Weekly Flip Thru: The Crypto World Reels from FTX Fallout, October Inflation Report Stokes Rally in Stock Market

How’s it going out there? It’s been a wild week in the crypto industry. In case you’ve missed the largest news from the past week, like a major crypto exchange facing insolvency or October’s consumer price index report stoking a rally in the markets, the Weekly Flip Thru is here to help you navigate the fallout from the biggest stories in crypto.

Here are the biggest crypto news stories for the week of November 14, 2022.

FTX Faces Liquidity Crisis After Bombshell Report on Ties with Alameda Research (CoinDesk)

The crypto industry experienced a bad case of déjà vu last week as another big-time exchange disintegrated. FTX was put on its heels after a series of events that kicked off with a story about the unusual, and alarming, close ties between the crypto exchange and VC firm Alameda Research. Both organizations are majority-owned by Sam Bankman-Fried, a recognizable figure in both the crypto landscape and a political mega donor in the 2022 midterm elections.

Bankman-Fried took to Twitter last week to assuage concerns over the U.S.-based wing of FTX’s business. As the embattled CEO was reassuring customers based in the U.S., withdrawals were halted for FTX customers in other parts of the world and new customer signups were paused. Initial reports have indicated that FTX faces an $8 billion shortfall.

The Case for Self-Custodial Wallets Looks Stronger Post-FTX Fiasco

The crypto world may be increasingly turning to self-custodial wallets and services in the wake of the FTX meltdown. Businesses that act as custodians of customer funds may offer the convenience that some investors desire in their portfolio management – but the drawbacks are becoming clear as a large player like FTX’s once-mighty crypto empire dissolves in rapid fashion.

The alternative is for investors to act as safeguards of their own crypto, using things like offline, or “cold,” wallets to manage their funds. The popular phrase is “not your keys, not your crypto,” and for customers facing the prospect of having their assets locked up on exchanges while they struggle with liquidity, that saying has never rung truer.

Core Inflation Cooled, Giving Hope to US Economic Outlook (Bloomberg)

Core inflation numbers for the United States, which strip out food and fuel prices because they tend to jump around, cooled down compared to the previous month’s report. Core inflation figures for October 2022 were up 6.3%, compared to a 6.6% increase for the month of September 2022. That decline of 0.3% may seem modest, but it’s enough of an encouraging sign that the Federal Reserve’s aggressive interest rate hikes are having the intended effect. The Fed has been raising interest rates to slow down the rapid price increases that Americans have been dealing with since the pandemic. Overall, housing prices and food costs are two of the highest inflation costs for Americans this year.

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