Hedge or risky asset
Bitcoin was often touted as a hedge against inflation. However, this appealing story is eroding in face of persistent inflation. Axios Crypto spoke with a few experts and offer a summary of the views in their newsletter. A study by Thomas Conlon, shows that outside of a brief period at the initial stage of the COVID, there is no evidence suggesting that BTC and ETH can act as a hedge against forward inflation expectations. This argument does not appeal to Bitwise which sees a clear relationship between inflation expectations and BTC. So, is BTC a good hedge against inflation? Some might agree, some might disagree and others might nuance it, but the debate remains open.
Against the clock
On Monday, 13,000 transactions were stuck in pending state as it took 85 minutes to produce one block on Bitcoin. With mining difficulty surging to a all-time high of 35.6tn, it is becoming more and more expensive to mine BTC against a backdrop of increasing energy prices and a bear market.
The calm before the storm
Paradigm saw some volatility buying blocked in size today with skew towards the downside. This makes sense given continued extreme realized lows which is now trading at 39 for BTC and 47 for ETH.
Veni, Vidi, Discessi
UK Prime Minister Liz truss resigned yesterday following market turmoil and failed budget after just 44 days in the office, making her the shortest-serving prime minister in British history.
New tax guidelines from the US Internal Revenue Service state that all "digital assets" will be taxed under the same rules. This will include stablecoins, NFTs and cryptocurrencies.
Not too big to fall
Three Arrows Capital, once one of the industry's more prominent firms with an AUM of several billion dollars, filed for bankruptcy in July and is now under scrutiny of the CFTC and the SEC. The US regulators are probing a range of possible legal violations including misleading investors about the strength of its balance sheet.
Crypto winter is biting
"Crypto bank" Silvergate has missed analysts' estimates for third-quarter earnings. The stock declined 20% on Tuesday. Despite an increase in its digital asset customer base, average deposits per customer fell. Its payment platform handled $112.6bn of USD transfers, down 41% from the previous quarter.
Japanese crypto firms under attack
North Korean cyber crime group Lazarus has been using phishing and social engineering attacks against Japanese companies and focusing more and more on crypto firms. The prolific group is known for major hacks such as the 2017 WannaCry ransomware attack, 2014 Sony Picture attack and a series of cyber raids on pharmaceutical companies in 2020.
What's to come
Inflation data for Japan (today) & Australia (26-Oct); GDP growth rate for China (24-Oct) & US (27-Oct); Ifo business climate in Germany (25-Oct); CB consumer confidence in the US (25-Oct), Interest rate decision for the BoC (26-Oct) & ECB (27-Oct): GfK consumer confidence in Germany (26-Oct); Durable goods orders MoM for the US (27-Oct)