Market Deep Dive: Economic data, Binance FUD, and the Sam-Bankman Fried arrest

Economic data, Binance FUD, and the Sam-Bankman Fried arrest headlined this week.

US CPI dropped YoY and MoM.

On Tuesday, the US CPI figures were released, which are the last of this year.

  • Core CPI YoY at 6% (consensus 6.1%; previous 6.3%)
  • CPI YoY at 7.1% (consensus 7.3%; previous 7.7%)
  • Core CPI MoM at 0.2% (consensus 0.3%; previous 0.3%)
  • CPI MoM at 0.1% (consensus 0.3%; previous 0.4%)

The largest downward contribution to the change from October to November came from energy, used cars and trucks, and airline fares. The largest upward contribution came from apparel, groceries, and communication.

BTC$ was up 5.5% on the day and broke the 18.3k mark on Wednesday, before dropping at the FOMC meeting.

The Fed raised interest rates by the expected 0.5%, but the markets reacted negatively to Jerome Powell’s hawkish comments. Here’s what he had to say:

  • The labour market remains extremely tight
  • A restrictive policy stance is likely needed for some time
  • There is a substantial need for more evidence of lower inflation
  • There will not be rate cuts until inflation is confidently moving towards 2%

The rate hike on February 1 now has a 73% probability of a 25 bps increase; March 22nd favours another 25 bps, while the prediction for May is currently that there will be no hike at all.

SBF was arrested in the Bahamas and charged with eight federal indictments. These include wire fraud, securities fraud, money laundering, and more.

On the same day, the new FTX CEO John Ray testified before the House Financial Services Committee, saying FTX committed “old fashioned embezzlement”.

Binance FUD emerged last week causing some panic. On December 11 it was reported that multiple altcoins were contra traded because API keys had been stolen or leaked. Additionally, a known crypto Twitter investor’s account was blocked for comments against CZ and the exchange. A total of $3bn worth of ETH and ERC20 tokens were withdrawn by December 13. According to glassnode, 58,174 BTC were withdrawn from Binance by December 13, the largest 24h outflow ever seen.

It seems like most exchanges will be put through a stress test, which is healthy for the ecosystem to progress. Currently, I do not see how Binance could have a big hole like FTX had, as there is no Binance equivalent of Alameda to lose customer funds that we know of … at least for now.

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