The crypto market held support levels after the US Fed indicated a slowdown in rate hikes

  /  3 minutes read
  • Following news that the majority of central bankers prefer a slower pace of rate increases moving forward, the Federal Reserve’s November meeting minutes caused Bitcoin (BTC) to briefly increase by about 1%.
  • Customers’ withdrawals from Genesis Global Capital’s lending division were stopped last week. Genesis Global Capital is a corporate entity of Grayscale Investments.
  • Grayscale Bitcoin Trust (GBTC), the biggest publicly traded cryptocurrency fund in the world, is currently trading at a record-breaking 43% discount to the price of bitcoin (BTC).
  • In the previous week, the Ethereum (ETH) asset increased 0.60%. It decreased by 7% on last Monday after the hacker who emptied the FTX wallets sold a sizable amount of the stolen ETH for bitcoins

Bitcoin (BTC) has been range bound  in the last seven days. It’s 0.30 percent less than a week ago. It dropped to $15,649 earlier in the week, which was its lowest level in two years. When the minutes from the Federal Reserve’s November meeting came out on Wednesday, the market got a little better. The good news is that the U.S. central bank is expected to raise interest rates by smaller amounts in the future. This means the end of a series of hikes—three so far this year, each by 75 basis points—that were the steepest since 1994

US fed rate hikes
Source: Google

Traders on the Chicago Mercantile Exchange (CME) who buy and sell futures contracts on federal funds now think there is a 75% chance that the Fed will raise rates by 50 basis points at its next meeting on Dec 13-14 and by 25 basis points at its first two meetings in 2023.

Crypto prime broker Genesis was at what could be the next big company to go bankrupt after FTX. Last week, the company stopped withdrawals on its lending side because Genesis’s derivatives business was exposed to FTX for $175 million. The company reportedly then tried to get a $1 billion bailout, but didn’t get it. On Monday of last week, it was said that Genesis might be going bankrupt

Since March 2021, the GBTC shares have not traded at a premium to the underlying bitcoin, and this year’s widening discount has coincided with market volatility and the U.S. Securities and Exchange Commission’s refusal to permit the fund’s conversion into an exchange-traded fund. The largest publicly traded cryptocurrency fund in the world, Grayscale Bitcoin Trust (GBTC), is currently trading at a new record discount of 43% to the price of the underlying bitcoin (BTC).

Concluding Thoughts

Coinglasss
Source: coinglass

The price of Bitcoin dropped by about 21% in November, making it the worst month since June. Central bankers have said in the past that even though they are likely to slow down the rate hikes soon, that doesn’t mean that the end rate will also be lower. But they still don’t agree on how high rates will be in the long run. Economists at Goldman Sachs think that rates will peak in March at 5%. The current crypto winter has lasted more than 380 days, falling just short of the 415-day long bitcoin downturn that occurred during the 2013-2015 bear market. A rite of passage is making it through a bear attack. Turns rookies into veterans. We can say that we made it through the worst and longest crypto bear market in history, which is not an easy thing to do. But the bankruptcy of FTX, which was once worth $32 billion but went bankrupt in just a few days this month, continues to be a threat to the entire digital asset market.

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