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2023-03-08 16:25:40
Market situation
US stocks yesterday were still in a down session because the market expected the Fed to raise interest rates soon.
Bitcoin doesn’t seem to be affected much by this rate hike. BTC price still holds around the good level of 17,600 USD. Most altcoins fell slightly.
Fed raises interest rates by 0.5%
In line with the expectations of most investors, the Fed voted to raise the overnight borrowing rate by 0.5%, bringing the rate to a target range of 4.25% to 4.5%. This is the highest interest rate in the past 15 years.
As for next year’s interest rate vote, most Fed officials think rates will be around 5.1% to 5.6% by the end of next year. Interest rates will begin to fall in 2024 and beyond. This is a good sign for the market because the current Fed rate is 4.5%, so next year the Fed will increase less. This information reflects the Fed’s thinking on interest rates and is partly a cyclical analogy of the BTC halving.
During the press conference, the Fed said that high inflation is not good for anyone so the agency is still on a path to push inflation below 2%. However, the Fed still finds that the path to bringing inflation back to the target number is difficult. The Fed continues to sell bonds as part of its efforts to reduce inflation. The Fed said that the US economy is slowing down but still has growth. Real estate also cools down because of high interest rates. The agency also estimates that US GDP in 2022 and next year is around 0.5% and there is no financial recession. Jobs are still doing well and the Fed wants a rebalancing in the unemployment rate. CPI for October and November were very good, but the Fed still needs more evidence that inflation has fallen. Even so, the Fed still feels that its actions are still on the right track and needs more time to see clearer results.
Most Fed officials agree that interest rates will be more than 5% in 2023. That is, next year, the Fed will only increase interest rates by 0.75%, equivalent to 0.25% increase each time. However, the Fed said that the pace of rate hikes no longer matters. The important thing here is to stop interest rates at what level and for how long. What the Fed can’t manage today and people’s consumption. When people actually consume less, inflation really goes down. To do this, the Fed is trying to reduce unemployment and make people worry about the future, then they will get serious and reduce spending. The Fed has shown consistency and seriousness in pushing back inflation, but its tone has been more dovish.
The Bank of England and the European Bank are also planning to raise interest rates by 0.5%. At that time, it will affect the DXY index which tends to cool down. This index is negatively correlated with financial markets so it is a good thing for investors.
Updates related to FTX
The Bahamas Securities Commission has criticized the new CEO of FTX for his statements regarding the ongoing investigation into FTX.
The statement that the Bahamas government was referring to is what John J. Ray III was referring to recent reports that the Bahamas government asked former CEO Sam Bankman-Fried to create a token of value. new millions of dollars and give them control. Mr. John J. Ray III said there was something shady going on here.
The Bahamas government says this is only part of their exchange with the SBF. They added that whatever the exchange was, their primary purpose was to hold and manage FTX assets to return to the victims.
The Bahamas regulator also criticized Ray for using “redacted email correspondence” between officials and Bankman-Fried. The release says those deals were designed to create a false impression of the media and that Ray was well aware of the entire scenario. The agency also asked Mr. Ray to contact the Bahamas government for clarification before announcing it in the media. After this news, many people see that there is more confusion between the Bahamas government and the SBF.
The fall of FTX is an opportunity for anti-cryptocurrency enthusiasts to rekindle discussions around the dangers of cryptocurrencies. While some political leaders blame the crypto ecosystem for the alleged fraud of the SBF. Others find it unhelpful to blame the entire industry for the actions of one person. In fact, frauds like FTX’s are also common and often seen in the financial markets.
Those congressmen who support crypto will continue to support. Those who do not support will use the FTX event as an example to disadvantage this market. But ultimately, we still need clear crypto laws to better protect investors.
U.S. Senator Elizabeth Warren, who is not a crypto advocate, also joined Congressman Roger Marshall in proposing the Digital Assets Anti-Money Laundering Act of 2022 on December 14. This regulation requires KYC of guests. banks and require crypto companies to comply with the same anti-money laundering laws as banks. The seven-page bill would expand business classifications applying the law as money services (MSBs), ban financial institutions from using technology such as digital asset mixers and regulate cash machines. automatic or ATM.
However, many provisions of this law do not apply to some companies such as BTC miners, because BTC miners cannot know whose transactions and where they come from. This bill will need to be negotiated and revised and cannot be applied practically to the crypto market yet.
Other information:
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Charles Hoskinson said that he has heard rumors that Ripple’s lawsuit with the US Securities and Exchange Commission (SEC) will be concluded this week. He has confirmed this is a rumor and has not confirmed any information.
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Taking advantage of the crash of FTX, the Canadian government tightened regulations with cryptocurrencies. According to a statement by the Securities of Canada (CSA), all crypto-trading companies operating in Canada, both domestic and foreign, must comply with the newly expanded provisions that prohibit them from providing financial services. margin or leverage trading services to any Canadian client.
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Paypal and the company ConsenSys, the company behind MetaMask, have teamed up that Metamask will add an integration to its crypto wallet so that users can buy crypto using their PayPal account. The partnership between MetaMask and PayPal will benefit both companies.
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With an internal investigation led by Elon Musk identifying censorship-related issues on Twitter, former Twitter CEO Jack Dorsey promoted the idea of a “free and open protocol” for Twitter. social network. According to him, the idea includes making the social network resilient to corporate or government control, giving the authority to remove content only to the original author, and exercising censorship through algorithmic choice.
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