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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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Mozambique Scandal: Credit Suisse & U.S. Conclude Deal

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Credit Suisse Group AG is nearing an agreement with the U.S. government that would resolve a criminal probe regarding its role in a U$2 billion Mozambique bond scandal, according to people familiar with the matter.

The discussions with the U.S. Justice Department involve a deferred prosecution agreement that would include a fine, according to the people, who asked not to be identified because the talks are confidential. An agreement is expected to be announced Tuesday.

Any deal with U.S. prosecutors would be the latest action in a multi-year, international legal saga arising out of the 2013-14 deals that were supposed to fund a new coastal patrol force and tuna fishing fleet in Mozambique, one of the world’s poorest countries.

In a 2018 indictment, the U.S. Justice Department alleged the contracts were a front for government officials and bankers to enrich themselves.

Three former Credit Suisse bankers have pleaded guilty to U.S. charges stemming from the scheme.

Credit Suisse declined to comment on any agreement, as did the U.S. Justice Department.

A deal could help put to bed one scandal, even as the bank has been punished this year by investors for its stumbles with Archegos Capital Management and Greensill Capital, which have spurred broad management shakeups.

Mozambique has filed suit against Credit Suisse and shipbuilder Privinvest, one of several cases in U.K. courts that involve the bond deal.

Unlawful Conduct’

In defending its London lawsuit, Credit Suisse has insisted that it was deceived by rogue bankers and couldn’t be held responsible for their “unlawful conduct” when it arranged the loans in early 2013.

The Swiss bank has said it carried out its usual due diligence before the transactions and was aware of the risk of bribery and corruption.

Andrew Pearse, who led the global financing group in the bank’s London office, testified at a federal trial in Brooklyn, New York that he’d pocketed at least U$45 million in illicit payments for his role in the arrangement of the loans.

The Credit Suisse loans were for three separate maritime projects including a tuna fishing fleet, the building of a shipyard and surveillance operation to protect Mozambique’s coastline and protect against pirates, according to Pearse.

Mozambican government officials, corporate executives and investment bankers stole about U$200 million, prosecutors said.

Both Pearse and his successor at the bank, Surjan Singh, who also pleaded guilty, testified at the 2019 trial of Jean Boustani, a Privinvest Group executive accused by the U.S. of being behind the plan to get Mozambique to borrow billions of dollars and overpay for dubious maritime projects.

A third banker, Datelina Subeva, Pearse’s subordinate, also pleaded guilty but didn’t testify.

All three bankers await sentencing. After a six-week trial in late 2019, a federal jury cleared Boustani of all charges.

Bloomberg

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DRC Opposition Protests Against Phone Tax

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Martin Fayulu, DRCs leader of opposition coalition LAMUKA has called upon all citizens to take to the streets and demand for the abolition of a controversial mobile phone tax.

In June 2020, the DRC government set up – through the ICT, Post and Telecoms Ministry – a CEIR system (Central Equipment Identification Register), with the aim to fight fake devices and the theft of mobile devices.

However, Telephony mobile users claim the Mobile Device Registry (RAM), a controversial new tax is robbing them of their units and making them poorer.

In terms of RAM, mobile operators are cutting a big chunk of units monthly from their customers’ mobile devices, which many users believe is too high and unnecessary.

“We are calling for the immediate withdrawal of RAM. Because it’s theft, a scam. That no one is demobilized. Let’s march and denounce it because it is outright  theft. Once withdrawn, all money collected must be returned, ”said Martin Fayulu.

During a meeting this Saturday, October 16, 2021 in Kinshasa, Martin Fayulu called for the outright abolition of this fee.

During the rally, the leader of Lamuka pinpointed other topical issues, including the issue of appointing the leaders of the Independent National Electoral Commission (CENI).

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Tanzania’s Economy Records 4.3% Expansion in 2nd Quarter

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Tanzania’s economic outlook seems very impressive as the country registered a 4.3% expansion between April and June according to the country’s National Bureau of Statistics (NBS).

Compared to the country’s economic performance in the same period last year, there has been a 0.3% upward expansion.

Briefing the media on Friday, Daniel Masolwa NBS Director of Economics Statistics, said, “Real GDP increased to Shs 33.4trillion from Shs 32trillion in the corresponding period in 2020, an equivalent to a 4.3% growth,” he said.

During the second Quarter of 2020, Tanzania’s economy registered the lowest growth rate of 4.0% since 2017 mainly due to the devastating effects of Covid-19 pandemic following the introduction of lockdowns and many countries to mitigate spread of this pandemic.

However, Masolwa tried to cool down any skepticism saying, the annual economic growth in 2021 is projected at a 5.0% rate. In terms of economic activities, he  said, during the period under review, information and communication attained the highest growth of 12.3%, followed by electricity generation at 12.1%.

Meanwhile, other services include arts and entertainment and households as employers (10.8%), accommodation and food services (10.1%), water (8.4%), and mining and quarrying (7.3%).

According to Masolwa, the expansion of economy by 4.3% during the second Quarter of 2021 was spearheaded by key drivers of growth which include Agriculture (13%), transport and storage (8.4%), trade and maintenance (8.1%), manufacturing (7.6%) and construction (7.1%).

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