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Bitfinex Alpha | Bond Markets Under Pressure, Bitcoin Remains Stable
To understand the state of an economy, it is almost always helpful to examine the behavior of that economy's bond market.
Our analysis of the US bond market is not pretty. Not only is it highly leveraged, but as interest rates rise, investors are less interested in holding bonds. The current yield is about 4%, but the inflation rate is 8%. Why would you hold an investment that inherently provides a negative return?
Also, despite the recent spike in yields, this is because of increased sales in the market. Sellers are not what you think they are. As the Fed seeks to end its quantitative easing program, it has been one of the major sellers in the market as it deleverages its balance sheet. China is also a seller, as is Japan.
This sell-off with few buyers led to unprecedented volatility and illiquidity in the market. It also increases costs for the U.S. government, because as interest rates rise, it must pay higher interest to service its $30 trillion debt. Every 1% rise in interest rates increases interest costs by about $300 billion a year.
Policymakers thus face two choices. Choose hyperinflation and print money to inject liquidity into the bond market, or raise interest rates and destroy demand and risk deflation.
This is a pressing question. A U.S. recession appears to have arrived. The prospect of an inverted yield curve, two consecutive quarters of negative economic growth and negative earnings growth for S&P 500 companies is grim.
There are some positive signs. The copper-to-gold ratio has been rising since July, pointing to continued economic expansion, especially in emerging markets. Stocks have also been rising last week.
Our conclusion is that, in the absence of widespread unemployment and negative real earnings growth, the Fed has so far avoided a recession, but we could still see a further downturn in 2023.
This week's economic reports will tell us a lot. The focus will be the jobs report on Dec. 2, and the Fed's preferred inflation measure - personal consumption expenditures (PCE) - due on Dec. 1.
So, it’s no surprise that the bitcoin market has remained largely steady due to the lack of clear direction. Other than some FUD that quickly pulled Coinbase from Binance, which briefly dropped BTC below 16k, the largest cryptocurrency remained flat.
Bitcoin withdrawals to exchanges are continuing, which we consider to be a healthy development — although the specific withdrawals that occurred on Gemini indicate localized pressure on the company as it seeks to raise capital.
As a result of this trend, however, retail investors may exit entirely, as the surge in self-custodial wallet balances rivals the depletion of FX balances.
This crypto winter is cold.
https://blog.bitfinex.com/bitfinex-alpha/bitfinex-alpha-bitcoin-holds-steady-as-bond-markets-come-under-stress/
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Bitfinex Upgrades Support for Solana SPL Token
Bitfinex has upgraded support for Solana Program Library (SPL) tokens on November 25, 2022.
Oxygen (OXY)
Serum (SRM)
Star Atlas (ATLAS)
Star Atlas DAO (POLIS)
Therefore, all users are advised to generate a new deposit address for all SPL tokens before sending any new deposits to our platform. Affected tokens are:
Using an old deposit address may result in loss of funds that cannot be recovered.
https://www.bitfinex.com/posts/869
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Bitfinex Lists Harmony ($ONE), a High-Speed and Low-Cost Expansion Solution
Bitfinex announced that it will list Harmony (ONE), a native token of a sharded, EVM-compatible Layer 1 blockchain designed to scale Web3 applications while solving Ethereum’s high gas costs and scalability issues.
Harmony is an open and fast blockchain designed to run Ethereum applications with 2 second transaction completion and 100x lower fees. ONE is used for all transactions on the Harmony chain, including mining rewards, gas fees, transaction fees, and voting. The platform is designed for creating and using decentralized applications (dApps).
As a platform designed to make it easier for developers to design DApps, Harmony was created to work with and complement the Ethereum network. The protocol provides both scaling and sharding solutions, with bridges designed to connect any proof-of-work and proof-of-stake chains. The platform's interoperability is key to its success in helping it deliver what it calls a true Web3 experience initiative.
“We are delighted to welcome Harmony to our growing ecosystem of digital tokens,” said Bitfinex CTO Paolo Ardoino. "Harmony's team understands the possibilities of blockchain, and its layer-2 scaling and interoperability solutions are designed to solve key pain points on the Ethereum network."
https://blog.bitfinex.com/media-releases/bitfinex-launches-high-speed-low-cost-scaling-solution-harmony-one/
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Bitfinex CTO Paolo Ardoino Comments on Binance Industry Recovery Fund
https://www.crowdfundinsider.com/2022/11/199326-bitfinex-cto-paolo-ardoino-comments-on-binance-recovery-fund/
