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Central Bank of Cyprus Issues Warning on Economic Risks

The Central Bank of Cyprus (CBC) has issued a stark warning regarding potential economic risks, emphasising the necessity for vigilance and proactive measures to ensure economic stability. Governor Constantinos Herodotou, in his address, highlighted several key vulnerabilities that pose significant threats to the Cypriot economy.

Inflation Pressures

The CBC is particularly concerned about rising inflation rates. Persistent inflation can erode purchasing power and destabilise the economy. Governor Herodotou urged both policymakers and businesses to implement effective strategies to mitigate inflationary impacts, suggesting that a coordinated approach is essential to managing this risk.

Real Estate Market Concerns

Another area of concern is the rapid growth in the real estate market. While growth can be a sign of a robust economy, unchecked expansion can lead to speculative investments and market bubbles. The CBC’s cautionary stance suggests that measures should be taken to ensure that real estate investments are sustainable and that market stability is maintained.

Banking Sector Stability

The stability of the banking sector remains a top priority for the CBC. Governor Herodotou emphasised the importance of stringent regulatory frameworks to ensure that financial institutions can withstand potential economic shocks. The CBC advocates for a resilient banking sector that can support the economy even during periods of uncertainty.

Strategic Recommendations

To counter these risks, the CBC recommends several strategic measures:

  1. Enhancing Economic Diversification: Reducing reliance on a limited number of economic sectors can mitigate risk and promote stability.
  2. Implementing Robust Financial Regulations: Ensuring that financial institutions adhere to strict regulatory standards is crucial for maintaining stability.
  3. Fostering Sustainable Growth: Encouraging practices that promote long-term economic health over short-term gains is essential.

Governor Herodotou also stressed the importance of maintaining fiscal discipline. This involves managing public finances prudently to avoid excessive debt and ensuring that monetary policies are aligned with long-term economic objectives.

The CBC’s warning serves as a critical reminder of the delicate balance required to maintain economic stability amidst evolving global and local challenges. Stakeholders in Cyprus’s economy must heed these warnings and take concerted actions to safeguard the nation’s financial health. The proactive measures suggested by the CBC are aimed at fortifying the economy against potential risks and ensuring sustainable growth.

Bitcoin in 2025: The Boldest Predictions for a Record-Breaking Year

After an impressive 150% surge in 2024, Bitcoin has captured the attention of investors and industry experts alike. As the world’s largest cryptocurrency crosses the $100,000 mark, the stage is set for new milestones in 2025. From regulatory shifts to institutional adoption, here are the boldest forecasts shaping Bitcoin’s future:

A Year of Transformation: Bitcoin’s 2024 Journey

In December 2024, Bitcoin soared past $100,000, fuelled by regulatory advancements and political changes. The victory of Donald Trump in the U.S. presidential election brought promises of a more crypto-friendly administration, including the replacement of SEC Chairman Gary Gensler. Trump’s proposed creation of a strategic Bitcoin reserve and broader deregulation sent ripples of optimism through the market.

Key events like the approval of the first U.S. Bitcoin exchange-traded funds (ETFs) and the halving cycle—a supply-reducing event occurring every four years—further bolstered Bitcoin’s rally. Despite lingering concerns from the 2023 scandals involving FTX and Binance, the cryptocurrency rebounded strongly, doubling in value.

What’s Ahead: Predictions for 2025

CoinShares: $80,000–$150,000

James Butterfield, head of research at CoinShares, anticipates Bitcoin trading between $80,000 and $150,000. The price trajectory hinges on regulatory actions under the Trump administration, which could amplify institutional interest. Butterfield notes the potential for Bitcoin to eventually reach 25% of gold’s market capitalization, aligning with a $250,000 long-term target.

Matrixport: $160,000

Crypto financial services provider Matrixport predicts Bitcoin could hit $160,000, spurred by the sustained demand for spot ETFs, favourable macroeconomic conditions, and growing global liquidity. The firm also expects Bitcoin’s notorious volatility to ease, resulting in less severe corrections compared to previous cycles.

Galaxy Digital: $185,000

Alex Thorne of Galaxy Digital sees Bitcoin surpassing $150,000 in early 2025 and closing the year at $185,000. Thorne attributes this growth to a confluence of factors, including institutional adoption, corporate integration, and even national-level investments. Galaxy Digital projects that spot Bitcoin ETFs will manage over $250 billion in assets by 2025.

Standard Chartered: $200,000

Standard Chartered’s Jeffrey Kendrick envisions Bitcoin doubling to $200,000 by the end of 2025. The prediction hinges on accelerating institutional inflows, which have already added 683,000 BTC to portfolios this year. Kendrick expects pension funds to play a pivotal role as reforms under the Trump administration facilitate broader ETF adoption.

Carol Alexander: $200,000

University of Sussex finance professor Carol Alexander shares the $200,000 forecast, though she warns that volatility will remain a challenge. While favourable regulation in the U.S. may boost prices, the unregulated nature of crypto exchanges will keep uncertainty alive.

Bit Mining: $180,000–$190,000

Yuwei Yang of Bit Mining projects Bitcoin will peak between $180,000 and $190,000, driven by lower interest rates, Trump administration policies, and increased institutional adoption. However, Yang cautions that sharp corrections could bring the price as low as $80,000.

Opportunities and Risks

While optimism reigns, experts highlight potential risks, including geopolitical tensions, market disruptions, and unexpected regulatory measures. Tightening trade relations between the U.S. and China or shifts in Federal Reserve policies could temper Bitcoin’s bullish momentum.

The Bottom Line

As Bitcoin continues its ascent, 2025 could mark a pivotal year for the cryptocurrency. Whether it’s reaching $200,000 or navigating the challenges of a rapidly evolving market, Bitcoin remains a transformative force in the financial world. Investors and enthusiasts alike are watching closely, ready for what promises to be another groundbreaking chapter.

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