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How Liquid is Your Business?

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Just as human beings who are put on life support machine (oxygen) could live temporary, businesses that rely on overdraft, loans, government bailouts, need a rethink. Have you heard about gearing and leverage? Simply defined as the receipts and payments of the operations of a business, cashflow statement is meant to assist or provide an ‘invisible hand’ to the daily operations of a business entity existing and new businesses alike. This is of special importance to small businesses that are unable to raise funds at short notice. A business can make huge profit and yet might not be liquid; it might be starved of cash. Thus, profitability does not necessarily mean liquidity.

Profitability is an accounting concept measured by using either net profit margin or gross profit margin. Liquidity is the ability of turning current assets into cash or ‘legal tender’ for the operations of a business concern with ease.It is measured by using either current ratio or quick assets ratio. This is significant in that current assets financing are dependent on the level or amount of short-term finance and their sources of funding.These must also be planned in relation with the cash flow generation of the firm concerned.A firm can be profitable and yet have liquidity problems.

I tell people that you can neither ‘eat’ your properties, machines, probably your stock nor use them to pay your staff, suppliers or creditors. Collateral for a secured loan may be yes. But for how long? It is no gainsaying the fact that most of the blue chip automobile companies like General Motors bowed to the recession in their early stages because they were short of the most liquid asset. Their failings could among others be attributed to too much reliance on the share price (the demand side) of the market capitalisation. The reason is obvious that when the consumer confidence fell and the demand of shares by investors went down, their market capitalisations dropped and the rest is what we all witnessing and feeling now.

Most of the big automobile companies which crashed under the current recession were mainly as a result of failings in having adequate liquid funds to carry on. Though some banks failed, at least there is known to be some regulations of a sort to keep funds for the ‘rainy day’-capital adequacy ratio.MiFID;Basels I & II and the recent ‘Stress test’ instituted by the US government are some examples.

In the light of this unexpected shocking and surprising turnaround for the so-called blue-chips there should be some form of regulatory mechanisms directly monitored and controlled and kept by the central banks whereby companies keep some cash or reserves(that could easily be turned into cash) being at least 2 years’ salaries and expenses of their business operations and staff.Alternatively,the banks can ran a scheme to guarantee the salaries of the staffs and expenses of the business.The benefits of this scheme would be enormous and would definitely outweigh the costs.Socialism?No far from that. Still mixed economy but just being more cautious so that the excesses of the few would not bring down the whole economy thereby bringing untold hardships to the masses.

Principles are principles, they might not work once but they do work most of the time. The ‘stress test’ introduced by the US recently is reported to have been successful (though it is early to say so)However, governments who intend to ‘copy’ the US ‘s ‘stress test’ should consider that with respect to their business environment and also wait for the ‘dust’ to settle down.

The business cycle is real but it could be somehow manipulated or well managed. Economists will tell us that a firm can enjoy economies of scale for a very long time if knowing what can bring in diseconomies of scale; the firm can manipulate or manage them in order to maintain the L-shaped Long Run Average Curve (LRAC) and will not get the usual U-shaped LRAC in the long run. I stand for correction. Survival of a business entity depends not so much on profits as on its ability to pay its debts when they fall due and have cash available for its daily operations. Such payments might not only include profit and loss items such as material purchases, wages, interest and taxation but also capital payments for new non-current assets and repayments of loan capital when they fall due, for example on redemption of debentures.

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Did Turkey’s President Say “We Are In A War Against Bitcoin”? An Investigation

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War against Bitcoin, people with Turkish flags

Is President Erdogan so out of touch with what’s happening around him that he declared war against Bitcoin? Or is this a case of “lost in translation” and quotes out of context? An article titled “We are in a war against bitcoin,” says Turkey’s president” has been making the rounds over at Bitcoin-Twitter, receiving both mockery and rightful criticism. However, we noticed a crucial detail: the article doesn’t contain a direct quote from Erdogan. That’s suspect.

Related Reading | New To Bitcoin? Learn To Trade Crypto With The NewsBTC Trading Course

Armed with an iron will and Google Translate, NewsBTC explored the issue and came to unexpected conclusions. 

Let’s fall into the rabbit hole.

Is It War Against Bitcoin Or War Against Cryptocurrencies? 

The original article cited a mainstream and generally trusted source, an article in Turkish at Bloomberght titled “Erdogan: We have a separate war against cryptocurrencies.” Reportedly, the president held a Youth Meeting Program, so his audience for this was students from all over the country. They were discussing the Digital Turkish Lira, the country’s proposed CBDC, and one of the participants asked about their current views on cryptocurrencies:

“Erdoğan said that they do not have a problem of opening up to crypto money, on the contrary, they have a separate war and struggle against them.

Erdogan said, “We will not give them such a premium, nor will we. Because we will continue on our way with our money, which is our fundamental identity in this matter.”

He never even mentions a war against Bitcoin. Remember, this is a Google translation and some info might’ve been lost. However, the discrepancies are there. The President says they “do not have a problem” with crypto, but that “on the contrary, they have a separate war and struggle against them.” On the contrary to what? And do notice, it’s not a direct quote either. In the actual Erdogan quote, he says nothing about a war against Bitcoin.

We need more data. Let’s consult other sources.

What Did President Erdogan Say Exactly?

A quick search leads us to The New Arab. They don’t quote the President directly, but their translation makes much clearer the intent of what he said:

“Erdogan claimed that the country “definitely” doesn’t have a problem with the spread of digital assets.     

However, that Turkey would carry on with its own money, which he believes is part of the national identity.”

They don’t have a problem with the spread of digital assets because they’re preparing their CBDC, and their way to sell it is that money is “part of the national identity.” Got it. But, what about this war against Bitcoin thing?

A second search leads us to Newsbit, who seemingly quote a much more clear-headed President Erdogan directly:

“We have absolutely no intention of embracing cryptocurrencies,” the president replied, adding: “On the contrary, we have a war against them. We would never support cryptocurrencies. Because we continue with our own currency that has its own identity.”

Ok, now we know that Erdogan never said anything about a war against Bitcoin and always referred to cryptocurrencies. And that, in code, he was always talking about the Digital Turkish Lira. However, did he really say all that? That quote seems suspiciously close to the original Bloomberg quote, and that one wasn’t literal. If the President said everything that clearly, why wouldn’t Bloomberg quote him?

BTC price chart for 09/20/2021 on Exmo | Source: BTC/USD on TradingView.com

Time To Consult Primary Sources

Luckily for us, Newsbit linked to the Anadolu Agency, a Turkish state-run news agency. This is as close to primary sources as we’re going to get. A report on the whole event that only casually mentions cryptocurrencies at the end. Is the quote present in that report? What did President Erdogan say exactly? Well, according to the Anadolu Agency:

“Erdoğan said that they do not have a problem of opening up to crypto money, on the contrary, they have a separate war and struggle against them.

Erdogan said, “We will not give them such a premium, nor will we. Because we will continue on our way with our money, which is our fundamental identity in this matter.”

Related Reading | Turkey’s Economic Turmoil Shows Bitcoin Is a Better Bet Than Emerging Markets

That’s right! The same exact quote with the same exact wording that Bloomberg used at the beginning. So, Bloomberg literally copied and pasted their article. And Newsbit’s supposed quote is just a rewording of that phrase. We don’t know exactly what President Erdogan said, but at least his intention is clear: Yes to his CBDC. War on cryptocurrencies. And we know for sure he never said anything about a war against Bitcoin.

Cryptocurrencies and Bitcoin are not synonymous, journalists.

Featured Image by Faruk Melik ÇEVİK on Unsplash - Charts by TradingView

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With Bitfinex Integration, Can the Bulls Drive the Price for Polygon (MATIC)?

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With Bitfinex Integration, Can the Bulls Drive the Price for Polygon (MATIC)?
  • Twitter’s Altcoin Sherpa endorsed MATIC.
  • Polygon said MATIC token would soon be available on Bitfinex.

Since the market sell-off on September 7, MATIC has been attempting to regain its initial bullish momentum. Although lower highs outlined its positive trend, traders were unable to maintain prices.

Its recent rise from $1.20 may be beneficial if another higher high forms. Bulls would lose out if the market closed below the 23.6 percent Fibonacci threshold. According to CoinMarketCap,  Polygon price is $1.19 USD with a 24-hour trading volume of $1,143,929,659 USD.

Closing over $1.50 would have solidified an uptrend, but that wasn’t the case yet. A pair of red candlesticks on the charts signalled the end of MATIC’s next upcycle.

While MATIC’s trend is perplexing, the signs have improved. On September 15, the RSI climbed above the half-line and briefly into the overbought zone, indicating a bullish rebound. Bulls held sway as the RSI found support around the mid-line.

A Positive Trend Maybe Anticipated

Twitter’s Altcoin Sherpa endorsed MATIC. Despite the token’s current consolidation, prediction is of significant increases in the following run. As per the tweet, it expects MATIC to hit $1.75 on the next leg up.

MATIC was trying to build an uptrend following a double top formation, but market watchers were sceptical. The bulls had an advantage in each case, and a win is not out of the question. A positive trend may be anticipated if MATIC rebounds back from the 38.2% Fibonacci level and reaches $1.50.

Polygon just tweeted that MATIC token would soon be available on Bitfinex. It’s one of the oldest and most reputed liquid exchanges.

Thanks to Bitfinex’s integration, users will access MATIC on all major exchanges, including Coinbase and Binance. Also, it can act as a catalyst to bring back the lost momentum for MATIC.

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SushiSwap Fails to Break Major Resistance Area, Can it Break-Through?

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SushiSwap Fails to Break Major Resistance Area, Can it Break-Through?