News Updates January 25, 2023
1. Scaramucci calls World Economic Forum crypto pessimism ‘enormously bullish’ for risk assets. SkyBridge Capital founder Anthony Scaramucci has revealed that he anticipates the Federal Reserve will suspend its drive to increase interest rates before meeting its 2% inflation objective, which will lead to a rally in risk assets.
Scaramucci stated his belief that the Federal Reserve would proclaim victory when inflation reaches between 4% and 5%, as per a Bloomberg report on January 25. The investor also declared that the “rampant pessimism” voiced by world leaders at the recent World Economic Forum in Davos, Switzerland, is “enormously bullish.”
“If I’m right, there will be a resurgence in the market. There’ll be a lot of short covering in crypto, and there’ll be a rebirth of risk assets.”
According to a representative for SkyBridge, the company has around 10% of its exposure to Bitcoin in the SkyBridge Multi-Adviser Hedge Fund Portfolios Series G fund, based on month-to-date estimates. However, Scaramucci said that he has no plans to increase his Bitcoin holdings in the fund and that he may “scale into other things as Bitcoin goes up.”
Scaramucci’s $9.6 million bet on FTX
Prior to the downfall of Sam Bankman-Fried’s empire, FTX, SkyBridge took funding from the exchange to the tune of $45 million. Per Scaramucci, SkyBridge used the flood of capital to make a purchase of $10 million worth of FTX’s token FTT, which was afterward sold at a loss of $9.6 million.
Scaramucci is quoted as saying, “I don’t shy away from it. I think it’s important for people who believe in capitalism and important for people that are risk-takers to understand what happened. I’m not going to be the person that takes no more risk in the future because I got burned by Sam.”
Notably, back in April 2022, FTX and Scaramucci’s forum SALT welcomed 2,000 of the biggest digital asset backers to ‘Crypto Bahamas,’ an invitation-only event of the most notable names supporting the crypto industry.
2. $1.48B in Bitcoin options expire on Friday — Will BTC hold $22K?
BTC price has started to correct, and with $1.48 billion in Bitcoin options expiring on Jan. 27, traders are watching to see if the price holds above $22,000.
Bitcoin investors' sentiment improved after signals pointing to lower inflationary pressure suggested that the U.S. Federal Reserve could soon move away from its interest rate increase and quantitative tightening. Commonly known as a pivot, the trend change would benefit risk assets such as cryptocurrencies.
On Jan. 22, the China-based peer-to-peer trades of USD Coin (USDC) reached a 3.5% premium versus the United States dollar, indicating moderate FOMO by retail traders. This level is the highest in more than 6 months, suggesting excessive cryptocurrency buying demand has pressured the indicator above fair value.
The all-time high on the 7-day Bitcoin hash rate — an estimate of processing power dedicated to mining — also supported the bullish momentum. The indicator peaked at 276.9 exo-hash per second (EH/s) on Jan. 19, signaling a reversion of the recent weakness caused by miners facing financial difficulties.
Despite the bears' best efforts, Bitcoin has been trading above $20,000 since Jan. 14 — a movement that explains why the $1.48 billion Bitcoin monthly options expiry will vastly benefit bulls despite the recent failure to break the $23,200 resistance.
3. Venture capital investments into blockchain continue to free-fall: Report
Q4 2022 saw investment capital inflows of $2.3 billion, continuing the trend since April sparked by the collapse of Terra and subsequent fallout.
Cointelegraph Research has analyzed all the deals and trends from venture capital in the blockchain industry during the fourth quarter of 2022. The second half of 2022 saw a dramatic decline in capital inflows across all five major sectors of the blockchain industry: decentralized finance (DeFi), centralized finance (CeFi), nonfungible tokens (NFTs), infrastructure and Web3. The first half of 2022 brought in just under $30 billion of investment, while the second half only saw $7.3 billion — a dramatic plunge.
As the crypto industry moves into 2023, Cointelegraph Research has looked at the data from its Venture Capital Database, which contains comprehensive details on deals, mergers and acquisition activity, investors, crypto companies, funds and more. Using this database, Cointelegraph Research crunches the numbers to find the most important trends in the industry. Its latest report explores Q4 2022 and how it relates to the broader picture of 2018 through 2022.
Investments declined starting April 2022
After the fallout from the collapse of Terra in the first part of 2022, the blockchain industry could not seem to attract venture capital back into investing in this industry as it did in 2021 and the start of 2022. There was $30.5 billion invested in 2021, and 2022 was on pace to double that — right up until April 2022, when everything began to decline. September saw a brief bounce in capital investment, but it did not sustain as the year ended, with the last three months staying below $1 billion in investments.
