🤔 HIGHER interest rates, FTX rapid growth and Regulations.

What will higher rates bring? How FTX is growing so rapidly and CA regulations.

September 25, 2022

Contents (4 min read):

  • 🤑 What will even HIGHER interest rates bring?

  • 🤔 FTX fast growth in the Bear market

  • 👨‍👩‍👧‍👧 Startupy - Community-curated search engine

  • 📈 Top 5 performers of the week

  • 🎧 Spatial Audio and its Metaverse Impact

  • 🔏 California Gov. Newsom vetoes crypto licensing

  • 📰 Top Reads

  • 🙏🏻 Grateful for…

🤑 What will even HIGHER interest rates bring?

FOMC’s meeting this week resulted in a 75bps increase to the Fed Funds Rate, putting the upper limit of the range at its highest since 2008.

Although this was expected, we’ve seen a selloff in the equity and fixed-income markets as a result.

It's true that "every time the Fed has hit the brakes hard enough to bring down inflation in a meaningful way, the economy has gone into recession, "In our assessment, the inflation problem facing the Fed today is substantial and unlikely to be resolved without a significant economic slowdown."

No one knows for sure what will happen, but for now, those holding credit card debt and/or loans with variable interest rates will see an increase in their monthly payments, lowering their ability to spend on other items.

The pro is that less spending will put pressure on rising prices pushing inflation to lower levels. The issue we may see is stubborn inflation rates which will force the FEDs to make tougher decisions pushing the economy into a recession. Again, no one knows, we shall see what the next FOMC meeting on November 1-2 brings.

🤔 FTX fast growth in the Bear market

Sam-Bankman Fried’s crypto exchange FTX is reportedly engaged in talks with investors to raise $1 billion in new funding, as it looks to utilize extra capital for financial acquisitions during the bear market. 

Recently, FTX acquired 7.6% of Robinhood, it has also invested $680 million in BlockFi and bought Good Luck Games, which will be rolled into FTX Gaming. The firm also announced in June it was buying clearing platform Embed to enhance its stock-trading offerings and “to provide a comprehensive trading application that spans all asset classes.”

Earlier this month, FTX Ventures, an investment arm of the firm, announced that it would acquire a 30% stake in Anthony Scaramucci’s asset management firm SkyBridge Capital for an undisclosed amount.

Acquiring derivatives platform LedgerX last year “was probably our single most significant acquisition,” said Harrison, adding that if FTX.US finally gets regulatory approval for margin trading “we will be in the best position of any futures exchange in the U.S. to offer derivatives on Bitcoin and Ether.

The extra $1 billion, if approved, will accelerate even more their acquisition pace.

Why have they been successful?

The president of the company, Brett Harrison, shared during an interview, that they have been able to build amazing products and continue growing during bear times, thanks to their customer-obsessed culture. They take customer reviews very seriously as well as social media comments and client demands.

He added: “I think we are the only company in the world where you can like, basically, mention @SBF_FTX or @Brett_FTX…and like nine times out of 10, you’ll probably get a response—if not from us, from someone else at FTX.” He added that the company’s growth largely can be attributed to this kind of collaboration. “We just constantly asked, ‘Hey, guys, what do people want? What’s working? What’s not working?’ And just getting responses on Twitter or Telegram, I think that’s an edge for us.”

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📈 Top Crypto movers of the week

The price of XRP shows a gain of around 25% currently, and it has increased by 41% over the past month. According to defense attorney James K. Filan, a ruling on whether XRP is a security is anticipated by mid-December. Investor opinion regarding XRP’s long-term prospects may be strengthening due to the excitement surrounding the news. 

The securities regulator filed a lawsuit against Ripple in December 2020, alleging that the company broke securities rules when it issued XRP to investors in its initial coin offering (ICO).

🎧 Spatial Audio and its Metaverse Impact

Spatial audio mimics the way sound is heard in the natural world, providing a sense of how far away a sound is and what direction it's coming from.

Why it matters: Spatial audio is key to making virtual reality convincing, but can also help with everything from watching movies to video conferencing. Basically, Spatial Audio is the soundtrack of the metaverse.

The technology is only in its infancy, with large hardware and software makers only beginning to invest in support. It's supported on a number of newer headphones, including models from Apple, Google, and Samsung, and we will see many new companies entering the industry.

"The Gen Z audience sees the value of spatial audio and is willing to invest in the hardware required to experience it. This should give technology companies greater confidence when considering whether or not to invest in spatial audio features and capabilities.

🔏 California Gov. Newsom vetoes crypto licensing

Adding to the existing regulatory hurdles for the crypto ecosystems, California Governor, Gavin Newsom, refused to sign a bill that would establish a licensing and regulatory framework for digital assets.

Assembly Bill 2269 sought to allow the issuance of operational licenses for crypto companies in California. On Sept. 1, California State Assembly passed the bill with no opposition from the assembly floor and went on to the governor’s office for approval.

📰 Top Reads

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