Cooling US inflation may not prevent bitcoin from sliding to $10,000. Here’s why

US inflation cooled in December as expected, while in the cryptocurrency space, the bankruptcy of cryptocurrency exchange FTX continues. While all this was going on, I caught up with Joel Kruger, a strategist at LMAX Group who thinks bitcoin BTCUSD.
it may drop further to $10,000, but may reach $50,000 by the end of the year.

Bitcoin in 2023

US inflation cooled again in December. The cost of living decreased by 0.1% in December, the first decrease in two and a half years. That, combined with projected inflation figures from previous months, gave Wall Street hope that the Federal Reserve could stop raising interest rates soon before the economy goes into recession.

Lower inflation, lower Treasury yields since last November and lower unemployment have helped risky asset prices get off to a good start to the year, even as the Fed signaled it plans to raise its policy rate several more times. this year. Over the same period, the Nasdaq Composite rose more than 5%, and bitcoin rose more than 9%.

Analysts say the worst may not be over for cryptocurrency as the contagion from the collapse of cryptocurrency exchange FTX continues to spread.

According to LMAX’s Kruger, short-term technical analysis points to bitcoin prices potentially falling further before bottoming out. Kruger noted that Bitcoin fell below $17,600 in November, paving the way for another slide to $10,000.

A combination of concerns about a risky macro environment, more contagion than the FTX collapse, and regulatory pressure could all contribute to the next wave of bearish pressure, Kruger said. Kruger noted that the fall below $10,000 is still likely to be short-lived. Bitcoin could rise above $50,000 again by the end of the year, Kruger said, once the risk asset price recovery begins.

Laguna Labs CEO Stefan Rust echoed that sentiment. “I think towards the summer, once we start to see interest rates flatten out, we’ll see the recovery come,” Rust said.

“I think that in the next few months we will learn to live with 5.5% interest from the Fed. And once we reach that plateau and the guessing game is over, we’ll start to recover,” Rust said.

SBF and FTX

Meanwhile, FTX co-founder and former CEO Sam Bankman-Fried is back online, reviving his defense through a new public forum while under house arrest at his parents’ home in California.

Bankman-Fried opened a channel Thursday on SubStack, a platform that supports subscription newsletters. “I didn’t steal money,” Bankman-Fried wrote Thursday in his blog, “FTX Pre-Mortem Review,” reiterating his earlier arguments while posting more details. I have written more about this here.

Meanwhile, more progress is being made in FTX’s bankruptcy case. FTX attorney Andy Dietderich told a Delaware judge on Wednesday that the company has recovered more than $5 billion in assets, including cash, liquid cryptocurrency and liquid investment securities. The future fate of the $5 billion or any financial assets it recovers is unclear.

To see: FTX says $5 billion in assets recovered as cryptocurrency giant manages bankruptcy process

It’s also unclear how much customer funds are missing, according to Dietderich. According to the Reuters news agency, the US Commodity Futures Trading Commission estimated this figure to be more than 8 billion dollars.

Additionally, billionaire investor Peter Thiel, NFL quarterback Tom Brady and investor and television personality Kevin O’Leary were among the shareholders named in the bankruptcy court filing related to FTX.

This is the first time that Peter Thiel has been publicly associated with a crypto exchange. His family trust office Rivendell Trust and venture capital arm Thiel Capital both bought 245,000 shares and a combined value of 57,230 from West Realm Shires Inc., an FTX affiliate, filed under the name 2021-015 Investments LL. FTX trading.

In other FTX-related news, a federal judge on Wednesday voided a naming rights agreement between the cryptocurrency exchange and Miami-Dade County. This means that the home arena of the Miami Heat basketball team can now officially remove FTX from its name. Check out Anushree Dave’s coverage here.

DCG and Gemini

Crypto exchange Gemini co-founder Cameron Winklevoss on Tuesday called for the ouster of Digital Currency Group CEO Barry Silbert amid tensions between the two companies following the collapse of FTX.

According to several media reports, some users of Gemini’s Earn program, which lent their cryptocurrencies through DCG’s subsidiary Genesis to generate interest, failed to receive more than $900 million in total funds. Genesis’ lending arm has suspended repayments since November as FTX’s bankruptcy spread.

Winklevoss said in a letter to the DCG board posted on Twitter on Tuesday that Gemini and its more than 340,000 Causing users had been “swindled” by Genesis and DCG.

In response, a DCG spokesperson wrote to MarketWatch that “this is yet another desperate and unconstructive publicity stunt by Cameron Winklevoss to deflect blame from himself and Gemini, who are responsible for running Gemini Earn and marketing the program to their customers.”

Crypto in an instant

Bitcoin prices rose 8% last week and traded at around $18,771 on Thursday, according to CoinDesk data.

Ether ETHUSD
It rose 12% to $1,429 over the same period, according to CoinDesk data.

Crypto companies, funds

Coinbase Global Inc shares COIN
increased by 34.6% during the week to $45.09. MicroStrategy Inc. MSTR
is up 29% to $201.43 for the week so far.

Crypto mining company Riot Blockchain Inc. RIOT
It rose 38% to $5.80 on Thursday. Competitor Marathon Digital Holdings Inc. MARA shares
over the past week, it has risen nearly 55% to $6.04. Ebang International Holdings Inc. EBONY
It has risen 98% in the past week and is trading at $7.5.

Overstock.com Inc. shares OSTK
16% on the week, trading at $20.78.

Block Inc. SQ shares,
formerly known as Square, is up 9.9% for the week to $71.19. Tesla Inc. Shares TSLA
It increased by 9.4% to $120.80.

PayPal Holdings Inc. PYPL
traded around $79.54, up 4.4% during the week. Nvidia Corp. NVDA
Last week it increased by 15.3% to $164.50.

Advanced Micro Devices Inc. Shares AMD
gained 14% for the week to $71.06.

ProShares Bitcoin Strategy BITO among cryptocurrency funds
Its counterpart Short Bitcoin Strategy ETF BITI rose 12.7% to $11.89 on Thursday
It decreased by 11.4% to $34.78. Valkyrie Bitcoin Strategy ETF BTF
VanEck Bitcoin Strategy ETF XBTF, meanwhile, advanced almost 13% to $7.51.
It increased by 7.3% to $18.53.

Gray Bitcoin Trust GBTC
It rose more than 27% to $10.54.

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