🥂 Good morning, today is Thursday, Dec. 15, 2022.

TL;DR

🔹 Bitcoin and Ether continued to exhibit a strong correlation with TradFi — erasing most gains on Wednesday as soon as the Fed announced its interest rate hike decision and released the subsequent FOMC statement. US equities concluded a two-day rally; global equity futures point to a bearish Thursday.

🔹 Following the Fed, the ECB and Bank of England will announce their decisions Thursday. Although the immediate effects will not be as disruptive as the FOMC, the data from the Eurozone and the United Kingdom will help smart money gauge where to allocate their assets in 2023.

🔹 The topic of the Day: To a Few Crypto Users, Shame Isn’t a Word; Money Is Everything

🔹 Happenings of the Week: CZ warned colleagues that the proverbial “crypto winter” isn’t over; MetaMask and PayPal join forces to offer crypto onramp to select users; WisdomTree launches nine new blockchain-enabled funds; Australia plans to establish a framework for licensing and regulating crypto service providers in 2023…

As of Dec. 14 22:42 UTC,

⚡️ Bitcoin (BTC) 24-Hour Change: 17,815 (+0.31%)

⚡️ Ether (ETH) 24-Hour Change: 1,311 (-0.57%)

FOMC: Unemployment Forecasts Up, Growth Stalls, Interest Rate Hikes Must Prolong

Yesterday’s US interest rate hike and the subsequent FOMC statement have put the world back to uncertain times.

US equities concluded a two-day rally after Fed Chair Jerome Powell reiterated his hawkish stance, as expected, which signaled borrowing costs will head higher than investors expect next year. Bitcoin and Ether continued to exhibit a strong correlation with TradFi — erasing most gains on Wednesday as soon as the Fed announced its interest rate hike decision at 19:00 UTC.

The Federal Open Market Committee raised its benchmark rate by 50 basis points to a 4.25% to 4.5% target range. Policymakers projected rates would end next year at 5.1%, according to their median forecast, before being cut to 4.1% in 2024 — a higher level than previously indicated.

The FOMC statement retained language saying “ongoing” hikes will be appropriate to reach a “sufficiently restrictive” stance that returns inflation to 2% over time. Meanwhile, the unemployment rate is seen rising to 4.6% at end of 2023 and holding there in 2024, compared with the current 3.7% level; GDP growth is seen at 0.5% in 2023, down from 1.2% in September.

In Powell’s own words, “I wouldn’t see us considering rate cuts until the committee is confident that inflation is moving down to 2% in a sustained way. Restoring price stability will likely require maintaining a restrictive policy stance for some time.”

What this means is slower growth forecasts, yet more hikes which is not a great combination for markets, but is exactly what the Fed would like to see to bring inflation down. The implied message was enough to send global equities lower and lift US Treasury yields higher briefly.

Following the Fed, the ECB and Bank of England will announce their decisions Thursday.

P.S. If you’d like us to cover any specific macro data, or to expand upon technical analysis on your favorite coin, feel free to drop a message in our Reddit community. - Peter L.

💡 Today's Markets at Dec. 14 22:34 UTC

BTC +0.52%; Ether -0.45%.

Asia: Japan +0.72%; Hong Kong +0.39%; China +0.01%; India +0.28%.

Europe: London -0.21%; Paris -0.21%; Frankfurt -0.26%.

US Spot Indices: Dow -0.42%; S&P -0.60%; Nasdaq -0.76%.

US Index Futures: Dow -0.43%; S&P -0.60%; Nasdaq -0.75%.

US Two-year Treasury down 1bps at 4.216%.

US Ten-year Treasury down 3bps at 3.479%.

UK Ten-year Government up 2bps at 3.321%.

US Dollar Index -0.41% at 103.19.

FX in 24hrs: GBP: +0.43%; EUR: +0.49%; JPY: +0.15%; CNY: -0.10%.

Gold -0.18% at 1,806; Brent Crude 0.00% at 80.68.

🧠 Catalysts this week

• Monday: UK GDP, Australia Westpac Consumer Confidence Index
• Tuesday: Australia NAB Business Confidence, UK Unemployment Claimant Count, Germany ZEW Economic Sentiment Index, US Inflation Rate, Japan Tankan Large Manufacturers Index
• Wednesday: UK Inflation Rate, UK PPI, US Fed Interest Rate Decision, US FOMC Projections, US Fed Press Conference, Japan Balance of Trade
• Thursday: China Industrial Production, US Retail Sales, US Jobless Claims, ECB Press Conference
• Friday: UK GfK Consumer Confidence, UK Retail Sales

🏦 BTC

BTC Weekly timeframe:

• Major Level: 19,845 (Monthly High of Nov. 2020)
• Closest support zone: 17,700 - 17,640
• Key resistance zone: 17,815 - 18,025

Analysis as of Dec. 15 - Dec. 18 Session.

Note: Will update as we approach Friday and the weekend. The volatile sessions of the past two days have disrupted the price enough to create a new short-term bullish outlook — but I have doubts about whether it will be sustained.

BTC Weekly Resistance zones

1. 17,815 - 18,025
2. 18,245 - 18,455
3. 18,755 - 18,990

BTC Weekly Support zones

1. 17,700 - 17,640
2. 17,450 - 17,175
3. 17,090 - 16,875

BTC Daily Timeframe:

• Closest support zone: 17,700 - 17,640
• Closest resistance zone: 17,805 - 17,875
• Key Level: 18,432 (Weekly Close Between Nov. 16 - 23, 2020)

Dec. 14 21:58 UTC Update:

Bitcoin (BTC) was trading at $17,833, or +0.39% in a 24hr period.

BTC Daily Resistance zones

1. 17,805 - 17,875
2. 17,955 - 18,025
3. 18,090 - 18,215

BTC Daily Support zones

1. 17,700 - 17,640
2. 17,545 - 17,450
3. 17,370 - 17,205

🌐 ETH

Weekly Timeframe

• Major Level - 1,470 (Monthly High of Jan. 2021)
• Closest support zone: 1,315 - 1,280
• Key resistance zone: 1,315 - 1,330

Analysis as of Dec. 15 - Dec. 18 Session.

Note: Unlike BTC, Ether is progressing upward in an orderly fashion. But similarly to its BTC counterpart, the recent volatile sessions have created a short-term bullish outlook that remains to be seen if it’s sustainable. Will update as we approach Friday.

ETH Weekly Resistance zones

1. 1,315 - 1,330
2. 1,345 - 1,380
3. 1,390 - 1,415

ETH Weekly Support zones

1. 1,315 - 1,280
2. 1,265 - 1,240
3. 1,220 - 1,180

ETH Daily Timeframe

• Closest support zone: 1,310 - 1,300
• Closest resistance zone: 1,280 - 1,300
• Key Level: 1,347 (Weekly high from Jan. 04, 2021 - Jan. 11, 2021)

Dec. 14 22:07 UTC Update:

ETH was trading at $1,309, or +0.58% in a 24hr period.

ETH Daily Resistance zones

1. 1,325 - 1,330
2. 1,345 - 1,370
3. 1,380 - 1,390

ETH Daily Support zones

1. 1,310 - 1,300
2. 1,280 - 1,265
3. 1,245 - 1,240

📌 Today's topic: To a Few Crypto Users, Shame Isn’t a Word; Money Is Everything

What’s happening: Compound DAO is among eight defendants listed in a case brought by three complainants who claim they suffered damages after buying COMP tokens, which they allege are unlicensed securities sold by the defendants, according to a recently filed lawsuit that is seeking class-action status.

Why it matters: According to the court filing, Douglas bought $75 worth of COMP tokens when it was trading at $130 in January 2022. The other plaintiffs bought $2 and $3 worth of COMP tokens, respectively. Houghton and Franklin also earned additional COMP tokens as rewards for watching crypto adverts on their Coinbase accounts. They made $9 each for doing so, but these coins are now worth $1 apiece. Together, the named plaintiffs in the suit only held $98 worth of COMP tokens as a cost basis.

What they’re saying: The plaintiffs argued that the price of COMP has since collapsed and that the defendants are to blame for making false and misleading statements about the prospect of profiting from holding COMP tokens. They also want the court to order Compound DAO and the other defendants to stop selling these tokens, pay damages and cover the plaintiffs' legal fees.

The bottom line: Guilty until proven — this applies to both sides. But doesn’t it seem fishy that Douglas, Houghton, and Franklin are suing for less than $100?

Think about this: Who would profit the most if Compound were deemed a security?

👁 Happenings of The Week (Dec. 10 - Dec. 14):

📣 Notables

🔹 Congressional committee confirms SBF as FTX hearing witness on Tuesday, Dec. 13.

🔸 12.10: U.S. prosecutors are reportedly laying the groundwork for a potential fraud case against SBF. In other news, the former Alameda Research head Caroline Ellison hired a former crypto regulator at the SEC to represent her in an ongoing federal probe.

🔸 12.12: Bankman-Fried 'unwilling' to accept subpoena, escalating Senate standoff.

🔸 12.13: SBF was arrested in the Bahamas. New FTX CEO John Ray III told lawmakers that there were no distinctions between FTX, Alameda Research, and other entities which filed for bankruptcy protection last month.

🔸 12.14: New FTX CEO John Ray III alleged that SBF, Gary Wang, and the Bahamian government have colluded to shield hundreds of millions of dollars worth of assets from U.S. court proceedings.

🔹 Chinese authorities have arrested 63 people in association with a massive money laundering scheme that allegedly laundered 12 billion yuan ($1.7 billion).

🔹 The European Parliament’s crypto ally Eva Kaili was arrested following corruption allegations. She has played a major role in shaping policy on crypto assets and blockchain since 2018.

🔸 The Parliament voted to terminate crypto-friendly vice-president Eva Kaili’s term of office by a double majority.

🔹 The UK’s economic chief wants more investment in crypto businesses in the country and endorses work on a digital pound. The 30-point “Edinburgh Reforms” released on Friday morning is looking to vamp up the UK’s financial sector.

🔸 The Bank of England is seeking a proof of concept for a sample wallet for a CBDC and will take applications through Dec. 23. The budget range for the initial five-month contract is 200,000 pounds ($245,200).

🔹 Financial regulators such as the Korea Financial Services Commission and the Financial Intelligence Unit (FIU) are reviewing a proposal to include "direct approval by the regulator for tokens to go live on domestic crypto exchanges" in the Basic Act on Virtual Assets.

🔹 Argentina has established a National Blockchain Committee to implement a national blockchain adoption strategy. The Commission will be responsible for "acting as an interlocutor in the local blockchain ecosystem, improving the interoperability of blockchain technology", improving transparency in the investment of Argentine public funds, avoiding the forgery of identity documents, identifying other documents issued by institutions, etc.

🔹 Canada’s financial watchdog is enforcing stricter requirements for crypto firms following the collapse of FTX crypto exchange last month. Measures include separating client and proprietary business assets, ensuring client assets are held with an “appropriate custodian,” and prohibiting offering margin or leverage for Canadian users.

🔹 The Financial Stability Board reportedly has an operational plan for rolling out steps to regulate the crypto sector early next year. The collapse of FTX adds urgency to address crypto supervision, including decentralized finance.

🔹 Brazil Central Bank Plans to Launch a CBDC in 2024. In March the country selected nine partners to help it develop a digital currency. When the CBDC is issued, Brazil will join the Bahamas, Nigeria, Eastern Caribbean and Jamaica as nations that have already issued their own CBDCs.

🔹 OECD (Organisation for Economic Co-operation and Development) calls for ‘urgent policy action’ following a series of crypto firm implosions. While crypto firm failures didn’t affect traditional finance much, the OECD worries this may not be the case in the future if the digital asset industry grows.

🔹 Senators Elizabeth Warren and Roger Marshall are working together on legislation to tighten AML (anti-money laundering) rules around digital assets. The bill is unlikely to pass before this Congress ends in early January, but it could help shape the debate over how to further apply AML laws to digital assets and push regulators to finalize rules.

🔹 Australia plans to establish a framework for licensing and regulating crypto service providers in 2023. It aims to define which digital assets should be subject to financial services laws and what rules are appropriate to safeguard consumers.

📣 Dec. 14

🔹 Solana’s top NFT marketplace Magic Eden will reward users with discounts and NFTs based on their activity on the platform. The move comes after several changes to bolster user engagement on the platform, such as a reinstated creator royalty system.

🔹 MetaMask and PayPal join forces to offer crypto onramp to select users. Users can access the MetaMask application to log into their PayPal accounts and purchase ETH to be sent back to the connected web3 wallet.

🔹 WisdomTree launches nine new blockchain-enabled funds. These new additions bring the firm’s total digital funds to 10, and come ahead of WisdomTree’s digital wallet launch next year.

🔹 Maple Finance released version 2.0 a week after a $36 million default on the platform. The version update focuses on diversifying borrowers and improving risk management parameters.

🔹 Binance CEO CZ (Changpeng Zhao) warned colleagues that the proverbial “crypto winter” isn’t over, and the months ahead won’t be easy. CZ blamed the collapse of high-profile competitor FTX for adding “a lot of extra scrutinies and tough questions.”

🔹 Atlas Trading founders targeted by SEC for alleged fraud via Twitter and Discord. The SEC says the Atlas Trading founders and their team colluded to manipulate stocks and earned about $100 million. Crypto and NFT trading are also discussed on the Atlas Discord server.

📣 Dec. 13

🔹 Ex-FTX CEO Sam Bankman-Fried Arrested in the Bahamas.

🔹 Binance has resumed processing withdrawal requests of the USD Coin (USDC) stablecoin.

🔹 Tether announced that it's assisting crypto exchange Binance with a “chain swap,” which involves converting 3 billion USDT to the Ethereum network from the Tron network.

🔹 Tether vows to remove secured loans amid rush to show solvency.

🔹 Do Kwon, the founder of Terra, is currently stranded in Serbia, and the South Korean Ministry of Justice is cooperating with the Serbian government in an investigation to see if there is a special facilitator within Serbia.

🔹 A new report from JPMorgan Chase & Co. concludes that the U.S. crypto market exhibits characteristics of “herd-like behavior.”

🔹 A federal judge ordered the Commodities Future Trading Commission (CFTC) to serve the decentralized trading platform bZeroX's founders Tom Bean and Kyle Kistner as part of an ongoing lawsuit against Ooki DAO.

🔹 MakerDAO is set to execute a bundle of eight governance actions for the protocol.

🔹 Cobo, MetaMask Institutional and Gnosis DAO teamed up to create “Evolution,” a Soulbound tokens (SBTs) project.

📣 Dec. 12

🔹 Twitter Blue sub_script_ion service will be relaunched on Monday at a higher cost for Apple users. The service is priced at $8/month on the web and $11/month through the iOS app.

🔹 Glassnode data shows that the number of addresses holding more than 1 Bitcoin is at a record high, and the percentage of Bitcoin supply that has not been active for more than 5 years is at a record high of 26.349%.

🔹 China Taiping Insurance launched the first national digital currency account fund loss insurance product.

🔹 Arthur Hayes: Abuse of leverage was the cause of the liquidation, and the FTX collapse may have caused the cryptocurrency to hit a cyclical bottom. 🔹 Decentralized automotive insight network DIMO launches mainnet.

🔹 Illuvium releases Overworld as it attempts to bring AAA quality to web3 gaming.

🔹 Bitcoin Group agrees to buy centuries-old German bank for over 14 million EUR.

🔹 The ENS DAO is voting to choose stewards for three working groups.

🔹 Tron-backed USDD loses dollar parity as stablecoin dips below $0.97.

🔹 According to a Reuters report, U.S. prosecutors looking into crypto exchange Binance are split on how to move forward with the case. Binance and some of its executives are under scrutiny for possible money laundering and criminal sanctions violations.

📣 Dec. 11

🔹 According to accounting and financial specialists consulted by The Wall Street Journal, Binance's efforts to improve the transparency of its reserves also exposed red flags in the crypto exchange's finances, citing the report released by the audit firm Mazars lacks information related to the quality of internal controls and how Binance's systems liquidate assets to cover margin loans.

📣 Dec. 10

🔹 Grayscale Investments said the SEC has filed its first legal brief over the rejection of its application for a spot Bitcoin exchange-traded fund. ****In the 73-page response brief, the SEC argued its rejection was “reasonable, reasonably explained, supported by substantial evidence.” The SEC added futures and spot-based Bitcoin funds are "fundamentally different products.

📣 This week’s fundraising activities include but are not limited to:

🔹 Blockchain-free decentralization platform Nillion raises $20 million led by Distributed Global.

🔹 Crypto insurance firm Evertas raises $14 million in a Series A round led by Polychain Capital.

🔹 Digital collectibles company Forum3 raised $10 million in seed funding led by Decasonic.

🔹 Web3 game Dogami raised a $7 million seed extension with investment from XAnge and Bpifrance.

🔹 Web3 intellectual property protocol Spaceport has raised $3.6 million in a pre-seed round co-led by Arca, Decasonic and Crit Ventures. Its first application Spaceport Core will enable creators to upload their works, convert the assets to be web3-compatible and then put that IP catalogue in front of brands to secure licensing deals and get contracts signed with royalties going back to the creator via the application.

🔹 Crypto startup Outdefine has raised $2.5 million in a seed round co-led by Jump Crypto and TCG Crypto.

🔹 One-stop shop for NFT trading has raised $1.65 million in a seed round co-led by Infinity Ventures Crypto and Spartan Group.

📣 This week’s on-chain criminal activities include but are not limited to:

🔹 Lending platform on Arbitrum — Lodestar Finance was exploited for about $6.5 million.

🔹 Polkadot Oracle OptionRoom was hacked and all assets in the deployer's wallet were stolen.