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FTX Collapses While 75% of Bitcoin Investors Have Lost Money

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Study Finds 75% of Bitcoin Investors Have Lost Money

According to a study published Monday, roughly 75 percent of people who purchased bitcoin lost money as the cryptocurrency sector reels from the collapse of FTX, which has sapped confidence.

Economists at the Bank of International Settlements, widely regarded as the central bank of central banks, examined data on cryptocurrency investors in 95 countries between 2015 and 2022.

“Overall, back-of-the-envelope calculations indicate that roughly three-quarters of users have lost money on their bitcoin investments,” the researchers wrote in their study.

During the study period, the price of bitcoin increased from $250 in August 2015 to nearly $69,000 in November 2021. It is now worth around $16,500.

During the same time period, the number of people using smartphone apps to buy and sell cryptocurrencies increased from 119,000 to 32.5 million.

“Our analysis has revealed that, globally, bitcoin price increases have been linked to increased entry by retail investors,” the researchers wrote.

Furthermore, they discovered that “as prices rose and smaller users bought bitcoin, the largest holders (the so-called ‘whales’ or ‘humpbacks’) sold, making a profit at the expense of the smaller users.”

The researchers lacked direct data on individual investors’ gains and losses. However, they were able to extrapolate based on the price of bitcoin when new investors began using cryptocurrency trading apps and the roughly $20,000 it was worth last month.

The study also discovered that men under 35, commonly identified as the most “risk-seeking” segment, made up roughly 40% of new cryptocurrency investors.

Researchers discovered that most cryptocurrency investors viewed it as a speculative investment and that young men were more active in trading in the months following a significant increase in the bitcoin price.

According to them, the increase in investors following price increases should raise questions about whether more consumer protection is required.

Regulators Circle FTX

Following the spectacular collapse of a cryptocurrency exchange last week, regulators launched investigations. On Monday, FTX and rival exchanges sought to reassure nervous investors about their own stability, weighing on cryptocurrencies.

The collapse of FTX, once a crypto industry darling with a $32 billion valuation as of January, has prompted investigations by the US Justice Department, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, according to a source familiar with the investigations.

According to a second source with knowledge of the investigation, the SEC investigation is also targeting FTX executives, their knowledge of handling customer funds, and any potential violations of securities laws.

While the crypto industry has marketed digital assets as fundamentally different from traditional finance, the sector has proven to be vulnerable to the same risks and should be subject to the same regulations, according to Federal Reserve Vice Chair Lael Brainard on Monday.

“Crypto finance, because it is no different than traditional finance in terms of the risks that it exposes,” she told Bloomberg in an interview, echoing a long-held belief.

Separately, the Fed’s top regulatory official, Michael Barr, hinted on Monday that stricter oversight of cryptocurrencies is on the way. This includes “safeguards” to ensure crypto companies follow the same rules as other financial firms, according to Barr’s written testimony released ahead of his appearance before the Senate Banking Committee on Tuesday.

The committee’s Democratic chairman, U.S. Senator Sherrod Brown, spoke out.

“My focus has always been on the crypto industry’s fraud, scams, volatility, and outright theft,” he said. “FTX’s bankruptcy and numerous other recent instances of insecurity have demonstrated why we require a comprehensive regulatory approach that protects consumers.”

Study Finds 75% of Bitcoin Investors Have Lost Money, FTX Collapses

FTX Files for Bankruptcy

On Friday, FTX filed for bankruptcy in one of the most high-profile crypto meltdowns after frenzied traders withdrew $6 billion from the platform in 72 hours and rival exchange Binance abandoned a rescue deal.

According to a New York Times interview published on Monday, FTX’s former CEO, Sam Bankman-Fried, said his company had grown too quickly.

Bitcoin fell below $16,000 early Monday before recovering to trade at $16,401, up 0.56% at 5:56 p.m. EST (2256 GMT).

The sudden demise of FTX, once a saviour for struggling crypto firms, sent shockwaves through the crypto industry, bracing for more damage.

LedgerX LLC, an FTX subsidiary, withdrew its December request to the Commodity Futures Trading Commission to offer products that are not fully collateralized on Monday.

BlockFi, a cryptocurrency lender, said it has significant exposure to FTX after signing a deal with it to provide it with a $400 million revolving credit facility with an option to buy it for up to $240 million.

Other cryptocurrency exchanges have published details of their reserves and promised additional disclosures to calm investor nerves amid unverified rumours.

Kris Marszalek, CEO of Singapore-based crypto exchange Crypto.com, which made headlines in 2021 with a $700 million deal to rename Los Angeles’ Staples Center the Crypto.com Arena, refuted suggestions that the company was in trouble.

Study Finds 75% of Bitcoin Investors Have Lost Money, FTX Collapses

Missing Money

Marszalek stated in an “ask-me-anything” YouTube Livestream that the exchange always kept reserves to match every coin customers held on its platform and that an audited proof of Crypto.com’s reserves would be published within weeks.

The move came after investors took to Twitter over the weekend to question a $400 million ether token transfer to the Gate.io exchange on Oct. 21.

On Sunday, Marszalek tweeted that the ether had been recovered and returned to the exchange, but the Wall Street Journal reported that withdrawals at Crypto.com had increased over the weekend.

A Crypto.com spokesperson declined to comment whether the platform’s outflows continued on Monday.

Crypto.com is one of the top ten exchanges in turnover worldwide, but it is smaller than FTX and market leader Binance.

On Sunday, Kraken, another cryptocurrency exchange, announced on Twitter that it had frozen the accounts of FTX, affiliated crypto trading firm Alameda Research, and their executives.

“We have actively monitored recent developments with the FTX estate, are in contact with law enforcement, and have frozen Kraken account access to certain funds we suspect to be associated with FTX-related ‘fraud, negligence, or misconduct,” a Kraken spokesperson said.

Changpeng Zhao, the CEO of Binance, the world’s largest cryptocurrency exchange, stated that he plans to establish an industry recovery fund to assist projects that are “otherwise strong but in a liquidity crisis.”

Binance signed a nonbinding letter of intent to buy FTX’s non-US assets last week but backed out, causing the company to go bankrupt. Zhao has since issued a warning about a “cascading” cryptocurrency crisis.

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United CEO Tries To Reassure Customers Following Multiple Safety Incidents

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united

United Airlines is attempting to reassure passengers following a spate of accidents on its Boeing jets this year. In a statement to customers, the airline states that safety is “at the center of everything that we do.”

“While they are all unrelated, I want you to know that these incidents have captured our attention and sharpened our focus,” CEO Scott Kirby wrote in a Monday morning statement to customers.

united

United CEO Tries To Reassure Customers Following Multiple Safety Incidents

On Friday, a United Boeing 737-800 landed in Medford, Oregon, missing an underside fuselage panel.

Earlier this month, United experienced four mishaps, all involving Boeing jets. A United Boeing 737-900ER blew flames from its engine after takeoff from Houston, a Boeing 777 lost a wheel during takeoff from San Francisco, a Boeing 737 Max slipped off a runway in Houston, and a United Boeing 777 trailed hydraulic fluid as it left Sydney.

“Our team is reviewing the details of each case to understand what happened and using those insights to inform our safety training and procedures across all employee groups,” Kirby continued.

The airline is extending pilot training by one day, retooling training for new mechanics, and “dedicating more resources to supplier network management.”

Passengers witnessing a run of negative articles about the airline and its Boeing jets may consider booking elsewhere. In its letter, the airline is attempting to keep consumers from departing. As of the end of last year, 81% of the jets used on United’s mainline operations were manufactured by Boeing, compared to little more than half of the jets in rivals Delta and American Airlines’ mainline fleets.

Aside from the problems on  flights, the most dramatic Boeing incident this year featured an Alaska Airlines Boeing 737 Max 9, which lost a door stopper on a January 5 flight, resulting in a gaping hole in the plane’s side. And last week, a Latam Airlines flight from Sydney, Australia, to Auckland, New Zealand, fell unexpectedly, throwing some passengers to the cabin ceiling.

united

United CEO Tries To Reassure Customers Following Multiple Safety Incidents

Investigators are still investigating the causes of both events, but a preliminary report from the National Transportation Safety Board showed Boeing left the bolts required to keep the door plug in place on the 10-week-old Alaska Air jet. Boeing asserted that an incident in the cockpit rather than a problem with the aircraft’s systems may have caused the Latam accident.

The age of the aircraft in the United incidents suggests that the problem could be with their staff rather than Boeing’s well-documented quality faults. For example, Boeing purchased the jet that lost its panel on a Friday trip in 1998. So, Boeing’s quality difficulties are likely unrelated to that occurrence.

However, Boeing’s issues have impeded United’s operations. Due to the FAA’s production slowdown, it has halted hiring a new class of pilots since it will receive fewer new planes from Boeing this year, as previously promised. In January, the Alaska Air incident grounded its 737 Max 9 jets for three weeks.

united

United CEO Tries To Reassure Customers Following Multiple Safety Incidents

Furthermore, approval of a new generation of Boeing jets, the 737 Max 10, ordered by United, has been delayed due to the company’s quality and safety issues.

Kirby told investors last week that United is considering purchasing more jets from Boeing competitor Airbus. He also stated earlier this year that the Alaska Air incident was the “straw that broke the camel’s back” on United’s plans to receive deliveries of the Max 10 in the near future.’

SOURCE – (CNN)

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For The Past Year, Global Ocean Temperatures Has Set New Records On A Daily Basis.

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According to new data, the world’s oceans have now been subjected to an unprecedented year of heat, with new temperature records being smashed every day.

Global water surface temperatures began breaking daily records in mid-March last year, according to data from the National Oceanic and Atmospheric Administration (NOAA) and the University of Maine’s Climate Reanalyzer, raising fears about marine life and extreme weather worldwide.

ocean

For The Past Year, Global Ocean Temperatures Has Set New Records On A Daily Basis.

“The amplitude by which previous sea surface temperature records were beaten in 2023, and now again in 2024, is remarkable,” said Joel Hirschi, associate head of marine systems modelling at the National Oceanography Centre in the United Kingdom.

Gregory C. Johnson, a NOAA oceanographer, reported that the global average ocean temperature in 2023 was 0.25 degrees Celsius higher than the previous year. That increase “is equivalent to about two decades’ worth of warming in a single year,” he told CNN. “So it is quite large, quite significant, and a bit surprising.”

According to scientists, human-caused global warming, along with El Niño, a natural climate trend characterized by higher-than-average water temperatures, is accelerating  heat.

The biggest repercussions are for marine life and global weather. As the global waterwarms, hurricanes and other extreme weather phenomena, such as blistering heat waves and heavy rains, may gain more force.

High temperatures are already wreaking havoc on coral. In March, based on aerial observations, authorities declared that Australia’s Great Barrier Reef is witnessing its seventh mass bleaching episode.

Bleaching happens when heat-stressed corals release the algae that dwell in their tissue and serve as a food supply. If water temperatures continue too high for too long, corals will starve and die.

ocean

For The Past Year, Global Ocean Temperatures Has Set New Records On A Daily Basis.

Data from NOAA’s Coral Reef Watch program suggest that the crisis extends far beyond Australia, with the world potentially facing a fourth worldwide mass coral bleaching event in the coming months.

Ocean heat creates the conditions for more powerful hurricanes. “The warmer the ocean, the more energy to fuel storms is available,” said Karina von Schuckmann, an oceanographer at Mercator Ocean International in France.

Temperatures in the North Atlantic, an water area important for storm generation, have been unusual, startling some scientists who are still investigating the specific causes.

“At times, the records (in the North Atlantic) have been broken by margins that are virtually statistically impossible,” Brian McNoldy, a senior research associate at the University of Miami Rosenstiel School, said to CNN.

If water temperatures remain high in the second half of 2024 and a La Niña event intensifies the Atlantic hurricane season, “this would increase the risk of a very active hurricane season,” Hirschi explained.

The oceans contain around 90% of the world’s excess heat generated by burning planet-heating fossil fuels. “Measuring water warming allows us to track the status and evolution of planetary warming,” Schuckmann stated in an interview with CNN. “The ocean is the sentinel for global warming.”

El Niño is expected to weaken and fade in the coming months, perhaps reducing record water temperatures if La Niña replaces it.

ocean

For The Past Year, Global Ocean Temperatures Has Set New Records On A Daily Basis.

“In the past, surface temperature values have decreased after the passage of El Niño,” Schuckmann said. However, she cautioned that it is now hard to forecast when water temperatures will fall below record levels.

While natural climatic variability will cause water temperatures to vary, NOAA’s Johnson predicts that in the long run, they will “continue to break records as long as greenhouse gas concentrations in the atmosphere rise.”

SOURCE – (CNN)

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Reactions As Vladimir Putin Secures A Fifth Term As Russia’s President After Tightly Controlled Vote

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putin charged with war crimes

Vladimir Putin won a historic fifth term as Russia’s president on Monday, as the electoral commission announced the results of a referendum in which he faced no serious challenges and took place amid the toughest crackdown on dissent and free speech since Soviet times.

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Reactions As Vladimir Putin Secures A Fifth Term As Russia’s President After Tightly Controlled Vote

Putin claimed that the landslide majority demonstrated Russians’ “trust” and “hopes” in him, while lawmakers throughout Europe blasted the vote as a hoax and Russia’s efforts to conduct elections in seized portions of Ukraine that it claims as its territory.

Here’s what Putin, European leaders, and others say:

“Of course, we have a lot of work ahead. But I’d like to clarify one thing: no one has ever been able to intimidate or stifle our will or self-conscience since our consolidation. They have failed in the past and will fail in the future. Vladimir Putin, President of Russia.

“The elections took place in an ever-shrinking political space, which has resulted in an alarming increase of violations of civil and political rights, and precluded many candidates from running, including all those opposed to Russia’s illegal war of aggression.” – Statement from the European Union.

“These Russian elections highlight the intensity of repression under President Putin’s administration, which tries to stifle all dissent to his illegal war. Putin eliminates his political opponents, controls the media, and declares himself the winner. “This is not a democracy.” — David Cameron, UK Foreign Secretary.

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Reactions As Vladimir Putin Secures A Fifth Term As Russia’s President After Tightly Controlled Vote

“Searches at voting stations’ entrances, attempts to examine ballots before voters place them in ballot boxes, and detentions of voters who arrived at noon. According to reports, at one voting location in Moscow, police asked that the chairman of a commission (of poll workers) unlock a ballot box and hand them a ballot with anything inscribed on it. This is the first time in my life that I have witnessed such ridiculousness.” — Stanislav Andreychuk, co-chair of Golos, the independent election watchdog, on Telegram.

putin

Reactions As Vladimir Putin Secures A Fifth Term As Russia’s President After Tightly Controlled Vote

“The Russian election was one without a choice. Holding so-called elections in portions of Ukraine, Moldova, and Georgia violates international law. It is all the more amazing that so many Russians made it known over the weekend that they do not agree with this Russian president. That you go to a polling station even if you’re surrounded by military earns me the highest respect.” — German Foreign Minister Annalena Baerbock.

SOURCE – (AP)

 

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