The giant that slayed crypto
Last week, the entire crypto market crashed as one of the industry’s biggest players watched their empire evaporate in five days flat. Sam Bankman-Fried’s $16 billion empire, which consists of his exchange FTX and his hedge fund Alameda Research—ran to zero in five days flat, bankrupting 130 affiliated companies with it. FTX has since announced it would be filing for bankruptcy, and Bankman-Fried has stepped down as CEO.
The crypto industry is witnessing one of the most devastating contractions of wealth in financial history. Following the fall of FTX, cryptocurrencies saw a sharp decline as investors fret about the stability of the crypto space. Bitcoin, the biggest cryptocurrency by market value, dropped to an intraday low of $16,543.48 less than 24 hours after residing at a high of $17,480.18. And Ethereum slipped to a bottom of $1,211.33. While FTT, the smaller token tied to FTX, was down a further 16% by the end of the week after collapsing 72% on Tuesday when the sad news broke. Its market cap dropped below $600 million, down from around $3 billion at the start of the week. The collapse of FTX is likely to lead to more pain and result in a permanent scar on the face of the crypto industry.
New banknotes the solution to Africa’s inflationary pressures?
The Bank of Central African States, the common bank for the six-member Central African Economic and Monetary Community will release new banknotes in mid-December. The decision to circulate the new range of banknotes of FCFA 500, 1,000, 2,000, 5,000, and 10,000 comes after an extraordinary session of the Ministerial Committee of the Central African Monetary Union. This means that come December 2022, Cameroon, Gabon, Chad, the Central African Republic, the Republic of the Congo, and Equatorial Guinea will have new banknotes in circulation.
The introduction of new banknotes into the economies of the six countries is coming at a time when the current global economic situation is marked by inflationary pressures at both national and international levels. The body believes the new notes will increase the propensity of economic agents to hold and consume money.
Traditionally, BEAC renews its range of banknotes every 10 years, but the announced renewal is the first in 20 years. The body had earlier approved the production of the banknotes in 2019 but had to put plans on hold. It appears African countries are towing the new notes route to salvage inflationary pressures. Two weeks ago, the Central bank of Nigeria (CBN) started taking steps to redesign, produce, and circulate a new series of banknotes to help drive its cashless policy, fight corruption, and reduce inflationary pressures.
Meta mass layoff
To round off the week, Meta, the parent company of Whatsapp, Instagram, and Facebook, let go of 11,000 employees, the first mass layoff in the company’s 18-year history. The decision to lay off so many employees might not be far from the recent downturns experienced by the company. Since January, Meta’s stock has fallen more than 70%, mostly because of Zuckerberg’s bet to invest billions of dollars in a metaverse platform that has not been well received. In addition, its advertising revenues have plummeted, and the company no longer shows growth in the number of users.
ICYMI: Market roundup
- The NGX All-Share Index declined by 0.68% last week to close at 43,968.75 points. The top gainers were Unity bank plc (35.71%), Royal Exchange plc (22.22%), Mrs Oil (9.83%), E-tranzact international (0.37%), and Geregu power (8.50%). The top decliners were Prestige assurance (-15.22%), Learn Africa (-10.71%), Guinness Nigeria (-9.95%), Flour Mill (-9.90%), and Julius Berger Nig (-9.81%).
- The naira increased against the dollar from N435.79/$ to N441.46/$ on Friday at the Investors’ and Exporters’ window.
- Brent crude closed the week at $95.99, while US West Texas Intermediate (WTI) crude closed at $88.96.
- The cryptocurrency market went down -2.09%. Bitcoin reduced by 22.32% to close at $16,575.41, Ethereum gained 24.32% to close at $1,231, and Binance Coin lost 21.25% to close at $278.84.
- Blnk, a fintech startup that enables instant consumer credit in Egypt, raised $23.7 million in equity and debt funding, and $8.3 Mn in securitized bond issuance to accelerate financial inclusion within underserved communities across the country.
- Brotinni, an Egyptian food tech and dark butcher’ solutions startup bringing innovation to the meat industry raised $600k in a seed funding round led by Innlife investments.