Dear Teroxx Community,

This week we saw a digital asset market that had a largely price neutral week after eventful weeks and new FED statements on interest rate moves.

Weekly overview

As usual, we are also providing detailed videos for those who want to delve deeper into the subject.

Digital Asset News

Bitcoin investors who don’t fancy central bank digital currencies (CBDCs) could be getting some unexpected support, from banks of all places.
This is explained by influential industry head Arthur Hayes, former CEO of crypto trading platform BitMEX. “I think the apathy of the silent majority will easily allow governments to take away our cash and replace it with CBDCs, allowing them to usher in their utopia (or rather dystopia) of total financial surveillance,” Hayes’ statement reads. And further:
“But we have an unexpected ally that I expect will prevent the government from implementing the most effective version of its CBDC to control the population. That ally is the commercial banks.”
Indeed, in designing a central bank digital currency based on blockchain technology, governments have a choice between making the central bank the only “node” in the network or having the commercial banks act as nodes as well. The latter option would mean a much less radical upheaval of the existing financial system.

Institutional investors are increasingly investing in the crypto market, and investments in Ethereum in particular have increased recently. “The percentage of survey respondents who say they have invested in Ethereum has doubled compared to two years ago,” Kuiper said.
The Fidelity analyst points out that Ethereum’s appeal in the eyes of institutions will likely only increase after the Merge, as it not only makes the second-largest cryptocurrency much more environmentally friendly, but also pays out a direct interest income through Staking.
According to the same survey, institutional investors are using the bear market as an opportunity to accumulate crypto assets. As a result, 58% of institutions surveyed were already invested in cryptocurrencies by the end of 2022, up 6% from the previous year. A whopping 78% of participants even plan to enter the asset class in the future.

Investments in the Circle Reserve Fund, which is jointly managed with BlackRock and the Bank of New York Mellon, are expected to be completed by early 2023. Circle, the issuer of the major stablecoin USD Coin (UDSC), has announced that it will transfer parts of the company’s assets to the Circle Reserve Fund, which was previously established in collaboration with influential asset manager BlackRock.
Only Circle can access the fund and intends to use new revenues in part to purchase additional government bonds and place them in the Reserve Fund. The Bank of New York Mellon is again responsible for custody here. November 3 was also the launch date for this project, which is scheduled to be completed by the end of Q1 2023.
The Circle Reserve Fund meets the legal requirements under the Investment Company Act of 1940; among other things, it must disclose the specific composition of the fund on a daily basis.
The USDC is not yet as successful abroad as it is within the U.S., as crypto exchange Coinbase recently revealed that three times as many USDCs are paid in U.S. dollars than any other national currency. Nevertheless, the stablecoin continues to secure a strong second place behind market leader Tether (USDT).

Technical term of the week

Stablecoin Reserve: Describes the percentage to which a stablecoin is backed by FIAT currencies, investments, government bonds or other. This serves to be able to represent a real value. The higher the value, the more security there is for all market participants involved. Therefore, before selecting the stablecoin, this value should be carefully analyzed.

Digital Asset Markt

Due to the chart technically “small” upswing of recent weeks, a certain calm returned to the market in terms of prices last week. The FED in the U.S. declared its next 75 basis points (0.75%) interest rate step, as expected by most analysts. However, Powell (head of the FED) stated that the issued September interest rate target must be cashed in and we will see higher key interest rates. This is of course not particularly positive for the world markets, however, such statements were partly priced in, causing a quick recovery after the FED meeting.This week, the new inflation figures from the U.S. are on the program. These will be published on 10.11. and provide information on whether the chosen path of tightening monetary policy is sufficient or whether even “harder” tightening will be necessary. Clearly falling inflation figures would influence the markets very positively, further rising would be very negative for the short-term market development. Therefore, this week almost “everything” will depend on the numbers.

BTC/USDT, 60

Bullish outlook: Positive global markets, falling inflation, and accompanying potential Fed “easing” could drive markets higher.

Bearish outlook: With core inflation still rising, markets are likely to see sell-offs at the end of the week.