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So, here is what team Inspired Analyst has for you this week:
How did Crypto respond to interest rates going up by 75BPS?
How did Ethereum perform in Q3 2022?
Did Binance mix up Helium tokens as free? What happened next?
Let’s get Started!
Crypto’s reaction to interest rates going up by 75BPS
The Feds have chosen to increase interest rates by an additional 75 basis points.
This is the third consecutive 75 bps increase,
And there are no indications that it will slow down.
The highlights of Jerome Powell's speech are as follows:
The U.S. central bank's funds rate is now 3% to 3.25%.
By end of 2023, the Fed anticipates raising rates to 4.6%.
There is "no painless way" to reduce inflation
Anticipates that the property market will see a "correction"
This announcement resulted in a nose dive in crypto prices,
yes, nose dive,
we are not exaggerating,
You can see it for yourself from this chart sourced from Coingecko.
The price of Bitcoin just as the Fed announced its latest rate hike.
A few hours after the speech,
ETH fell back to $1230 from $1370,
BTC plunged as low as $18.3k from $19.3k.
Team IA’s thoughts: Brace yourselves for a rollercoaster ride in the next few months as the Feds have made it clear that they have no intentions of stopping these rate hikes any time soon. Meanwhile, We will keep a close eye on the CPI data to be released in September.
Ethereum’s performance in Q3 2022
Ethereum successfully managed to transition from proof of work to proof of stake, famously known as the Merge on 15th September 2022.
Price
Talking about Ethereum’s performance in Q3 we can see that, in terms of price, Ethereum outperformed due to changing tokenomics and people accumulating spot assets in anticipation of airdrops from The Merge.
However, post-merge we saw a drop in price as the “sell the news” event occurred.
The saying "buy the rumor, sell the news" comes from the phenomenon of stocks or crypto trading up into "big" announcements, and then (often) selling off shortly thereafter.
Meanwhile, concerns about further interest rate rises from the U.S. Federal Reserve contributed to the drop as well.
Block Intervals
Nothing better illustrates how efficient this transformation was than looking at Ethereum's Mean and Median block times.
Here, it is quite evident that unpredictable PoW mining is coming to an end and being replaced by engineering precision PoS mining with a reliable 12-second block time.
Average Protocol Revenue
The combination of another crypto bear market, increasing volume on L2s, and protocol contract modifications for gas efficiency reduced the protocol's revenue.
As a result, overall fees dropped off a cliff in Q3, reaching their lowest level since 2020.
If these fees continue to reduce throughout the later part of the year, they will have a direct influence on staking yields post-Merge.
The overall performance of ETH in Q3’22 is beautifully summarized in this table from messari.io.
If you have any questions, post in the comments, and we will answer.
Binance gives away free Helium tokens
A flaw in the accounting systems caused Binance to unintentionally send out to its clients Helium tokens (HNT) worth $19 million. ( I wonder when Team IA will ever benefit from these errors)😅
Those who have been following me for some time already know what Helium is.
For the rest, Helium basically rewards users with tokens when they set up one of their mobile hotspots.
It contains 2 tokens: HNT ($4.50) and MOBILE ($0)
When a user transferred MOBILE tokens to their Binance account, they received HNT tokens instead since Binance mistakenly classified the two tokens as one.
They received a token for $4.50 instead of the expected token worth $0.
In total, the mistake distributed 4.8 million HNT tokens to Binance customers, valued at $19 million.
The majority of consumers sold the HNT as a gift from the Crypto titans, which decreased the price of HNT by about 20%.
Talk about (bad)luck! (Did you sense the irony?😉)
MEME of the Week
We’ll see you on Tuesday with the Technical Analysis!
Until then,
Inspired Analyst Team - signing off
Disclaimer: This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
Sir investing on USDT is a good decision? or I should invest on foreign currencies like EURUSD and something else?