Crypto news

FED Is Unlikely To Hike Interest Rates In March Amidst Banking Stress And Chaos: Goldman Sachs

Published

1 week ago

March 13, 2023

FED Is Unlikely To Hike Interest Rates In March Amidst Banking Stress And Chaos: Goldman Sachs

The current state of the cryptocurrency market seems to be very unstable. With banks collapsing, stablecoin de-pegging, and the Fed raising interest rates, there is turmoil everywhere. The year began on a positive one, and everyone believed that the market was recovering from the influences of 2022, but things now appear to be rapidly declining.

What are the regulators doing in response to all this mayhem is the question on everyone’s mind. Following the fall of the Silicon Valley Bank, President Joe Biden of the United States has vowed to penalize those accountable while assuring the public that their deposits remain secure.

What comes next? Is the situation going to improve or worsen?

Goldman Sachs change predictions

Goldman Sachs analysts have altered their forecast for the upcoming Federal Reserve meeting in the United States, noting that they no longer expect a rate hike. This shift in forecasting is attributable to recent stress in the banking sector, which has created significant uncertainty about the path of future rate hikes beyond March.

In a recent tweet, investor Pomp has mentioned about the most recent predictions of Goldman Sachs. It was said that Goldman Sachs is now predicting that the Fed will not hike interest rates in March due to the stress in banking institutions and that it would be a historic change of strategy for a central bank who have struggled with predictability in recent years.

Goldman Sachs is now predicting the Fed will not hike interest rates in March due to the stress in banking institutions.
That would be a historic change of strategy for a central bank who has struggled with predictability in recent years.

— Pomp 🌪 (@APompliano) March 13, 2023

The company had previously anticipated a 25 basis point rate increase from the Federal Reserve. The Federal Open Market Committee raised the federal funds rate by a quarter percentage point last month, to a target range of 4.5% to 4.75%, the highest since October 2007.

Leaving aside March, Goldman Sachs economists added that they still anticipate 25 basis point hikes in May, June, and July.

Similar to 2008?

The relief measures announced on Sunday, according to Goldman Sachs experts, fall short of those taken during the 2008 financial crisis. While the Fed established a new Bank Term Financing Program to support institutions harmed by market volatility following the SVB loss, the Treasury classified SVB and Signature as systemic risks. Although they fall short of the FDIC’s 2008 guarantee of uninsured accounts, both of these measures are anticipated to boost depositor confidence.

Not everyone is on the same page

Not everyone shares Goldman Sachs’ perspective. In a recent interview with Bloomberg, Mohammed Apabhai, Head of Asia Trading Strategy at Citigroup Global Markets, expressed his opinion that the SVB debacle will not prevent the Fed from raising interest rates. He went on to say more, saying,

“In my view, no. The reason why is that we’ve been doing a lot of work, as you can imagine, about whether there is any systemic risk that there is coming through here. Doesn’t really seem like it is.”

Just a few days ago the Fed announced that they plan to continue remaining very hawkish as they believe a tougher stance is required to combat inflation. However, back then SVB had not crashed yet.

In conclusion

Could the SVB collapse change the stance of the Fed on rising interest rates? Would it get delayed as said by Goldman Sachs or would it not be affected by the SVB collapse?

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Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

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Arrested

Do Kwon’s Arrest in Montenegro Causes Steep Drop in Terra’s LUNA Tokens

Published

9 hours ago

March 23, 2023

Shayan Chowdhury

Do Kwon’s Arrest in Montenegro Causes Steep Drop in Terra’s LUNA Tokens

The Montenegrin Minister of Interior has announced that Do Kwon, the co-founder and former CEO of Terraform Labs, has been arrested in Montenegro after a prolonged manhunt. Kwon had reportedly been hiding in Serbia before being apprehended by the authorities in the neighboring country.

Do Kwon Was Detained at the Podgorica Airport with Falsified Documents

Last year, when the stablecoin TerraUSD (UST) and its $40 billion ecosystem collapsed, Do Kwon became the subject of multiple investigations and even appeared on Interpol’s red notice list. The incident caused a ripple effect throughout the cryptocurrency markets. However, Kwon managed to stay out of the authorities radar and hid his location successfully.

However, the long run of Do Kwon finally came to an end as the suspect was apprehended at Podgorica airport using forged documents. Interior Minister Filip Adzic, said:

“Montenegrin police have detained a person suspected of being one of the most wanted fugitives, South Korean citizen Do Kwon, co-founder and CEO of Singapore-based Terraform Labs.”

Dritan Abazovic, the Prime Minister of Montenegro, follows Adzic’s unverified account, and the tweet announcing Do Kwon’s arrest was retweeted by Abazovic’s official account. In addition, Adzic’s account has been referenced in previous official tweets as well.

Terra’s LUNA Tokens Experience Sharp Drop Following Do Kwon’s Arrest

The news of Kwon’s arrest in Montenegro sent shockwaves through the crypto market, causing the value of LUNA and LUNC tokens to drop by nearly 8% and 4%, respectively. The Terra market has already been struggling in recent weeks, and Kwon’s arrest has added to the growing concerns of investors.

According to CoinMarketCap, the LUNA token is trading at $1.3, and the LUNC token is hovering at $0.0001228, following a massive selloff from traders and investors amid the FUD situation.

According to reports, Do Kwon sought refuge in Singapore in September when a Seoul court issued an arrest warrant and requested Interpol to cancel his passport and issue a red notice against him. However, the Terraform Labs founder denied being on the run.

In December 2022, it was revealed that Do Kwon was actually hiding in Serbia. An official from the Korean investigative authorities confirmed the information, leading to Terra Classic (LUNC), the ecosystem’s cryptocurrency, experiencing a significant decline in performance.

In February, the SEC also charged Do Kwon for allegedly scamming $40 billion worth of cryptocurrencies in the market. An official from the National Police Agency said:

“We have confirmed the person’s age, nationality, and name with the ID card he had, and we have confirmed that he is the same person as Kwon based on photographic data. We are waiting for fingerprint information to confirm his exact identity.”

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Shayan Chowdhury

Shayan is a digital nomad and a professional journalist. He delivers high-quality engaging articles to Coinpedia through his in-depth research and analysis.

Crypto news

Coinbase Vs. SEC: Who Shall Prevail In The Battle For Crypto Clarity?

Published

11 hours ago

March 23, 2023

Elena R

Coinbase Vs. SEC: Who Shall Prevail In The Battle For Crypto Clarity?

Coinbase CEO Brian Armstrong’s recent comments comparing the Securities and Exchange Commission (SEC) to “soccer refs” in a game of pickleball have caused quite a stir in the crypto community. The remarks come after the SEC issued a Wells Notice to Coinbase, which usually precedes an enforcement action.

Imagine you’ve got both football and soccer refs on the field, but we’re actually playing pickleball (fastest growing new sport in America). The refs can’t really agree on the rules of this new game, and one of them decides to change a call they made back in April 2021.
— Brian Armstrong (@brian_armstrong) March 22, 2023

Lack of regulatory clarity to blame

Armstrong has been vocal about the lack of clarity from US regulators when it comes to crypto regulation. He has argued that the SEC has not been fair, reasonable, or even demonstrated a seriousness of purpose in its engagement with digital assets.

This sentiment is reflected in a recent tweet by Coinbase’s Chief Legal Officer, Paul Grewal, who claimed that the SEC provided “no clear rule book” on crypto regulations and that efforts to engage with the SEC are met with silence or enforcement actions

The truth is that today there is no clear rule book from the SEC on crypto, and efforts to engage with the SEC are met with silence or enforcement actions. They have not followed a good faith rulemaking process with industry, as required under the APA. 10/15
— paulgrewal.eth (@iampaulgrewal) March 22, 2023

Crypto community rallies behind Coinbase

The crypto community has widely condemned the SEC’s recent actions against Coinbase, with many agreeing that the regulator has reversed its earlier position regarding the exchange. There is a growing sense that the SEC is failing to provide the clarity and consistency that the industry needs to thrive. Many have thrown their support behind Coinbase, with some suggesting that the firm is fighting on behalf of the entire US crypto industry.

They argue that an unclear regulatory environment is driving activity offshore and that greater clarity is needed to ensure that the U.S. remains competitive in the rapidly growing crypto market.

Netizens Supports Coinbase

According to Jake Chervinsky, Chief Policy officer of the Blockchain Association, Coinbase has put in a lot of effort to obtain regulatory clarity from the SEC. However, the SEC has given Coinbase a Wells notice, which is disappointing but expected from an agency that primarily regulates through enforcement.

Fortunately, Coinbase is prepared to fight back and has a strong legal position. It’s important to remember that the SEC only makes allegations and doesn’t create laws. Ultimately, the courts will determine if the SEC’s allegations are accurate, and in this case, the SEC may be incorrect.

Coinbase has spent an extraordinary amount of time and resources working in good faith to seek regulatory clarity from the SEC.
The idea that they’d be rewarded with nothing but a Wells notice is sad, but not surprising from an agency best known for regulating by enforcement. https://t.co/BZ4a9AefEF

— Jake Chervinsky (@jchervinsky) March 22, 2023

Tony Edward, The host of Thinking Crypto Podcast, alleges that the regulator, Gary Gensler, is corrupt and had meetings with Sam Bankman-Fried and FTX officials multiple times, with the intention of creating a monopoly despite the ongoing fraud. He also claims that despite the SEC approving Coinbase’s public listing, they are now attacking the company.

Remember folks, corrupt regulator @GaryGensler had Sam Bankman-Fried and FTX officials in his office multiple times and was about to make them a monopoly despite the massive fraud that was happening.
The SEC green lighted Coinbase going public and is now attacking them.…

— Tony Edward (Thinking Crypto Podcast) (@ThinkingCrypto1) March 23, 2023
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Justin Sun was also charged with fraud and selling unregistered securities by SEC. However, in a recent tweet, he expressed confidence that the SEC’s legal complaint against his company lacks merit. He revealed that despite the legal hurdle, his company is still focused on building a decentralized financial system.

Furthermore, he acknowledges that the digital assets’ regulatory framework is still in its early stages and needs development. His company is willing to work with governments and regulatory bodies to establish clear guidelines for the crypto industry. Interestingly, Dominica recently adopted TRX and BTT as legal tender, indicating the growing significance of cryptocurrency.

The SEC’s civil complaint earlier today is just the latest example of actions it has taken against well known players in the blockchain and crypto space. We believe the complaint lacks merit, and in the meantime will continue building the most decentralized financial system.
— H.E. Justin Sun 孙宇晨 (@justinsuntron) March 23, 2023

With the SEC breathing down their necks, Coinbase is prepared to go all out in their legal battle. The crypto community has rallied behind them, with many pointing out the regulatory inconsistencies hurting the US crypto market.

Despite this lack of clarity, Coinbase remains determined to see the industry thrive and is open to collaborating with regulators to create clear guidelines. The stakes are high, but Coinbase is ready to take on the challenge and defend its position.

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Elena R

Elena is an expert in technical analysis and risk management in cryptocurrency market. She has 10+year experience in writing – accordingly she is avid journalists with a passion towards researching new insights coming into crypto erena.

Crypto news

Hindenburg Research Hints at Another ‘Big and Huge’ Report After the Adani Fiasco

Published

12 hours ago

March 23, 2023

Sohrab Khawas

Hindenburg Research Hints at Another ‘Big and Huge’ Report After the Adani Fiasco

The US-based short seller Hindenburg Research, which had previously published a report flagging the Adani group for manipulating the stock market and using unlawful offshore tax havens, announced on Thursday that it will shortly publish new research. The new report is expected to be “another huge one,” and the short-seller withheld any other information.

Taking to Twitter, they wrote, “New report soon—another big one.” As Hindenburg hinted in a new major report, banking stocks are already under pressure from the US financial crisis and the 25 basis point Fed rate hike.

New report soon—another big one.
— Hindenburg Research (@HindenburgRes) March 22, 2023

A few weeks ago, in a report dated January 24, the US short-seller accused the Adani group of “brazen stock manipulation and accounting fraud” and of employing several offshore shell firms to manipulate stock prices. The Gautam Adani-led group was the target of various other accusations in the report.

The company is said to have “substantial debt,” which involves pledging shares as collateral for loans, according to the report, and it added that the group’s auditor “hardly seems capable of complex audit work.”

The Adani group replied to the allegations in 413 pages and a part of their reply read, “ The document is a malicious combination of selective misinformation and concealed facts relating to baseless and discredited allegations to drive an ulterior motive. This is rife with conflict of interest and intended only to create a false market in securities to enable Hindenburg, an admitted short seller, to book massive financial gain through wrongful means at the cost of countless investors.”

This update comes at a time when the bank runs, regulators backlash and the fed’s interest hikes have gripped the economy. The crypto-focused bank, Silvergate Capital first announced insolvency, and then Silicon Valley Bank began scaring investors and account holders. However, then the regulators then took control and the rest is history.