Finance Monthly - December 2022

Finance Monthly. 7 The Mon t h l y Round -Up The price of Bitcoin has reached a two-year low, following Binance’s decision to scrap the deal to buy smaller cryptocurrency exchange FTX. On Thursday 10th November, Bitcoin fell below $16,000 for the first time since 2020, as the price of other cryptocurrencies was negatively impacted too. BITCOIN HITS A TWO-YEAR LOW AS FTX DEAL COLLAPSES THE FED INCREASES INTEREST RATES TO A 14-YEAR HIGH The US Central Bank has announced another sharp hike in interest rates as prices continue to rise. It is raising its key interest rate by 0.75 percentage points, taking the bank’s benchmark lending rate to 3.75% – 4%. It now sits at its highest rate since January 2008. The bank’s hopes are that the hike will bring down price inflation but critics are worried about the ‘serious downturn’ that will come with it. Further increases are expected as Federal Reserve Chairman Jerome Powell said: “We still have some ways to go.” Similar announcement is expected in the UK today, as countries across the globe continue to raise their own interest rates in an attempt to solve their inflation problems. Binance decided to pull out of the deal because of due diligence concerns connected to reports of “mishandled customer funds and alleged US agency investigations”. The move has left FTX customers unable to make withdrawals from the exchange, as fears of further crypto volatility if the company goes bust are intensifying. On Twitter, Binance commented that the issues facing FTX were “beyond our control or ability to help”. “Every time a major player in an industry fails, retail consumers will suffer. We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market.”

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