Decentral Block Post

Crypto Twitter has blown up over the shocking news of Sam Bankman-Fried’s arrest in The Bahamas — many of whom weren’t expecting it to happen so soon. 

On Dec. 12, the disgraced FTX founder was arrested by the Royal Bahamas Police after receiving notification from the United States government that criminal charges has been filed against him.

Within hours, politicians, crypto executives and influencers all booted up their Twitter apps to comment on the arrest of the FTX’s former CEO.

New York Democratic Congresswoman Alexandria Ocasio-Cortez, who’s held a fairly neutral view on the crypto industry to date, told her 13.4 million Twitter followers that Bankman-Fried’s was a step in the right direction towards “justice being served,” but noted that the arrest would likely postpone Bankman-Fried’s testimony before the House Financial Services Committee, which was scheduled for Dec. 13.

U.S. Senator and sponsor of the Lummis-Gillibrand Crypto Bill, Cynthia Lummis was also pleased to hear the news, stating on Twitter that the prosecutors made the right decision to hold Bankman-Fried accountable for the “good, old-fashioned fraud” he allegedly committed.

Around 13% of the American population — or 43 million people — have held cryptocurrency at some point in their lives, new research from JPMorgan Chase has revealed.

According to a Dec. 13 report titled: "The Dynamics and Demographics of U.S. Household Crypto-Asset Use,” this number has risen dramatically since before 2020 when the figure was only around 3%.

The latest data from JPMorgan comes from analyzing checking account transfers from a sample of over 5 million customers. It found that 600,000 customers in this sample group transferred cash to crypto accounts at some point during the 2020-2022 time period.

The study also noted that cryptocurrency holders typically made their first crypto purchases during spikes in crypto prices. During this time, the amount of cash being sent into crypto exchange accounts typically far outweigh the cash being removed. In other words, most people were holding onto their crypto during this time period.

This changed in early 2022 as crypto prices fell according to JPMorgan. In recent months, cash transfers into crypto exchanges have only slightly exceeded cash transfers out of them.

2022 was a near-unprecedented year of extremes and black swan events for the crypto market, and now that the year is about to wrap up, analysts are reflecting on the lessons learned and attempting to identify the trends which may point to bullish price action in 2023. 

The collapse of Terra Luna, Three Arrows Capital and FTX created a credit crunch, a severe reduction in capital inflows and an increased threat that additional major centralized exchanges could collapse.

Despite the severity of the market downturn, a few positives have emerged. Data shows long-term hodlers and smaller-sized wallets are actively accumulating during this period of low volatility.

While the market continues to see red, positives are emerging.

Let’s dive in on the positive and negative data points.

Bitcoin (BTC) failed to break above the $17,250 resistance on Dec. 11 and subsequently faced a 2.2% correction. More importantly, the last daily close above this level was over 30 days ago — reinforcing the thesis of size sellers near the $330 billion market capitalization mark.

Curiously, this valuation level is slightly behind Palladium, the world's 23rd most valuable traded asset with a $342 billion capitalization. So from one side, Bitcoin bulls have some reasons to celebrate because the price recovered 10% from the $15,500 low on Nov. 21, but bears still have the upper hand on a larger time frame since BTC is down 64% year-to-date.

Two events are expected to determine traditional finance investors' fate, as the United States consumer price index is expected onDec. 13 and U.S. Federal Reserve chair Jerome Powell will announce the size of the next interest rate hike on Dec. 14. Powell’s press conference will also be anxiously awaited by investors.

In the cryptocurrency markets, there is mild relief stemming from exchanges' proof of reserves, although several analysts have criticized the limited details of each report.

Derivatives exchange Bybit was the latest addition to the transparency initiative, allowing users to self-verify their deposits using Merkle Trees, according to a Dec. 12 announcement.