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US stocks had another session of falling in all three Dow, S&P 500 and Nasdaq indexes. Stock futures were flat and mostly flat. Gold and oil fluctuated around 1769 USD/ounce and 85 USD/barrel.
Bitcoin fell to around $16,700. Altcoins also fell slightly.
Although there are no official results of the midterm elections in the US yet, Republicans still control a majority of seats in the House of Representatives. The leadership of Congress will be divided, with the Senate in the hands of Democrats.
Companies continue to update third-quarter reports and projections for the final quarter of the year. Target reported a roughly 50% drop in profits in the third quarter as the company cleared up unwanted inventory and sales slowed into the holiday season.
The company also cut its fourth-quarter outlook after sales slowed at the end of October. Consumers have slowed down spending because inflation is high. In addition, Target also said that it plans to cut costs by up to $3 billion over the next three years.
After a period of very rapid rate hikes, it seems that the Fed is showing signs of wanting to slow down the rate hike. San Francisco Fed President Daly estimates lending rates will rise to 4.75% – 5.25%. Interest rates are currently 4%, which means the Fed will probably increase the total by 1%. Mr. Daly also said that now house prices have decreased, people’s spending has decreased and CPI has decreased. Another thing the Fed cares about is that unemployment is starting to rise, but they need unemployment to be higher than it is now.
Another, Fed governor Christopher Waller, said the same thing. He said he is ready to cut interest rates soon, as long as economic data backs this up. The two indicators he is interested in are the PCE inflation report and the next jobs report showing a downward trend.
The Fed indicated it will likely raise interest rates lower than 0.5% at its December meeting. But the Fed is also watching the market’s reaction to these projections. As a result, the Fed still needs data related to inflation and unemployment to make a final decision.
Companies affected after FTX bankruptcy
The companies following the FTX crash that are being affected are Genesis Global Trading. Genesis is a company that provides services for other crypto companies such as providing earning services for Gemini,… Recently, Genesis’ lending division Genesis Global Capital is suspending new loans and buying.
The Genesis incident affected the Gemini exchange in the United States. Gemini exchange has also said it is suspending withdrawals on Earn accounts due to the Genesis changes. Genesis is that program’s lending partner. Gemini also confirmed that the Earn index is affected and other categories such as spot trading can still withdraw normally. A series of investors withdrew their money from Gemini after that. Nansen blockchain data shows Gemini saw a net inflow of $485 million in 24 hours, the largest of any crypto exchange.
Investors continue to worry because Genesis provides services to many companies, and which company or exchange will be affected next. In addition, Genesis is a company that is behind DCG (Digital Currency Group), which is the parent company of Coindesk, Foundry and Grayscale. Many fear that Genesis problems will cause Grayscale to sell BTC to support it. However, this possibility is currently not high and there is only information that Genesis has liquidity problems.
This is a very sensitive period. It is also challenging for exchanges. Any exchange that can pass this stage will gain the trust of investors. An exchange is a place to trade, not a place to store crypto. Therefore, we need to learn how to safely store our own crypto.
Next, crypto hedge fund Multicoin Capital has stated that it has lost more than half of its capital (55%) of its flagship fund in about two weeks. This is one of the biggest and oldest investment managers in the crypto space that is not immune to influence. Multicoin says that it will write all of its assets located on FTX like its FTT token to zero for the time being. This company that also invests heavily in Solana has also been affected and dropped sharply. Solana-based assets include Mango; Shares FTX.US; and prominent derivative contracts.
The company Circle has also worked with Genesis in the past. Circle and Genesis have signed a $25 million deal in 2020, which aims to accelerate the global adoption of USDC in the mainstream finance sector. As part of a strategic partnership, Genesis helps Circle add lending and interest deposit services in USDC. In response to the news and investor worries, Circle has reassured users that it has lent $2.6 million to customers through Genesis but has collateral and will liquidate it when appropriate.
Sam Bankman – Fried gives an interview
The FTX case is currently being investigated by many major US agencies such as the SEC, the Department of Justice and even the FBI. House lawmakers are calling on Sam Bankman-Fried and other executives to come to Capitol Hill to testify at a December hearing on the crypto exchange’s collapse.
Usually, the heads of companies under investigation will not be interviewed. But lately Sam has been giving a lot of interviews via Twitter. One of them was Sam giving an interview to reporter Kelsey Piper of Vox.comwho had interviewed him a few months earlier.
In this interview, Sam said a lot of things against him, because this information can be used in court. The reporter asked Sam how, behind PR and charitable donations and lobbying, Bankman-Fried really believes in what is right and what is wrong and how ethical it is. In addition, he is also actively involved in contributing to a regulatory framework for the crypto market, do you really believe so.
At this point, Sam said that his mentioned jobs are mainly for PR and image building. Sam says that no one really cares about the law in the crypto market. The legislators, he said, didn’t really know what was good or bad, but only wanted laws to govern the regulation of the market. Laws are created to benefit them and benefit them economically. In addition, Sam said that morals are not concerned with winning and losing. He mentioned that CZ won because he had more money and said that the winner is the hero.
When asked about Alameda and FTX and their financial relationship, Sam seemed to somewhat admit that he had bent the truth. He said that when users transfer money to FTX, the money actually goes to the account of the company Alameda. Sam denied transferring FTX to Alameda is correct because FTX does not have a bank account and when the user transferred in was Alameda’s account. And the fact that he said that FTX has money to pay users is not wrong because the money lent to Alameda is still there. Sam who operates FTX really didn’t know about this until it was too late. But throughout the story Sam doesn’t feel guilty about the FTX crash. It is illegal for FTX to take money from loan users without notifying them.
Sam eventually says that the biggest mistake here is that he doesn’t know Alameda well even though he owns 90% of the company. He also said that his first priority right now is to earn money to save FTX. However, there is no sign of any investors wanting to join FTX right now.
Regarding the two co-founders, Sam said that Gary Wang is very scared. Technical director Nishad Singh felt shame and guilt. As for the FTX hack, Sam said that it could be a former employee of the exchange or someone using an employee’s computer hacked and took away hundreds of millions of dollars.
At this time, the market is very confused and worried. But the market will become more optimistic when the optimist eventually turns pessimistic. When the affected companies come out, the market is left with only the strong ones. At this time, the market purge and restructuring is taking place and it will create an accumulation opportunity for long-term investors. The event of FTX can be viewed from a bad perspective or an opportunity depending on each person, their position as well as their belief in this market.
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