Billionaire venture capitalist Chamath Palihapitiya believes that the Federal Reserve did the worst thing possible by raising interest rates by 25 basis points amid the crisis in the US financial system.

In a new episode of the All-In Podcast, Palihapitiya says that the Fed should have hiked interest rates by 50 basis points, which he notes might trigger panic in the short term but would have eventually exposed what’s fundamentally broken in the system.

According to the venture capitalist, the Fed can deal with the chaos that comes from imposing higher interest rates, but they don’t have the appropriate tools that can handle inflation running amok.

“I think they should have raised 50 [basis points]. It would have created a little bit more chaos in the short term, but it would have set us up to understand what was fundamentally broken and still give the Federal Reserve the ability to use their balance sheet and use liquidity in the future to solve the problem. 

They took the worst option, which is neither did they cut nor did they raise enough… I think it’s high time that we acknowledge that we have a sticky inflation problem whose back we have to break. We’ve known since the Volker era what we need to do to do that, which is you need to get interest rates to be greater than terminal inflation, which means 5% Fed funds rate is insufficient. So we’re going to need to see a print of 5.5%, 5.75%. 

That’s when you’re going to have enough contraction, and then the Fed can come back with liquidity.”

Currently, the Fed funds rate stands at 4.5% to 4.75%. Palihapitiya says that the Fed’s ambivalence to take interest rates higher could actually hurt the economy.

“But if they don’t take these steps, we’re going to be in this very choppy neither here, neither there situation. And I think that is what causes the real damage because it’s the corrosive effects of uncertainty and what that does to lending, to risk taking, and I think that’s really bad for the economy.”

#Fed #Binance #crypto2023 #koinmilyoner #BTC

Breaking News: The Federal Reserve has increased the benchmark interest rate by 25 basis points during today's Federal Open Market Committee (FOMC) meeting. This decision marks a significant shift in the monetary policy of the United States, as the Fed seeks to balance economic growth with inflation concerns. The move is expected to have far-reaching implications for businesses, investors, and consumers alike. Stay tuned for further updates and analysis on this developing story.

#Fed #fomc #coingabbar #crypto2023 #crypto

Nasdaq registered with the NYDFS for a limited-purpose trust company charter, which is set to operate its crypto custody business.

Nasdaq would join big finance companies like Fidelity and BNY Mellon to safekeep crypto assets starting with Bitcoin and Ethereum.

The stock exchange's announcement came a day after the SEC issued an alert against investing in crypto assets.

Nasdaq will be the newest major financial firm to enter the crypto space to try its hand at the market. While most investors and analysts look at it as a positive since it represents the involvement of institutional investors, some see it as a threat to what cryptocurrencies like Bitcoin and Ethereum stand for.

Nasdaq takes on crypto

Nasdaq announced that the stock exchange company would be launching its digital asset custodial services by the second quarter of this year.

The firm is pushing through the necessary regulatory approvals, applying to the New York Department of Financial Services for a limited-purpose trust company charter. This charter would serve as the overseer of the custody services business.

With this, Nasdaq would be joining the likes of Fidelity and BNY Mellon, which have been offering custodial services for cryptocurrencies for a while now. The recent rather violent conditions of the crypto market have concerned investors and regulators alike, and the arrival of major financial institutions for safekeeping could reinstate that confidence.

With firms like Nasdaq serving as middlemen to safekeep investors' crypto assets they could be held accountable in the event that something goes wrong in the crypto market.

The collapse of FTX and Terra, in addition to multiple other companies going bankrupt over the last year, could be the leading cause of investors potentially turning to traditional financial companies.

But at the same time, this would take away a critical aspect of what crypto was born for. The crypto space has been building itself to stand as an independent market over the last couple of years. To further strengthen the trustlessness (decentralization) that comes with the crypto market, self-custodial wallets were developed.

However, due to the crypto market still being in its infancy compared to the financial markets, most investors would turn to traditional financial firms during crisis events.

This is also because the crypto market lacks proper regulation and an overseeing body that could prevent situations like FTX and maintain investors' confidence to the point where people would not depend on firms like Nasdaq to safekeep their investments.

SEC issues alert for investors

Earlier this week, the Securities and Exchange Commission (SEC) took on the crypto market and advised investors to practice caution before entering the space.

The regulatory body issued a bulletin saying that companies offering digital asset investments or services may not be complying with the existing securities laws. 

The commission even warned investors against having absolute faith in Proof of Reserves reports as they do not assure whether or not entities hold sufficient assets as they claim. Alerts as such would certainly push people against investing in the crypto space, and even if they do, they might turn to Nasdaq and other companies' custodial services to protect their investment.

#Fed #Binance #BTC #ETH #koinmilyoner

Polygon Labs has recently made a major announcement that is set to impact the Ethereum network’s future positively. The protocol has launched Polygon zero-knowledge proof Ethereum Virtual Machine (zkEVM) on mainnet Beta, a permissionless and public network allowing users to transact and build. 

According to the announcement, to further support the protocol’s development, Polygon zkEVM is now completely open-source. With this launch, Polygon is allegedly helping to pave the way for the next chapter of Ethereum’s development and offering developers and users a new tool for building decentralized applications. 

What Are The Benefits Of Polygons’s New zkEVM?

The Polygon zkEVM is a zero-knowledge proof (ZPK) scaling solution developed by the same protocol, designed to enable faster and cheaper transactions on Ethereum’s network. The public testnets for zkEVM have established it as a leader among Ethereum Virtual Machine (EVM) equivalent ZK scaling solutions. 

One of the key benefits of zkEVM is its use of zero-knowledge proofs, which ensures security and reduces gas fees. Another win for users is that zero-knowledge proofs enable transaction verifications without revealing sensitive information, making them highly secure. 

Furthermore, Polygon’s zkEVM is designed to be fully compatible with the EVM, so developers can easily deploy existing Ethereum smart contracts on the network, facilitating developers to migrate their existing applications to zkEVM. 

Additionally, the zkEVM is designed to improve the scalability of Ethereum, allowing faster and more efficient transactions with lower fees for developers and users of the protocol’s new feature. 

Polygon Takes Precautions Against Potential Risks of zkEVM Mainnet Beta Launch

According to the announcement, the protocol refers to the risks of using zkEVM Mainnet Beta. While the launch of the mainnet is a significant development for the protocol, undetected bugs can always disrupt the network’s stability. 

To address these potential risks, Polygon Labs has outlined “stringent” security measures, which will include the establishment of a temporary security council, which will be responsible for overseeing the network’s security and addressing any issues-

The security council will comprise various companies and organizations in the blockchain industry. Moreover, Polygon will implement a bug bounty program, which is intended to incentivize researchers and developers to identify and report any bugs or vulnerabilities that they discover in the Polygon zkEVM Mainnet Beta. 

With the risks and potential vulnerabilities, the established bug bounty program will have rewards of up to $1,000,000 being offered for documenting critical vulnerabilities, according to the protocol. 

Despite the positive development of the new Polygon feature, the protocol’s native token, MATIC, has not responded positively to the announcement. Currently, MATIC is trading at $1.0462, indicating a decline of over 5% in the last 24 hours.

However, the launch of these new developments has been met with positive reception from the cryptocurrency community, which could have a positive impact on MATIC’s price in the long term.

#matic #polygon #koinmilyoner #fud #Fed

First Citizens BancShares, the parent company of First Citizens Bank, has made a significant move in the world of banking by agreeing to acquire Silicon Valley Bank (SVB). 

The Federal Deposit Insurance Corporation (FDIC) confirmed the deal in a statement on Monday, as reported by Bloomberg.

With a number of key crypto companies relying on SVB prior to its downfall, what impact will the acquisition by First Citizens BancShares have on the future of the crypto industry?

First Citizens Acquisition Of SVB: Details

After SVB experienced a run on deposits, leading to insolvency, the FDIC took control of the bank weeks ago. As part of the deal, First Citizens BancShares has agreed to purchase approximately $72 billion in assets from Silicon Valley Bank at a discounted price of $16.5 billion.

The FDIC will retain control of roughly $90 billion in securities and other assets of the California-based bank.

The FDIC will also receive equity appreciation rights in First Citizens BancShares, which could potentially be worth up to $500 million. The 17 former branches of Silicon Valley Bank will now operate as First Citizens Bank.

The failure of Silicon Valley Bank is expected to result in a loss of around $20 billion to the Deposit Insurance Fund, according to the regulator.

What This Move Means For Crypto

With the acquisition of SVB by First Citizens BancShares, there are concerns about how this move will impact the crypto market.

SVB has played a crucial role in providing banking services to some of the biggest crypto companies in the world, including Circle Financial.

Following Circle’s announcement that $3.3 billion of its deposits were being held at SVB, the value of its USDC stablecoin dropped below its $1 peg for a brief period.

The acquisition raises questions about whether the bank’s crypto services will continue, and if so, how they may change under new ownership.

While First Citizens BancShares has not publicly commented on the matter, industry experts believe that the acquisition may lead to some changes in the bank’s approach to serving the crypto industry.

#SVB #BTC #koinmilyoner #Fed #GPT-4

Ethereum options traders are slightly bearish amid uncertainty about the Shanghai upgrade and the ETH token unlock. 

Co-founder of Ethereum, Joseph Lubin, believes that it is extremely unlikely for Ethereum to be classified as a security. 

Ethereum price holds steady at the $1,700 level with rising market interest in the altcoin. 

Ethereum, the second-largest altcoin by market capitalization, is holding steady above the $1,700 level despite slight bearish sentiment among options traders. Analysts have noted a rise in open interest in Ethereum, as co-founder Lubin assures the ETH community that the altcoin is not a security. 

Ethereum options traders turn bearish on the altcoin

Ethereum options traders turned slightly beartish while Bitcoin trader sentiment leaned towards neutral ahead of the quarterly settlement. Based on data from options intelligence tracker Blofin Academy, the uncertainty surrounding the Shanghai upgrade scheduled for April and the limited hedging attributes of ETH compared to BTC, are the drivers of the bearish sentiment. 

Despite bearish sentiment among options traders, there is a spike in interest among crypto market participants. Ethereum Binance futures Open Interest hit a level previously seen during the collapse of Three Arrows Capital (3AC) in July 2022. Ethereum price was at $1,100 at the time. 

The above chart shows the open interest in Ethereum has hit levels previously seen during the 3AC collapse, and the price is holding steady above the $1,700 level. 

Ethereum co-founder assures holders ETH is not a security

Ethereum co-founder, Joseph Lubin, responded to critics that argue ETH is a security. Lubin stated that it is unlikely that the US financial regulator, the Securities and Exchange Commission (SEC), will classify Ethereum as a security. 

Lubin was quoted as saying:

I don’t think there’s any point to speculate on something that is extremely unlikely.

US regulators have differing opinions on whether the altcoin should be classified as a security. While Gary Gensler, chairman of the SEC believes ETH is a security, the chairman of the Commodity Futures Trading Commission (CFTC) has stated that ETH is a commodity. Despite regulators remaining divided on the issue, Lubin assures ETH holders that the asset is not likely to be classified as a security. 

#Ethereum #Binance #Fed #BTC #koinmilyoner

Bitcoin (BTC), the world's largest cryptocurrency, has gained popularity and experienced a spike in recent days, hitting over $28,000, a 22 percent increase this month and a 65 percent increase since the beginning of the year. Meanwhile, Ethereum (ETH), the second largest cryptocurrency, has been strongly bid around the $1,750 .

The current price of Bitcoin is $27,800, with a 24-hour trading volume of $14.3 billion. Bitcoin has increased by 1.5% in the past 24 hours. 

According to technical analysis, the BTC/USD pair is exhibiting a bullish trend at present. However, it could face some resistance when it reaches the $28,950 level.

If Bitcoin succeeds in surpassing the resistance level of $28,950, it could potentially drive its value higher to $29,200 or even $30,700.

However, if a bearish trend emerges, the support levels of around $26,600 and $25,200 are expected to offer significant support.

At present, the live Ethereum price stands at $1,760, with a 24-hour trading volume of $7.1 billion. In the last 24 hours, Ethereum has recorded a gain of 1%. Presently, Ethereum is facing difficulty in surpassing the resistance level of $1,800 and is trading consistently near the support zone of $1,700.

If the ETH/USD pair successfully breaches the $1,800 level, it is anticipated to face resistance at the $1,900 .

It is anticipated that support levels for the ETH/USD pair will be found at either $1,700 or $1,620.

#BTC #ETH #koinmilyoner #Fed #GPT-4

The financial world has been in turmoil following the collapse of Silicon Valley Bank (SVB), one of the three major banks serving the crypto industry alongside Silvergate and Signature Bank.

This unprecedented event has affected not only the banking sector but also the crypto market, leading to significant changes in industry operations and government actions.

In this article, we will discuss the implications of the SVB Bank collapse, its impact on the crypto market and the Federal Reserve’s delicate balancing act to maintain financial stability while combating inflation.

SVB Bank collapse and its impact on crypto

The SVB Bank collapse has sent shockwaves throughout the financial industry, particularly in the crypto space. Major crypto platforms, such as Coinbase and Binance, temporarily suspended USDC-to-USD conversions and the auto-conversion of USDC to BUSD, respectively.

Other projects, like AAVE, BENQI and Trader Joe, took measures to protect their platforms by freezing or pausing USDC and related markets. Companies with ties to SVB, including Circle, Roku, BlockFi and Roblox, also faced significant challenges.

Silvergate and Signature Bank – two of the main banks for crypto companies – have experienced their share of troubles as well. Silvergate announced it would be winding down operations and liquidating its bank, while Signature Bank was seized by banking regulators.

With SVB having a large number of crypto startups and VCs as customers, the failure of this crypto banking trifecta has rippled into the stablecoin market.

The federal government stepped in on Sunday to guarantee all deposits for SVB and Signature depositors, adding confidence and sparking a small rally in the crypto markets.

However, this event has highlighted the vulnerability of stablecoins, as USDC temporarily lost its peg and other stablecoins like DAI experienced fluctuations in value.

Industry response and actions taken

The industry’s response to the SVB collapse has been swift and decisive, with companies, regulators and government officials working together to stabilize the situation.

The Federal Deposit Insurance Corp. (FDIC) facilitated the resolution of SVB Bank, and the Federal Reserve announced the Bank Term Funding Program (BTFP) to support American businesses and households.

The Fed’s delicate balancing act

The Federal Reserve faces the challenge of fighting inflation while avoiding a financial crisis following the SVB Bank collapse. The central bank has announced the BTFP, providing one-year loans to banks, credit unions and other financial institutions that offer collateral.

This program allows the Fed to fulfill its role as the lender of last resort, ensuring the stability of the banking sector while continuing to combat inflation.

Conclusion

The SVB Bank collapse has disrupted the financial landscape, leading to significant changes in the crypto market and the banking sector. The industry’s response to these challenges has been swift, with companies, regulators and government officials working together to stabilize the situation.

As the Federal Reserve navigates this delicate balancing act, it remains to be seen how the long-term impact of the SVB collapse will shape the financial world.

Nonetheless, this event underscores the importance of vigilance and adaptability in an ever-evolving financial landscape.

The crypto industry will have to adapt to the changes brought on by the collapse of these major banks, and new players may emerge to fill the void left by Silvergate, Signature Bank and SVB.

#SVB #koinmilyoner #GPT-4 #Fed #koinmilyoner

After cryptocurrencies began their climb on Friday, surpassing $27,000 for the second time this week, Bitcoin price has regained nearly all of its losses from 2022.

In recent days, the cryptocurrency markets have escaped the grip of bears, with the majority of tokens breaking out of upward consolidation. At the time of writing, Bitcoin was halfway its $28K target – its highest since nine months ago – trading at $27,519, an increase of 36% over the previous week, according to statistics from crypto market tracker Coingeckos.

Bitcoin Price Shows Resilience

The price of Bitcoin rose 22% in the last two weeks and 13% in the last 30 days, according to the most recent data. The rise has raised the worldwide crypto market capitalization by over 5.4%. While some market experts say this to be a short-term bounce, a more significant price move appears imminent.

The overnight data from the Federal Reserve’s balance sheet indicating the injection of about $300 billion into the economy as part of the reaction to the banking crisis acted as a spark for new gains.

Bitcoin Emerges Victorious From Banking Crisis

In the wake of last week’s banking crisis, investors have applauded the resilience of cryptocurrency prices. It began with the closings of Silicon Valley Bank and Signature Bank late on Sunday, but throughout the week the spotlight was on First Republic Bank. Some major U.S. financial institutions came to its help late Thursday, depositing a total of $30 billion.

In light of the recent instability in the financial sector, many have stated that Bitcoin’s narrative is shifting. Inflation and Federal Reserve rate hikes continue to have a significant impact on the price movements of the cryptocurrency.

The bitcoin market may have mixed effects from the Fed’s rate move. A rate hike can raise borrowing costs, which can reduce demand for cryptocurrencies as investors seek safer and more reliable investments.

A rate hike can result in a boost of the U.S. dollar, which can render cryptocurrencies more expensive for foreign investors. Alternatively, as interest rates rise in the traditional financial markets, some investors may turn to cryptocurrencies as an alternate investment choice.

Crypto: Cushion Against Inflation

This is because virtual currencies are frequently viewed as a hedge against inflation and an alternative form of asset storage. In addition, some analysts assert that a rate hike can raise the appetite for cryptocurrencies as consumers strive to diversify their investments and safeguard against prospective economic downturns.

Ultimately, the influence of a Federal Reserve rate hike on the cryptocurrency industry is complex and can depend on a number of variables, such as the precise economic circumstances at the point of the rate hike and the investor sentiment towards cryptocurrencies.

The next Bitcoin pricepoint is eagerly awaited as numerous investors want to increase their portfolio returns. This expected price corresponds with a 2023–2030 expert forecast for Bitcoin.

#bitcoin #BTC #Fed #Binance #koinmilyoner