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Bitcoin (BTC) price climbs as cryptocurrency market attempts comeback

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Bitcoin virtual crypto currency price is displayed on a phone screen in this photo.

STR | NurPhoto | Getty Images

LONDON — Bitcoin prices roared back on Monday as the cryptocurrency market attempted to recover from a broad sell-off last week.

Just after midday London time, the price of the world’s most valuable digital currency climbed 8% to $53,544 a coin, according to data from Coin Metrics. Two smaller digital tokens, ether and XRP, rose 10% and 12% respectively.

Last week, bitcoin slumped below $50,000 for the first time since early March after a proposed capital gains tax hike from U.S. President Joe Biden led to a wave of selling. The entire crypto market shed more than $200 billion of value in a single day.

Biden is expected to raise long-term capital gains tax for the wealthiest Americans to 43.4%, including a surtax. That triggered a brief dip in stock markets, and analysts said fears over the proposal may have extended to the crypto market.

Bitcoin has risen around 80% since the start of the year as more institutional investors and major firms like Tesla have jumped into the market, believing it to be a portfolio diversifier in the event of rising inflation. It’s down roughly 17% from an all-time high of nearly $65,000, however.

In recent weeks, crypto executives have warned of a potential clampdown on the market from regulators. Several officials, from U.S. Treasury Secretary Janet Yellen to European Central Bank President Christine Lagarde, have sounded the alarm about the use of bitcoin in illegal activities.

In Turkey, the central bank has banned the use of digital assets in payments, while two crypto exchanges have collapsed. The CEO of one of the firms, Thodex, has reportedly fled Turkey with $2 billion in investors’ funds.

Nevertheless, there are signs that crypto is entering the mainstream. Coinbase, the largest digital currency exchange in the U.S., went public in a blockbuster direct listing earlier this month, while PayPal has launched new features for trading crypto as well as using it for shopping.

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Premier League clubs agree to three-year renewal of UK TV rights

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The Arsenal players in a huddle before the Premier League match between Chelsea and Arsenal at Stamford Bridge on May 12, 2021 in London, England.

David Price | Arsenal FC | Getty Images

The Premier League has secured approval in principle for a three-year renewal of its TV rights deal with U.K. broadcast partners, including Sky Sports.

The deal, which would extend the current rights arrangements for another three years, is subject to parliamentary approval and any opposition to the proposed plans needs to be made by May 28.

Premier League clubs have also agreed £100 million ($140.6 million) of additional funding for National League, women’s football, League One and League Two clubs and grassroots game.

Business Secretary Kwasi Kwarteng is “minded to” approve the new deal.

In a statement, the Premier League said: “The U.K. renewals for the next broadcast cycle – from seasons 2022/2023 to 2024/2025 – will be concluded at the same overall value as the current arrangements between the Premier League and its broadcast partners.

“As part of the Premier League’s developing strategic plan, the renewals will provide financial certainty to clubs throughout professional football as a result of maintaining current levels of support and enables the League to commit to increased funding. This will give security and continuity throughout the pyramid until at least 2025.”

Richard Masters, Premier League chief executive, said: “The Premier League would like to express our gratitude to our broadcast partners for their continued commitment to the Premier League and support for the football pyramid.

“We are hugely appreciative of the Government agreeing in principle to allow this arrangement and for their continued support for the Premier League and the English game. COVID-19 has had a significant impact on football, and renewals with our UK broadcast partners will reduce uncertainty, generate stability and promote confidence within the football pyramid.”

The FA welcomed the deal, with their chief executive officer Mark Bullingham commenting: “This increased funding from the Premier League will provide vital support for local football clubs and facilities across the country.

“These clubs are often the bedrock of their community and run by volunteers who have gone above and beyond in the last year. We thank the Premier League for their positive action which will help the pyramid get back on its feet.”

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Portugal hotels face high demand after UK changes quarantine

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Beachgoers sunbathe and swim at a beach in Portimao, Algarve region, Portugal.

NurPhoto | NurPhoto | Getty Images

LONDON — The tables have turned for the Portuguese hotel industry on one announcement. 

The U.K. government said on Friday that from May 17 travelers from England will not need to quarantine when returning from Portugal. They will have to take a Covid PCR test within two days of their arrival in the U.K.— but this is a much simpler process compared to the rules applied to other destinations. 

Though rules might change depending on how the epidemiological situation develops, U.K. tourists were quick to jump on the opportunity to book a vacation abroad.

It’s been “absolute madness in terms of (booking) requests,” Katya Bauval, executive director of sales at the Vila Vita Parc hotel in the Algarve, south of Portugal, told CNBC over the phone.

She said that “bookings literally tripled in demand since Friday.”

Portugal’s largest hotel chain, Pestana, has experienced a similar rush for reservations. “There’s been a very substantial increase in bookings,” Jose Theotonio, CEO of Pestana Hotel Group, told CNBC on Wednesday.

Pestana said demand jumped 250% since Friday and rose by 475% in external booking operators. Consumers are mainly opting for places in the Algarve and Porto Santo, a small island in the archipelago of Madeira.

The preference of consumers is “clearly sunny destinations,” Theotonio said.

This signal from the British government has motivated other bookings.

Jose Theotonio

CEO of Pestana Hotel Group

Portugal also appeared to benefit from the inclusion of relatively few other popular European vacation destinations on the U.K.’s least restricted “green list.”

Spain, Italy and Greece — just to name some of the other competing destinations in the south of Europe — have not yet been added to the U.K.’s top traffic light list. Instead, these countries have been left on the U.K.’s “amber” list, meaning that if U.K. tourists travel to Spain, Italy or Greece they will then be required to self-isolate for 10 days on returning home.

“It was to Portugal’s advantage that Greece, Spain aren’t on the list,” Bauval said.

‘Motivated other bookings’

Portugal has become a hotspot for international visitors in recent years. In 2019, the country welcomed 24.6 million visitors — a 7.9% growth from the previous year, according to the country’s national statistics office.

The U.K. represented the biggest market for tourist stays in Portugal, accounting for 18.8% of the total number of nights in the country. This was followed by Germany, which was 12.3% of the total stays, and Spain, which accounted for 11%.

A woman sunbathes at a beach in Sagres, Algarve region, Portugal on July 29, 2020. Portuguese President Marcelo Rebelo de Sousa has promised to visit the Algarve every week this summer to help the regions struggling tourism sector overcome the effects of the Covid-19 pandemic and the UK governments decision to include mainland Portugal in its travel blacklist. (Photo by Pedro Fiúza/NurPhoto via Getty Images)

NurPhoto | NurPhoto | Getty Images

But the country’s tourism industry came to a complete halt in the wake of the coronavirus. The summer season experienced a later start in 2020 and continued at a much slower pace compared to previous years. Portugal was also forced to introduce a second lockdown at the start of 2021 due to a sharp increase in the number of Covid infections, but the strict measures have now been eased.

“This signal from the British government has motivated other bookings,” Theotonio also said, noting that the recent surge in demand has also come from tourists in Germany, Spain and the domestic market too.

U.S. tourists will take longer to come back

There’s also a common feature in recent hotel bookings: its immediacy. Visitors have mainly been booking a stay for May and June.

This type of booking is “even more important,” according to Theotonio as it reduces the likelihood that people will need to cancel their plans.

Portugal has also attracted many non-EU visitors in recent years. In 2019, there was a jump of 21.3% in the number of stays from American tourists; a 16.8% increase from China; and a rise of 14.9% from Brazil.

But this demand will take longer to come back.

“We feel it will take some time,” Bauval said, explaining how Vila Vita Parc had to shift its focus in the wake of the coronavirus pandemic to attract more Europeans. 

This is despite the announcement from European Commission President Ursula von der Leyen that vaccinated Americans will be able to visit Europe this summer.

“We don’t have illusions,” Theotonio said, expecting only a “gradual” return to pre-pandemic activity levels.

Tourists pull luggage as they walk towards a hotel at Villamoura beach in Villamoura, Algarve region, Portugal.

Bloomberg | Bloomberg | Getty Images

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April’s inflation surge wasn’t as drastic as it looked, but the real test is still ahead

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A woman wears a face mask while shopping for a baby shower gift during the Covid-19 pandemic, at Madison’s Niche boutique in Huntington, New York on April 21, 2021.

Alejandra Villa Loarca | Newsday | Getty Images

There is probably less than meets the eye from the startling inflation pop in April, as goods impacted by a variety of temporary influences pushed core price increases at the quickest pace since the Reagan presidency.

Headline inflation rose by 4.2% from a year ago, while core prices excluding the volatile food and energy sectors got their biggest one-month bump of 0.9% going back to 1981.

At the root of the increases were issues related to the pandemic, both in terms of how aggressive the current recovery is and how bad things were a year ago.

There were factors such as supply chain congestion that added to the pressures. At the same time, an aggressively recovering economy pushed prices for airline tickets (up 10.2% in April), hotels (8.8% higher) and used car prices (up 10%).

While that was happening, the things that drive inflation over longer periods, like housing costs and the price of services, showed increases consistent with where they’ve been over time. Shelter costs broadly increased 0.4% in April while services excluding energy rose 0.5%.

In all, the narrative that the burst in inflation that so many had been forecasting will be transitory likely holds up – at least for now.

“The more persistent categories of inflation (services, and rent specifically) were relatively tame last month, but goods prices surged, as did transportation and travel,” wrote Eric Winograd, senior economist at AllianceBernstein. “None of those moves are likely to be persistent. Over time, that means that the most likely course of events is still for inflation to settle down as the supply side of the economy catches up to the demand side.”

Still, the numbers were jarring.

For headline inflation, it was the fastest year-over-year gain since September 2008, just before the economy fell off a cliff due to the financial crisis. And the Consumer Price Index numbers came the same day AAA reported that gasoline prices eclipsed $3 a gallon nationally for the first time in about seven years.

Federal Reserve officials have repeatedly assured the public that the coming inflation push is largely a result of temporary factors plus distorted comparisons to the economic shutdown of a year ago.

What could change

In the central bank’s thinking, the collective belief that inflation either will stay low or remain high becomes a self-fulfilling prophecy, and it then becomes the Fed’s job to massage policy in whichever direction is desirable.

For at least a decade, collective expectations have been low.

But should readings like Wednesday’s become commonplace, if consumers continue to see stories about sold-out gas stations and car orders delayed by months due to semiconductor shortages or if growth broadly should accelerate even beyond the current lofty expectations, the inflation picture can change in a hurry.

“The fact is that when we factor in all the monetary and fiscal stimulus that’s been delivered (or shortly will be), the Covid crisis seems likely to be a net inflationary event, at least in the near term,” wrote Rick Rieder, chief investment officer of global fixed income at asset management giant BlackRock.

“The risk of overheating in multiple places across the financial and real asset arenas is becoming more and more of a realistic challenge for future policy, as some have suggested, and without an evolution of what heretofore has been policy reacting to emergency economic conditions, the risk from this will only grow,” he added.

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