Inflation Rises, EUR Declines

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2022-10-03 22:46:44

Market situation

US stocks ended the day with a loss in all three Dow Jones, S&P 500 and Nasdaq indexes with the biggest drop of 2.26%. Stock futures rose slightly. Gold price is flat at 1725 USD/ounce. And oil fell slightly to 93 USD/barrel.

Bitcoin price goes around 19,000 USD. Altcoins fell slightly.

CoinShares Chief Strategy Officer Meltem Demirors has predicted a longer crypto winter than expected. She also thinks that crypto is likely to have another wave of declines. At that time, those who have shaken confidence will eventually leave the market.

CoinShares statistics last week also show the flow of money back into crypto funds. According to the data, hedge funds added $14.6 million in crypto over the past week. Bitcoin saw a $1.7 million drop while the Bitcoin Short Fund inflow reached $6.3 million. Inflows into Ethereum increased by $7.6 million, the rest was inflows into small altcoins.

Financial and crypto markets are also still influenced by macroeconomic news. In general, inflation is expected to have a decreasing trend but the overall CPI rate will still increase due to high fluctuations in energy and food. The White House also spoke out that June inflation could be high. However, inflation has also peaked, so this July may have a good progress.

The Fed is also waiting for the CPI and unemployment reports to make decisions on interest rates at its next meeting. The Fed rate has increased to 1.75% and has affected the market. Meanwhile, the European Bank has yet to raise interest rates despite high inflation. This led to a much lower price of the Euro against the USD. The DXY index shows that the USD is getting stronger than other currencies such as Euro, Yen, … Europe is also a place that is directly affected by the war between Russia and Ukraine, so the economy is more difficult.

Updates on Celsius and Three Arrows Capital

Simon Dixon, CEO of BnkToTheFuture who is also an investor in Celsius, said that he has secured investor liquidity up to $6 billion to solve Celsius’ liquidity problems. The condition to get this money is that Celsius needs to publicly share its balance sheet with investors. However, Celsius refused and Simon Dixon’s proposal was dropped.

Many people criticized that Simon Dixon did this just to buy Celsius but he denied this allegation. With Celsius’s situation not very positive and the road ahead very difficult, few investors want to invest in this company.

And Three Arrows Capital (3AC) filed for bankruptcy, but the CEO of this company did not appear and is said to have run away. Yesterday, 3AC’s Zhu Su finally spoke up on Twitter after a month of silence and started sharing the company’s wealth statistics. However, Zhu said that he is an investor and shareholder, so he is also a creditor and needs to be compensated.

Judge Martin Glenn of the Southern District of New York issued an urgent recommendation over the past day to freeze the Three Arrows’ assets. Mr. Glenn noted in the written decision that only designated bankruptcy liquidators have the authority to “transfer, tokenize, or otherwise dispose of any debtor’s assets within territorial jurisdiction.” of the United States”. At the same time, creditors who have the right to request 3AC need to appear in court and it is illegal to fail to do so. This may be the reason why Zhu Su was afraid and spoke up.

Bitcoin Spot ETF Situation

Grayscale sues the SEC for rejecting the proposed Bitcoin ETF spot. Grayscale said the SEC acted arbitrarily and erratically. Grayscale’s lawsuit is likely to take 12 months to two years, and the odds of winning are very low. To win the case, Grayscale must present evidence that the SEC’s actions for any reason intentionally harmed US investors. This is very difficult to do. Therefore, many people consider this lawsuit to be unhelpful.

While rejecting Grayscale’s proposal, the SEC pushed the deadline for approval or rejection of the ARK 21Shares Bitcoin Spot ETF (ETF) to August 30. Although the SEC did not want to accept the Bitcoin Spot ETF fund, it did not refuse. rejected outright but pushed back the allotted time for some other proposals.

With Grayscale, this is a difficult time because their GBTC product is no longer popular. Earlier, crypto lender BlockFi had indicated that it would no longer accept Grayscale Bitcoin Trust shares as collateral. After some back-and-forth, BlockFi accepted back the GBTC collateral. However, they will bring the valuation down with the mortgage.

Similar to Grayscale, Bitwise Asset Management also said that it does not rule out the possibility of suing the SEC because Bitwise was also denied a second fund by the SEC last month. The Bitwise CEO also shared that the demand for crypto products from institutions is still growing despite the falling market. In 2020, only 6% of financial advisors say they are allocating client funds to crypto. That number has increased by 50% year-on-year to 9% in 2021. By this year, the ratio is expected to increase by 70%, which means 16% of financial advisors allocate assets. of customers into crypto products.

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