Weekly Flip Thru: Inflation Cools Down While Compliance Might Heat Up Despite Crypto Winter
Howdy, crypto heads! There is plenty of crypto news to pore over this week. For starters, there is the latest report on consumer prices in the United States and the markets’ subsequent reaction to the news. Also, there is one potential area within the crypto industry that might be immune to the downsizing that has come along with crypto winter. And finally, we’re looking forward to an era when losing or forgetting the keys to your crypto wallet doesn’t necessarily mean you’re losing all that crypto forever.
Here’s the top crypto news for the week of January 16, 2023.
A 0.1% Drop in December Consumer Price Index Matches Economists’ Predictions (CNBC)
The top-line metric that economists use to measure inflation in the U.S. fell 0.1% to close out 2022. This is an encouraging sign that the U.S. Federal Reserve’s aggressive monetary policy of raising interest rates is working – at least for now. The slight downward movement on the Consumer Price Index (CPI) was revealed in a monthly report from the U.S. Bureau of Labor Statistics. Although this minor retreat in consumer prices was presumably met with many nods of the head and accompanying murmurs of, “thought so” from economists, the big picture on inflation is still causing headaches for consumers as prices are 6.5% higher than they were a year ago.
Core inflation figures, which exclude volatile food and gas prices, were also in line with predictions, rising 0.3% in December of 2022. The traditional stock market’s reaction was pretty muted, as the news was being digested at the end of last week. However, bitcoin (BTC) prices staged a rally over the same time period. The price of bitcoin was up 10.5% during the period of January 5 to January 12, 2023.
Compliance Discussions Heat Up at Crypto Firms During Crypto Winter (Axios)
A hiring boom in the depths of the crypto winter? It’s possible that more crypto platforms will be looking to beef up their compliance departments, and along with that, their head counts. This article from Axios speculates that regulators will be training their focus on crypto companies in 2023 following the collapse of crypto exchange FTX. Major players in the crypto industry are already starting to devote attention, and capital, to compliance efforts. Coinbase settled with the state of New York for $100 million at the beginning of 2023, with half being paid in fines and the remaining $50 million going toward shoring up compliance.
Oops – I Forgot My Keys! Crypto Loss Could be Distant Memory with Account Abstraction (CoinDesk)
It’s the nightmare scenario for crypto holders: you wake up one morning and you can’t find the keys to your crypto wallet. The development of a technology known as Account Abstraction could soon put that nightmare to bed – permanently. Account Abstraction employs a couple of methods to grant people access to their wallets, even if they’ve lost their set of keys, and right now it’s being rolled out on the Ethereum blockchain. This is a hopeful development as stories abound of costly blunders when it comes to misplaced or forgotten crypto keys.
One of the methods that could help keyless crypto investors get back into their wallets is entrusting a group of individuals with a key of their own to help those unlucky wallet holders regain access. Think of it as giving a spare set of house keys to your neighbor in case you get locked out. Other applications of Account Abstraction include biometric ID verification, like how iPhones use FaceID to unlock devices when they recognize the owner’s face.
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