Good morning, today is Thursday, Nov. 10, 2022.

TL;DR

🔹 Cryptocurrencies seemed to get more bearish before bitcoin and ether staged a small rally. The cryptocurrency sector is now down to $856B market cap after seeing a 4-day losing streak.

🔹 The decline continued bitcoin's downward trend this week following the rapid unraveling of crypto exchange giant FTX, which suffered a liquidity crisis and was then jilted by would-be rescuer Binance, which the latter later refused.

🔹 BTC and ETH’s correlations with volatility decelerate. Situations are the same with the US dollar at -0.17 and -0.47%, respectively, implying high movements are slowly becoming the past.

🔹 The topic of the Day: CZ decided to abandon the acquisition. Will SBF go bankrupt?

🔹 Happenings of the Week:

• The biggest known whale is now the U.S. government who holds at least 214,000 BTC.
• Some miners ave reached shutdown coin prices based on a $0.06/kWh electricity rate and based on current mining difficulty.
• Sequoia Capital: The return on our investment in FTX has gone to zero.

💰 . . .

Bitcoin (BTC) 24-Hour Change: 18,293 (-11.46%)

Ether (ETH) 24-Hour Change: 1,617 (-16.35%)

On Thursday, crypto traders are still dealing with uncertainties surrounding FTX after Binance’s official rejection from the deal. US futures are up slightly ahead of US CPI data due for release at 13:30 UTC and global governments bonds are slightly down.

Binance bailed

• “I f---ed up,” Bankman-Fried told investors on the call, according to people with knowledge of the conversation. He said he would be “incredibly, unbelievably grateful” if investors could help.
• The Securities and Exchange Commission and the Commodity Futures Trading Commission are investigating whether the firm properly handled customer funds, as well as its relationship with other parts of Bankman-Fried’s crypto empire, including his trading house Alameda Research.
• Coinbase Chief Executive Officer Brian Armstrong said Tuesday in a Bloomberg TV interview that if the deal with Binance fell through, it would likely mean FTX customers would take losses.
• Binance said it was indeed backing out. CZ: “Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.”

4️⃣ . . .

Thursday

13:30 UTC

US Inflation Rate (Consumer Price Index)

Actual: ____ ; Consensus: 8.0%; Previous: 8.2%

October inflation data will offer clues on the path of Fed tightening. JPMorgan Chase & Co. analysts said a hot print could send US equities 6% lower in Thursday trade.

Since cryptocurrencies are in free-fall mode, US equities’ performance will affect the former’s selling and buying power, implying a larger downside movement ahead. Notably, the volatility index’s correlations with BTC and ETH, and perhaps somewhat to FTT, Alameda and FTX depending on how much Alameda and FTX have in their portfolios.

3️⃣ . . .

Wednesday

01:30 UTC

China Inflation Rate

Actual: 2.1% ; Consensus: 2.4%; Previous: 2.8%

• China's annual inflation dropped to 2.1% yoy in October 2022 from 2.8% in the prior month, compared with market consensus of 2.4%. This was the lowest figure since May, due to a slowdown in cost of both food and non-food.
• Official data showed that food inflation eased to 7.0% from September's 25- month peak (7.0% vs 8.8%), despite a further acceleration in pork prices.
• In addition, non-food inflation slowed to 1.1% from 1.5% in September, amid smaller increases in prices of both transport & communication (3.1% vs 4.5%) and health (0.5% vs 0.7%); and a decline in cost of housing (-0.2% vs 0.3%) with inflation unchanged for both clothing (at 0.5%) and education, culture (at 1.2%).
• China has set a target of CPI at around 3% for 2022, the same as in 2021. Core consumer prices, excluding the volatile prices of food and energy, rose 0.6%, the same pace as in September. On a monthly basis, consumer prices increased by 0.1% in October, compared with estimates and September's reading of 0.3%.

💡 . . .

Today's Markets

BTC +3.22%; Ether +6.87%.

Asia: Japan -1.07%; Hong Kong -1.86**%**; China -0.53%; India -0.75%.

Europe: London -0.01%; Paris -0.17%; Frankfurt -0.16%.

Futures at 02:00, Dow +0.13%; S&P +0.15%; Nasdaq +0.30%.

US Two-year Treasury Yield up 1bps at 4.595%.

US Ten-year Treasury Yield down 2bps flat at 4.071%.

UK Ten-year Government Bonds down 10bps at 3.445%.

US dollar Index -0.14% at 109.32.

FX: GBP: +0.38%; EUR: +0.17%; JPY: -0.19%; CNY: +0.28%.

Gold 0.15%; Brent Crude -2.84%.

Catalysts between Nov. 10 - Nov. 11:

• Thursday: US Inflation Rate (CPI)
• Friday: UK Q3 GDP, November Michigan Consumer Sentiment

🏦 . . .

🟠 BTC

BTC Weekly timeframe:

• Major Level: 13,965 (Monthly High of Jun. 2019)
• Closest support zone: 16,880 - 15,275
• Key resistance level: 17,450 - 18,755

Analysis as of Nov. 10 - Nov. 11 Session.

BTC Weekly Resistance zones

1. 17,450 - 18,755
2. 19,340 - 19,720

BTC Weekly Support zones

1. 16,880 - 15,275
2. 14,650 - 13,455

BTC Daily Timeframe:

• Closest support zone: 16,005 - 15,310
• Closest resistance zone: 16,690 - 17,450
• Key Level: 15,952 (Weekly Close Between Nov. 02 - 09, 2020)

Nov. 10 02:28 UTC Update:

bitcoin (BTC) was trading at $16,376, or -10.58% in a 24hr period.

BTC Daily Resistance zones

1. 16,690 - 17,450
2. 17,715 - 18,755

BTC Daily Support zones

1. 16,005 - 15,310
2. 14,375 - 13,700

🌐 . . .

🔵 ETH

Weekly Timeframe

• Major Level - 757 (Monthly High of Dec. 2020)
• Closest support zone: 1,150 - 1,100
• Key resistance zone: 1,275 - 1,415

Analysis as of Nov. 10 - Nov. 11 Session.

ETH Weekly Resistance zones

1. 1,275 - 1,415
2. 1,435 - 1,560
3. 1,500 - 2,090

ETH Weekly Support zones

1. 1,150 - 1,100
2. 1,060 - 990
3. 907 - 698

ETH Daily Timeframe

• Closest support zone: 1,150 - 1,100
• Closest resistance zone: 1,220 - 1,245
• Key Level: 1,346 (61.8% Weekly Fibonacci Retracement Level measured from Jul. 04 - Aug. 08)

Nov. 10 03:38 UTC Update:

ETH was trading at $1,179, or -10.24% in a 24hr period.

ETH Daily Resistance zones

1. 1,220 - 1,245
2. 1,300 - 1,325
3. 1,345 - 1,385

ETH Daily Support zones

1. 1,150 - 1,100
2. 1,010 - 975
3. 910 - 875

📌 . . .

📌 Today's topic: CZ decided to abandon the acquisition. Will FTX go bankrupt?

Binance tweeted that it has decided to abandon its potential acquisition of FTX.com based on the results of the company's due diligence and the latest news reports regarding the mishandling of customer funds and investigations by U.S. agencies.

Its initial hope was to support FTX's customers and provide liquidity, but the issues were beyond Binance control or ability to do so.

In addition, the U.S. Securities and Exchange Commission (SEC) and U.S. Department of Justice (DOJ) is investigating FTX, and staff from the two enforcement agencies were in close contact Wednesday, the Wall Street Journal reported, citing people familiar with the matter.

The DOJ is responsible for prosecuting criminal violations such as fraud, while the SEC is responsible for enforcing civil investor protection laws.

State regulators have previously been investigating whether FTX, as well as FTX.US, offered derivatives trading services to U.S. customers without registering with federal regulators.

SEC Chairman Gary Gensler said of the incident that the FTX collapse was part of a broader trend in cryptoassets, pointing to leverage, lack of disclosure, opacity, misappropriation of other people's funds and future trading.

FTX founder and CEO Sam Bankman-Fried told investors that without a cash infusion, the company would need to file for bankruptcy, Bloomberg News reported, citing people familiar with the matter.

SBF had told investors that FTX faced a funding shortfall of up to $8 billion before Binance announced it was abandoning its acquisition of a rival exchange, and that FTX was trying to raise money in bonds, stock or a combination of both.

In the latest news, the FTX website resumed after a short outage early this morning, now with a new warning saying "FTX is currently unable to process withdrawals and we strongly advise against depositing funds." The FTX Ventures website has not resumed after the outage, and the Alameda Research website shows "This site is currently private and requires a login to view.

Currently, most FTX legal and compliance staff have resigned, according to sources familiar with the matter. In addition, FTX employees have stated that they have been unable to contact SBF for several days. Employees are not getting information about what is happening inside FTX, but are learning about new developments from Twitter.

The lack of communication left employees angry and surprised, the source said.

Whenever a major player in the industry collapses, retail investors suffer losses. The crypto ecosystem is becoming more resilient over the past few years, and sooner or later, future abuses of user funds will be eliminated by the free market.

As the regulatory framework evolves and the industry becomes more decentralized, the ecosystem will become even stronger.

Do you think FTX will go bankrupt and what will be the last straw that breaks the camel's back?

👁️ . . .

Happenings of The Week (Nov. 06 - Nov. 10):

📣 Notables

🔹 Russia's central bank released a report aimed at integrating crypto assets into the financial system.

🔹 South Korea's political committee will discuss the amendment to the Basic Act on Digital Assets on November 15.

🔹 On November 7, European Central Bank President Christine Lagarde said that the European Commission will "soon" present legislative proposals on the digital euro.

🔹 RBI deputy governor: Stablecoin can be completely replaced by central bank digital currency.

🔹China's Hengqin Guangdong-Macao Deep Cooperation Zone jointly issued a notice on ten taxation measures to support the development of metaverse industry.

🔹 Sequoia Capital: The return on our investment in FTX has gone to zero. Sequoia Capital said that investing is a risky business, and some investments will have unexpectedly high returns, while others will have unexpected losses. Sequoia Capital does not take this responsibility lightly and has always conducted extensive research and thorough investigation on every investment it makes.

🔹 Bitcoin price has approached the coin price of mainstream mining machines such as Sleipnir M30S and Ant T19. According to F2pool data, with bitcoin falling to a position of approximately $16,000, the vast majority of miners, including the full Ant S17 series, Hornbill H8 Pro, and Hummingbird H9 Pro, have reached shutdown coin prices based on a $0.06/kWh electricity rate and based on current mining difficulty.

🔹The biggest known whale is now the U.S. government who holds at least 214,000 BTC. In addition to the 50,676.17 BTC seized from James Zhong by the U.S. Department of Justice (DOJ) last November, the U.S. government has acquired at least 163,370 BTC over the past two years, according to Crypto Briefing. As of today, the U.S. government owns at least more than 214,046 Bitcoins (about $4.43 billion), making it one of the largest bitcoin whales.

🔹Canada's Third Largest Pension Fund, Teachers, May Face Huge Investment Losses Due to FTX Incident. Canada's third-largest pension fund, Teachers, which participated in a $420 million funding round for FTX that closed at a $25 billion valuation in October 2021 and was listed first in the funding announcement, has declined to disclose the size of its investment, but noted that FTX was not included in its list of investments exceeding $200 million in its 2021 annual report. This is not the first blunder by a Canadian pension fund, following news in August that CDPQ, a Canadian pension fund, wrote off a $150 million bad debt on its investment in Celsius.

🔹Mitsubishi UFJ announces entry into the metaverse. Mitsubishi UFJ Financial Group, a leading global financial services group and one of Japan's largest banking institutions, recently announced plans to enter the metaverse with their upcoming digital platform partnership with ANA Holdings. According to forecast data, the metaverse platform called ANA Granwhale is expected to be operational in 2023 with a user base of about 38 million. The platform will allow players to roam in a 3D world through avatars and also interact with different stores and live in a digital world.

🔹Su Zhu, founder of Three Arrows Capital, resurfaced on Twitter after a long absence, saying that he was lost in the quiet life and the reconstruction of new goals, and was still unsure of how to go about his life's direction.

🔹Crypto regulation bill pushed by SBF may not pass due to the FTX incident after SBF donated $39.2 million to the U.S. midterm elections.

🔹Prominent trader Arthur Hayes said he has bought puts on bitcoin at $15,000, expiring in March 2023.

🔹 Yuga Labs co-founder Wylie Aronow suggested a permission list that would check wallet addresses and known royalty-respecting smart contracts to maintain creator royalties for new NFT contracts.

📣 Nov. 08

🔹 Animoca Brands announces a new NFT bike project with 3D printing startup Arevo Inc. where each bike will have NFT verification and a matching NFT image.

🔹 CMHK announced that its all-encompassing smart life mobile application MyLink has surpassed 5 million users, and launched MyLink Metaverse Digital Space and developed NFT Free Bazaar.

🔹 Watchmaker Rolex has recently filed trademark applications with the United States Patent and Trademark Office (USPTO) covering NFTs.

🔹Federal Reserve Bank of New York: Cryptocurrencies are no longer the top 10 most frequently cited potential risks.

📣 Nov. 07

🔹Theirsverse Series NFT Rises to #1 on OpenSea Trend.

🔹Musk releases 'Twitter Rules' with emphasis on privacy, authenticity and 5 other key points.

🔹Twitter co-founder and former CEO Jack Dorsey has unfollowed FTX CEO Sam Bankman-Fried (SBF) on Twitter.

🔹Appliance maker LG Electronics is hiring chief technology officers (CTOs) for two divisions, business development and service design, to lead the company's growing Web3 business.

🔹Circle to issue Euro Coin, a euro-stabilized coin, on Solana in early 2023.

📣 Nov. 06

🔹Biden: Twitter is "an institution that spreads lies to the world."

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

🔹NFT-based physical product identity company colletID closes $3.5 million funding round with participation from SeventySix Capital and others. The company raised a seed round in December 2021 and is still in the pre-A round of funding. colletID opens up a digital dimension for physical products by placing small NFT tags into physical products, giving each product a unique identity, and then storing this "unique identity" as a non-homogenized token, or NFT on the blockchain, via smart contracts.

🔹Web3 strategy game creator platform Theia Studios closes $2.4 million in funding with participation from Plum Ventures and others. The company's Web3 turn-based strategy game creator platform provides developers with toolkits that include a map editor, asset pipeline, _script_ing framework, economy builder and more to help game creators build their own strategy games.

🔹Any World, a metaverse AI animation tool development company, closed $7.5 million in funding with participation from Warner Music and others. The company also revealed that its services will be available on the Epic Games virtual engine in December of this year.

🔹Job Protocol, a decentralized recruitment network, has closed a $1.5 million round of funding at a $7.5 million valuation led by Tioga Capital with participation from Portal Ventures and Syndicate One.

🔹South Korean gaming giant NCSoft has invested $15 million in Sui developer Mysten Labs as part of the latter's previous $300 million funding round.

🔹JPMorgan said in a research note that suggest venture capital funds are reluctant to deploy capital in the digital asset space, increasing the likelihood that the current weakness in the crypto market may persist for some time.

🔹 UAE-based digital payment services platform Pyypl closed a $20 million Series B funding round with undisclosed investor information.

🔹 Blockchain startup Assert AI closes $2 million funding round with participation from Quona Capital and others.

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

🔹 Monday, U.S. attorneys announced that James Zhong pleaded guilty to wire fraud charges for illegally obtaining bitcoins from the Silk Road darknet in 2012. In November 2021, law enforcement officials seized over 50,676 bitcoins, then valued at more than $3.36 billion, from Zhong's home. The case is set for sentencing on February 22, 2023, and the DOJ says it carries a maximum sentence of 20 years in prison, with the exact length of the sentence set by Congress.