international trade.

President Paul Kagame said in his new year address that Rwanda prospered in the economic front.

“We are beginning the year 2020 after a successful 2019.Our country remained safe as a result of our efforts”.

The Africa Development Bank in its 2019 outlook on Rwanda, projected robust growth prospects even as the standoff with Uganda heightened.

For example, Rwanda and Tanzania signed the standard gauge railway (SGR) deal dubbed, sub-Saharan Africa’s first 570 Km bullet line with Tanzania worth US$2.5 billion.

Also Rwanda by December 2019 signed a U$1.3 billion deal on Bugesera Airport with Qatar.

One of the biggest blows that Uganda suffered in its standoff with Rwanda was the emergence of Tanzania as Rwanda’s new major trading partner.

Uganda exports to Rwanda include; mineral fuels, oils, distillation products ,plastics ,textiles ,cereals , electronics, vehicles, machinery, fish, edible fruits, soaps, cement, lubricants, waxes, candles and an assortment of manufactured articles.

With the border slated for opening on Monday, the gesture is expected to boost  the movement of goods, transport, persons and services and under strict observation of restrictions against covid-19 pandemic.

How Museveni Lost to Kagame in Race For Regional Dominance

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Business

Akabanga Tycoon Diversifies to Petroleum

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Sina Gerard famed for producing the hot oiled pepper ‘akabanga’ has diversified into petroleum products, Taarifa Business desk reports.

Under a new company registered as Sina Gerard Petroleum Ltd, the tycoon’s decision indicates that he is reading from a good business book on diversification strategy.

Diversification is a business development strategy in which a company develops new products and services, or enters new markets, beyond its existing ones.  Companies diversify to achieve greater profitability.

Diversification will never be an easy game, and managers must study their cards carefully. It takes smart players to know when it’s best to raise their bets and when it’s best to fold.

Havard Business review research suggests that if managers consider the following six questions, they can push their thinking still further to reduce the gamble of diversification. Answering the questions will not lead to an easy go-no-go decision, but the exercise can help managers assess the likelihood of success.

The issues the questions raise, and the discussion they provoke, are meant to be coupled with the detailed financial analysis typical of the diversification decision-making process.

Together, these tools can turn a complex and often pressured decision into a more structured and well-reasoned one.

Thus, when managers consider whether or not to diversify, they should ask themselves the following questions:

What can our company do better than any of its competitors in its current market?

Before diversifying, managers must think not about what their company does but about what it does better than its competitors.

What strategic assets do we need in order to succeed in the new market?

To diversify, a company must have all the necessary strategic assets, not just some of them.

Can we catch up to or leapfrog competitors at their own game?

Will diversification break up strategic assets that need to be kept together?

Managers need to ask whether their strategic assets are transportable to the industry they have targeted.

Will we be simply a player in the new market or will we emerge a winner?

What can our company learn by diversifying, and are we sufficiently organized to learn it?

Like good chess players, forward-thinking managers will think two or three moves ahead.

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