🥵 Phew, what a day...

Crypto world explodes as Bitcoin sinks, Zhang Yiming steps down as ByteDance's CEO, and India's electronic market suffers amid COVID

May 20, 2021

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Read Time: 890 words, 4:27 minutes.

There’s so much to cover today so let’s get started.

First up,

Market Snapshot 📈

Sensex: 49,564.86 (-0.68% ) ↓

Nifty 50: 14,906.05 (-0.83% ) ↓

Dow Jones: 33,896.04 (-0.48% ) ↓

Nasdaq 100: 13,237.91 (+0.15% ) ↑

Bitcoin: $40,091.93

Top Stories 📰

1. What's going on with Bitcoin? 📊

It's been a pretty intense roller coaster ride for crypto hodlers.

Bitcoin, the world's largest cryptocurrency, reported a sharp 31% drop to $30,000, less than half of its record of nearly $65,000 last month. The drop was only short-lived as it later rebounded 33% to $40,000 in the afternoon.

But the damage did not stop there. Ether and Dogecoin, two other popular cryptocurrencies, also reported an accelerated drop to 40% and 45%, respectively. The panic selling also caused outages on major cryptocurrency exchanges like Binance and Coinbase, which recorded a 16% drop in its stocks.

According to CoinMarketCap.com, crypto markets have shaved over $850 billion from their combined market value.

While the recent tanking of digital tokens isn't pegged to any single cause, investors blamed it on fear, uncertainty and doubt (FUD) and Elon Musk's bearish tweets.

Last week, volatility exploded after Musk tweeted that Tesla won't accept Bitcoin as car payments, adding that he had no plans to sell the cryptocurrency — which he reiterated during yesterday's rout. Meanwhile, a recent statement by China's central bank about not accepting digital tokens as payments further added to the fall.

Why it matters? Cryptocurrencies are inherently volatile. In the past 11 years, Bitcoin has seen 47 instances of daily changes in prices by at least 20%. And while there's no guarantee of future returns, some bullish investors advocate long-term hodlers to revisit their investment strategies before dumping their digital tokens.

2. ByteDance's Zhang Yiming resigns as CEO 👋

ByteDance co-founder Zhang Yiming announced that he's stepping down as CEO and is transitioning into another role to focus on the company's "long-term strategy, corporate culture, and social responsibility." Rubo Liang, ByteDance co-founder and HR head, will take over as CEO of the internet giant.

The decision comes just as the TikTok owner plans for its much-anticipated IPO in Hong Kong or the US. ByteDance is also planning to use its artificial intelligence-driven, interest-based recommendations to venture into China's $1.7 trillion e-commerce industry to compete against big players like Alibaba and Meituan.

Before co-founding ByteDance in 2012, Zhang and Liang first collaborated to create a real estate search services called 99Fang in 2009. Later, Zhang built upon his highly refined AI recommendation engines to develop the Chinese news aggregator Toutiao in 2012 and subsequently founded TikTok - previously known as Musical.ly - in 2016.

ByteDance now seeks to increase ad revenue from its Chinese businesses (excluding TikTok) to 260 billion yuan in 2021, a 42% increase from last year's 183 billion yuan.

Why it matters? Zhang becomes the second person to step down from his role in recent times after Pinduoduo founder Colin Huang resigned from his board in March amid China's attempt to limit the influence of tech companies and their billionaire founders.

2. The pandemic is making a huge dent in India's electronic market 📱

As the coronavirus pandemic continues to ravage the Indian economy, the sales of mobile phone manufacturers have reached near-zero levels due to lockdowns and restrictions on online sales of non-essential items. As a result, smartphones and electronic giants have closed down their operations for the domestic market.

Big brands like Samsung and Apple, which export from India, have massively reduced their production units to nearly 25-40% of capacity to address the global demand. Meanwhile, Panasonic, Vivo, LG, Oppo, Carrier Midea, and Godrej Appliances have either significantly cut production or wound up their operations completely.

The sales of cooling appliances like AC and refrigerators have reported consecutive declines for two years in April and May. These businesses are expected to incur losses up to Rs 10,000 crore in 2021.

Around 15% of the domestic markets are currently open, given the restrictions, and only 5-6% of normal sales are taking place.

“There is no point in manufacturing goods and putting workers at risk... We will resume production when markets open up,” said Kamal Nandi, who heads the industry body Consumer Electronics and Appliances Manufacturers Association.

Why it matters? Extended lockdowns and restrictions would affect the companies' ability to stay afloat and would make a significant dent in India's global electronic market share, which stood at 3.3% in 2019.