How Will FTX Affect the Future of Crypto?  PCE Better Than Expected

How Will FTX Affect the Future of Crypto? PCE Better Than Expected

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2023-02-23 15:26:41

Market situation

US stocks fell slightly yesterday in the Dow Jones and S&P 500, while Nasdaq rose insignificantly by 0.13%. Stock futures continue to show a downtrend. Gold and oil rose to $1,817 an ounce and $81 a barrel, respectively.

Bitcoin fluctuates around $16,900 to $17,000. Altcoins fell slightly. By the end of November, the BTC price dropped 16%.

The Commerce Department reported that inflation rose in October in line with estimates, sending an indication that price increases may at least be stabilizing. The core personal consumption expenditures (core PCE) price index was up 5%, slightly below estimates.

Although the Fed takes a wide range of measures to gauge inflation, it favors the PCE index because it takes into account changes in consumer behavior, such as replacing cheaper goods with cheaper goods. more expensive items. That’s different from the consumer price index, which is a rough measure of price change.

The Fed explains the increase in food prices because the supply chain is still affected. When the circulation of goods is better, food prices will adjust. As for energy prices, which are affected by war as well as global economic trends. When the economy slows down, the demand for energy will also decrease, leading to lower prices.

The PCE index fell and the Fed also showed signs of wanting to slow down rate hikes. When interest rates rise to the level of inflation desired by the Fed, it may begin to stop raising rates.

And China may be planning to relax more about covid policy due to people’s stress. The country’s economy has also been hit hard by the epidemic and isolation.

In August, President Biden proposed a policy that would write off student loan debt of up to $10,000 for borrowers earning less than $125,000 a year, or $250,000 for married couples. The proposal is intended to benefit lower-income college students who would have their debt forgiven up to $20,000.

However, a federal appeals court on Thursday refused to suspend a Texas judge’s ruling that President Joe Biden’s plan to cancel hundreds of billions of dollars in student loan debt was illegal. Many mixed opinions also said that this policy is not fair to those who have paid their debts or who did not go to school and decided to choose a different direction. If this policy is passed, it will cost hundreds of billions of dollars in the budget at a time when inflation and government debt are still high.

How does FTX affect crypto futures?

According to Thuan, the impact of the FTX event can change a lot of things, but it won’t change anything. Many pro-crypto congressmen propose legislation for this market like Ms. Synthia Lummis. Or those who don’t like using FTX to attack crypto like Congressman Warren. Even the European Central Bank (ECB) said that, if the MiCA bill were passed, there would be no event like the FTX crash.

In general, many people who take advantage of this event want to promote their own legal thoughts and views to the market. Supporters continue to support and vice versa. So we haven’t seen any new laws that really help change the market. And exchanges like Binance, OKX, … also change themselves and are more transparent about the assets they are holding.

At this week’s hearing, Senator Roger Marshall said that the crypto market is a technology market, there is no good or bad. However, he compared the fall of FTX to the detonation of an atomic bomb. He also asked the chairman of the Commodity Futures Trading Commission (CFTC), Mr. Rostin Behnam, whether the US should stop the market to have time to learn more. The CFTC president replied that this is a global market and that if the US stops it, the market will continue to grow in other countries. At that time, the US will lag behind the market, so he thinks that the market should not be stopped in their country.

CFTC Chairman Says Only BTC Is Commodity

During a separate crypto event at Princeton University. CFTC President Rostin Behnam stated that the only cryptocurrency that should be classified as a commodity is Bitcoin.

Mr. Behnam implied that Ethereum is not a commodity despite having considered it before. In May, the CFTC president said in an interview with CNBC that he considers both Bitcoin and Ethereum suitable to be considered commodities. He also said “a lot” of other tokens fit the commodity category. This is very different from before.

He called on the authorities to analyze each crypto token, classifying each into a commodity or a security. Thereafter, delegating management to the SEC for tokens designated as securities and to the CFTC for those designated as commodities.

The CFTC chair’s change of opinion could also influence the SEC’s lawsuit against Ripple. Because Ripple is relying on the view of the former SEC chairman saying that ETH is a commodity, not a security.

Along with that, another event that caught the eye was Coinbase. 29 on its help pages, Coinbase said Coinbase Wallet will no longer support BCH, ETC, XLM and their affiliate networks. Coinbase cited these tokens as having “low usage” in its decision. Some people theorized that this decision by Coinbase could be related to ETH or that they knew something. If the SEC says that ETH is a security, that would contradict the previous statement of the former SEC chairman. It may also come under criticism from major companies that have invested in Ethereum following the SEC’s previous statement. Therefore, Thuan thinks that maybe the SEC will consider Ethereum after being hardfork as a security, ie ETC, not the ETH network now. If this assumption is correct, it will greatly affect ETC. We still need more information on what’s going on next.

Sam keeps giving interviews

After the Dealbook conference, Sam continued to share on Twitter that he still believes that FTX.Us still has money and stores 1:1 customer funds. Therefore, he did not understand why this exchange stopped allowing customers to withdraw money.

Sam still receives many interviews and billionaire Mark Cuban said that if he were Sam, he would be afraid that he would have to go to prison for a long time. He added, when he met Sam he felt that he was very intelligent but why not know anything. Sam is completely likely to face legal problems if any intentional fraud or fraud is detected.

Although many people find it strange, Sam did not listen to the advice of his lawyers, so he limited the interview because it could be used as evidence in court. Sam got an interview with ABC’s George Stephanopoulos in an interview on Good Morning America.

A key question for Bankman-Fried is whether FTX embezzled client funds by lending billions of dollars to his hedge fund Alameda. Bankman-Fried still echoed comments he also made to The New York Times on Wednesday. He denied knowing of any improper customer transfers between the exchange and Alameda. At the same time, he admitted he made mistakes and mismanaged himself as CEO.

When asked if Sam is afraid of potential legal problems and going to jail. Sam expressed yes and said that there are many things worrying him right now. Sam’s fortune has gone from $22 billion to $100,000 at the time of the interview, according to him. Maybe the growing season makes early achievers like Sam complacent and make mistakes. Sam still insists that FTX’s demise was caused by his mismanagement and not a scam or fraud.

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