Report macroeconomics bitcoin the currency of half of 21st century

TON DUC THANG UNIVERSITY – TDTU HCMC DEPARTMENT OF FINANCE AND BANKING CLASS 704 REPORT MACROECONOMICS BITCOIN – THE CURRENCY OF HALF OF 21ST CENTURY? Group Pham Quynh Anh – 320I0131 Le Thi Hong Dao – B20I0119 Tran Mai Linh – B21D0014 Phan Kieu Oanh – B20I0104 0 TABLE OF CONTENTS INTRODUCTION: THEORETICAL BASIS: OVERVIEW ABOUT DIGITAL CURRENCY 1.1 Definition of “Crytos” 1.2 Classify of Digital Currency 2 DEFITION OF BITCOIN 3 HISTORY OF BIRTH AND DEVELOPMENT OF BITCOIN 4 CHARACTERISTICS OF BITCOIN 4.1 Account 4.2 Transaction 4.3 Security 4.4 Privacy 4.5 Legality 4.6 Liquidity ADVANTAGES AND DISADVANTAGES 10 5.1 Advantages 10 5.2 Disadvantages 11 BITCOIN INVESTMENT 11 6.1 How to invest Bitcoin 11 6.2 Exchange rate 13 6.3 Payment 14 MACROECONOMIC FACTORS AFFECTING THE CRYPTOCURRENCY MARKET 14 7.1 Inflation and Interest Rate 14 7.2 The growth and decline of the economy 15 7.3 Risk mentality 15 7.4 Government regulation of cryptocurrencies 15 7.5 Wrapping up 16 THE REALITY OF TRANSACTION AND USE OF BITCOIN 16 VIEWPOINTS ON MANAGEMENT AND USE OF BITCOIN IN THE WORLD 16 1.1 Perspectives of major international organizations 16 1.2 Nations’ point of view 17 1.3 Bitcoin’s impacts on Europe’s society 17 0 BITCOIN’S IMPACTS ON VIETNAM 21 2.1 Influences of Bitcoin in Vietnam 21 2.2 Recommendations for Vietnam 22 WHY WE FEEL BITCOIN PRICE SENSITIVE TO MACRO FACTORS 24 3.1 USD appreciation puts pressure on asset classes 24 3.2 Crypto trends fluctuate according to Macro Factors 25 3.3 Macro information to watch in the near future 26 3.4 Crypto-related policy/legal information 26 3.5 The view of the FED on interest rates 27 3.6 Economic instability continues to occur 28 3.7 When will the crypto trend follow the macro to end? 29 INVESTORS GRADUALLY WITHDRAW MONEY FROM THE CRYPTOCURRENCY MARKET 30 CONCLUSION: 32 REFERENCES: 33 0 Introduction: Reason for writing The boundaries between physical, digital, and biological are becoming more hazy as we go into the era of 4.0 Bitcoin, the pinnacle of computer technology and electronic money, is one of the greatest creations of this era As a statue in the cryptocurrency world, bitcoin That is the reason why our group selected the subject “Bitcoin – The currency of half of 21st century?” Rationale Knowledge of cryptocurrency, especially Bitcoin Object and range of study Bitcoin usage has been around the world and Vietnam since its inception Research methods The method of data collection, the method of analytical summarizing experience, the method of classification and systems, the historical method 0 Theoretical basis: Overview about Digital Currency 1.1 Definition of “Crytos” Cryptocurrencies or “cryptos” are made up of digital bits, also known as digitized money Cryptocurrencies only work in an electronic environment used to pay expenses To make transactions, users must rely on factors: Internet, computer network and electronic means of the issuer (third party) 1.2 Classify of Digital Currency Digital Currency is a form of currency that is available only in digital or electronic form, and not in physical form It includes coin, cryptocurrency, electronic money, cryptocurrency (digital money, electronic money, electronic currency, cyber cash) Currency is stored and circulated electronically Any coin encoded in and meets this definition Broadly, there are three different types of currencies: * Virtual Currencies: A Virtual Currency is an unregulated electronic currency that is not issued by the Government and can generally be issued, managed and controlled by private issuers, developers or institutions founding position This currency is used and accepted among members of a particular virtual community Virtual currencies can also be algorithmically controlled by a defined network protocol An example of a virtual currency is a gaming network token whose economics is defined and controlled by developers In 2014, the European Central Bank defined virtual currency as a digital representation of value that is not issued by a Central Bank or public authority, nor necessarily tied to fiat money (fiat currency), but is accepted by natural or legal entities as a means of payment and can be transferred, stored or transacted electronically Virtual currency is only available in electronic form It is stored and transacted only through specified software, mobile or computer applications, or through dedicated electronic wallets, and transactions occur over the internet through secure, dedicated networks * Central Bank Digital Currencies: 0 Central Bank Digital Currencies (CBDCs) are regulated digital currencies issued by the central bank of a country A CBDC can be a supplement or a replacement to traditional fiat currency Unlike fiat currency, which exists in both physical and digital form, a CBDC exists purely in digital form England, Sweden, and Uruguay are a few of the nations that are considering plans to launch a digital version of their native fiat currencies A CBDC also provides a country's central bank with the means to implement monetary policies to provide stability, control growth, and influence inflation Central bank digital currencies are digital tokens, similar to cryptocurrency, issued by a central bank They are pegged to the value of that country's fiat currency Many countries are developing CBDCs, and some have even implemented them Because so many countries are researching ways to transition to digital currencies, it's important to understand what they are and what they mean for society Defition of Bitcoin Bitcoin (BTC) is a cryptocurrency, a virtual currency designed to act as money and a form of payment outside the control of any one person, group, or entity Bitcoin's transaction system works without going through any central storage or management system This transaction system is called peer-to-peer, transactions take place between users directly, without middlemen These transactions are verified by network nodes and recorded in a public distributed ledger known as the blockchain * Since Bitcoin is a form of cryptocurrency, it inherits the common features of cryptocurrencies such as: It is considered the same property as traditional currency (paper money, coins) in many countries The Bitcoin network is not controlled by any government agency, it is completely free 0 Information about Bitcoin owners is completely anonymous, namely you send Bitcoins to someone's wallet but you cannot tell who that person is, i.e no government or bank knows where the other end is Who The transaction fees are quite low, and it is possible to transfer money from one country to another very quickly The processing and confirmation of BTC transfers from one wallet to another are done by computers all over the world, so it is impossible for a hack to hack all of them at the same time for it to crash History of birth and development of Bitcoin Bitcoin began to be designed by Satoshi in 2007 when he believed that it is possible to design a transaction system where members not need to trust each other The domain bitcoin.org was registered on August 18, 2008 Bitcoin was first mentioned on October 31, 2008 in a post about the peer-topeer payment protocol by anonymous Satoshi Nakamoto In January 2009, the bitcoin network was launched after Satoshi Nakamoto mined the first block chain The first Bitcoin transaction was made when Satoshi Nakamoto sent 10 bitcoins to cryptographer Hal Finney on January 12, 2009, right after the Bitcoin software was first released On October 5, 2009, the value of Bitcoin was first fixed on the exchange, starting at US dollar equivalent to 1,309.03 bitcoins (or bitcoin = 0.00076 USD) The Bitcoin development community gradually lost contact with Satoshi in mid-2010, after he gave Gavin Andresen the alarm key when the Bitcoin network was hacked This key can be used to alert the entire network to stop saving transactions This alarm lock was then aborted to increase the decentralization of the Bitcoin system To this day, the exact identity of Satoshi Nakamoto remains a mystery On October 22, 2010, Bitcoin was used to buy goods for the first time – a Pizza for 10,000 bitcoins, equivalent to US$25 at the time Within days from July 12, 2010, the price of Bitcoin increased 10 times from US$0.008 to US$0.08 0 In 2011, the value of Bitcoin increased from US$0.30 to US$32, before falling to US$2 Bitcoin began to attract public opinion in 2012, when there were many articles about it In 2013, several major services like OKCupid, Baidu, Reddit, Humble Bundle, Foodler and Gyft started using it In Canada, there was the world's first Bitcoin ATM In July 2013, Thailand was the first country to issue a ban on Bitcoin, after Bitcoin Thailand company presented their Bitcoin business idea to the Central Bank of Thailand However, in February 2014, the Thai Ministry of Finance declared the Central Bank of Thailand to have no jurisdiction over Bitcoin and allowed the Bitcoin Thailand company to register its business shortly thereafter In January 2014, the first insurance service using Bitcoin was launched, shortly after that Overstock announced it was the first retail issuer to accept Bitcoin payments in the US A month later, the British government released a draft of how it would tax Bitcoin transactions On February 28, 2014, Bitcoin exchange Mt.Gox filed for bankruptcy in Japan due to the loss of 750,000 bitcoins of its customers and 100,000 Bitcoins of Mt.Gox's own equivalent of $473 million The incident has damaged the reputation of this virtual currency, causing the price of Bitcoin to drop from a peak of US$1,242 to a low of US$152 In June 2014, the FBI announced the recovery of 29,000 bitcoins after a campaign to raid the Silk Road dark web market This removed Bitcoin's image as a specialized currency used by criminal organizations Shortly after month, the New York Department of Finance intends to bring Bitcoin into the category of legally protected currencies with the BitLicense On June 5, 2016, the first Bitcoin ATM in Vietnam began to be tested at Italiani's pizza shop at 290 Ly Tu Trong, District 1, Ho Chi Minh City - opposite Starbucks roundabout Phu Dong This machine is manufactured by BitAccess, operated by Bitcoin Vietnam and Bspend and is directly connected to the VBTC exchange to buy and sell Bitcoins into Dong After that, the second Bitcoin ATM was put into use at the Bitcoin cafe at 74 Bui Vien, Ho Chi Minh City in December 2016 On August 2, 2016, Bitcoin exchange Bitfinex in Hong Kong was attacked by hackers and lost 119,756 bitcoins, equivalent to about 72 million USD and 0 accounting for 0.75% of total Bitcoin in circulation The Bitcoin price immediately dropped 20% from $607 to $480, and recovered gradually back to $600 as of August 8, 2016 All Bitfinex customers are lost 36% of his assets on this exchange On February 9, 2017, the Central Bank of China inspected Bitcoin exchanges in the country Immediately after that, the largest exchanges in China announced to suspend the withdrawal of Bitcoin from the exchange for month to upgrade their AML/KYC system, causing the Bitcoin price to drop by nearly 30% However, after only weeks, the Bitcoin price has surpassed the previous level and Bitcoin transactions in China have been gradually transformed into a decentralized form outside the control of the country's government Almost months later, on June 5, 2017, exchanges in the country allowed Bitcoin withdrawals again On March 2, 2017, the price of Bitcoin surpassed the price of ounce of gold (US$1242) for the first time On April 1, 2017, Japan recognized Bitcoin as an official payment method Then, on May 9, 2017, Australia abolished taxation on Bitcoin and it was treated as a currency for tax purposes On August 21, 2017, the Prime Minister signed and approved the project to complete the legal framework to manage virtual assets, cryptocurrencies, virtual currencies, including Bitcoin This is the official signal from the Government that Bitcoin transactions will be legalized by learning from the management experience of other advanced countries The time for the ministries to complete this project is August 2018 On October 26, 2017, FPT University was the first university in Vietnam to accept Bitcoin payments On November 2, 2017, the Chicago Mercantile Exchange (CME - the world's largest options exchange) announced that it would launch futures options trading in 2017 Currently, the Bitcoin price is at $7,950 per bitcoin as of November 16, 2017 Characteristics of Bitcoin 4.1 Account Bitcoin wallets contain a user’s keys, not their actual bitcoin It’s a basically a virtual bank account but unlike traditional bank accounts, they are not insured by the FDIC, and are not managed by banks 0 * How Bitcoin wallets work? Continuing with the debit card analogy from above, a Bitcoin wallet holds at least one “account,” or sub-wallet We can view this sub-wallet as being roughly equivalent to a debit card For instance, debit cards have information associated with them, including an account number and a password Each Bitcoin “account” within a Bitcoin wallet also has information associated with it For our purposes, the two key pieces of information are the public bitcoin address and the private key The public address is comparable to the debit card’s account number The private key, meanwhile, is kind of like a debit card’s password in that it grants access to the bitcoin associated with that public bitcoin address A private key is a 256-bit secret number Here is an example: 108165236279178312660610114131826512483935470542850 824183737259708197206310322 4.2 Transaction A transfer of bitcoins from one bitcoin user to another, which contains an embedded script, a bitcoin transaction is created in a crypto wallet, residing in the user’s computer, smartphone or tablet or in cryptocurrency exchange * Transaction Sequence: The transaction is broadcast on the bitcoin network, where each participant validates and propagates the transaction until it reaches almost every node in the network The transaction is verified by a mining node and included in a block of transaction that is recorded on the blockchain Once recorded on the blockchain and confirmed by sufficient subsequent blocks, the transaction is a permanent part of the bitcoin open distributed ledger and is accepted as valid by all participants The bitcoin received by a new owner by the transaction can then be spent in a new transaction Extremely low transaction costs: No transaction intermediaries, only transaction processing fees, but it is not worth much Currently, 0 violations related to virtual currencies in general and Bitcoin in particular have caused the following negative consequences: Suicide and mental health According to World Health Statistics, globally, one person dies by suicide every 40 seconds This leads to about 800,000 suicide deaths each year In fact, suicide is the second leading cause of death in the world for 15- to 24year-olds, after accidents Most suicides are the culmination of several factors including mental health, and recently, several suicides have been reported as a result of crypto losses For instance, a Turkish man killed his two children and wife before dying by killing himself due to losses from Bitcoin investments in March 2021 In the UK, the Mirror reports, the body of a 23year-old man was found by a passerby in a wooded area of Wanstead Flats in east London in September 2021 when he lost everything amount into Bitcoin In April 2022, a group of Finnish researchers published a study that showed that people involved in cryptocurrency trading have a higher than normal rate of addiction and that crypto enthusiasts often suffer and lose their lives simpler than stock investors According to figures from crypto addiction counseling service providers, in 2021, their number of clients will increase by 40% Each consultation costs about $2,500 while a 45-day course of treatment for crypto addiction costs $25,000 To treat this addiction, they must meet with both the patient and their family members several times a week Most customers come to the service when they are heavily in debt, facing severe depression, leading to other addictions such as alcohol and cocaine One of the most stressful parts of high-risk trading is fluctuating emotions For example, a 2017 study by British researchers found that happy decisionmakers had higher levels of financial risk-taking, keeping psychosocial and environmental factors at bay change In other words, many inexperienced investors tend to be moody and moody, easily falling into emotional imbalances Money Laundering and Crypto Crimes As of the end of July 2021, major crypto thefts, hacks and frauds totaled $681 million Although the number of crypto-related crimes continues to be lower than the highs of previous years, an analysis of theft and fraud types shows an increasing trend in related crimes regarding Bitcoin in particular and cryptocurrencies in general compared to the beginning of the previous quarter of the year, especially the type of crime known as DeFi The total number of DeFi-related hacks alone is $361 million, accounting for three-quarters of the total number 19 0 of hacks in 2021, an increase of 2.7 times over the same period in 2020 In addition, fraud related to electricity deaths also continue to increase At this point, crypto-related fraud accounts for 54% of major crypto fraud volume, while 2020 crypto-related fraud accounts for only 3% of the year's total In addition, Bitcoin is easy to become a tool of some countries According to a report by Chainalysis, Ukraine is the leading cryptocurrency acceptor in Europe and the fourth largest in the world In September 2021, the country legalized cryptocurrencies, and their new Digital Transformation Department released video ads recruiting tech startups that may include crypto Meanwhile, Russia has established itself as a hub for illicit crypto activity, including ransomware attacks and crypto-based money laundering Also as reported by Chainalysis, crypto businesses operating in the city of Moscow have raked in profits worth $700 million from entities involved in criminal activity over the past three years Corruption status According to a report by the International Monetary Fund released in February 2022, cryptocurrencies are more popular in countries that are considered corrupt or have strict capital controls, so more strict regulations are needed more closely in this area The report also explains why countries might want to require intermediary organizations, such as digital currency exchanges, to perform customer identification procedures - verification standards IDs are designed to prevent fraud, money laundering and terrorist financing In fact, countries around the world are trying to figure out the best way to regulate the $2 trillion crypto market with a degree of oversight that varies widely from country to country The findings suggest that crypto assets “could be used to transfer funds obtained from corruption or to circumvent capital controls.” The IMF says it has collected baseline data on cryptocurrency usage from information gathered during a survey conducted by German firm Statista The survey was conducted in 55 countries, with the number of people surveyed ranging from 2,000 to 12,000 people in each country Although not specifically named, among the 55 countries surveyed there are some European countries Participants were asked if they would own or use digital assets in 2020 According to the IMF's assessment, the survey results are remarkable, but the interpretation of a country's corruption situation requires more caution and more complete data Even so, it is undeniable that the survey shows that a certain degree of corruption is related to the issue of virtual currencies 20 0 Bitcoin’s impacts on Vietnam 2.1 Influences of Bitcoin in Vietnam Bitcoin in Vietnam does not have many participants and still carries many negative effects due to lack of understanding Most recently, in October 2019, Bitcoin currency was used to become a tool for fraud and extortion activities for iPhone users in Vietnam On February 27, 2014, the State Bank of Vietnam issued a press release on Bitcoin and other similar virtual currencies The announcement stated: Recently, there has been a lot of information about Bitcoin Through initial research, Bitcoin is a form of digital currency (virtual money), not issued by the government or a financial institution, but created and operated based on a network of computers peer-to-peer internet Bitcoin began to be traded on the Mt.Gox exchange (Japan) in June 2010, and by 2013, Bitcoin was used in both payment, commodity trading and investment assets The appearance of Bitcoin has caused many harms and risks to users, such as: Firstly, Bitcoin transactions are highly anonymous, so Bitcoin can become a tool for crimes such as money laundering, drug trafficking, tax evasion, transactions, and payment of illegal assets Secondly, Bitcoin is a virtual currency that is stored in digital form, so the risk of being hacked, stolen, data changed or transaction stopped is great Thirdly, because the value of Bitcoin fluctuates strongly and complicatedly in a short time, investing in Bitcoin contains many risks of bubbles, potentially causing damage to investors Fourthly, Bitcoin is not governed and controlled by any state regulatory agency, so Bitcoin owners will bear all risks because there is no mechanism to protect interests In Vietnam, the "mining" and investment in Bitcoin has started to increase recently Owning Bitcoin due to "mining" in Vietnam is very little but mainly bought through a number of exchanges In 2017, more than 7,000 Bitcoin miners were imported into Vietnam The State Bank sent an official dispatch to the General Department of Customs stating: "The State Bank has no functions and duties related to the state management of the import of the above-mentioned goods" In this dispatch, the State Bank also wants to emphasize that virtual currencies in general and Bitcoin and Litecoin in 21 0 particular are not currencies and are not legal means of payment according to Vietnamese law 2.2 Recommendations for Vietnam Legislation to keep pace with the development of science and technology is a challenge not only for Vietnam but also for many countries around the world In recent years, along with the extremely rapid and outstanding development of science and technology, the virtual economy in the network world has also developed constantly In order to take advantage of the great opportunities that science and technology bring, Vietnam needs to develop and promulgate new or amend laws to regulate relations arising from new forms of transactions, different types of transactions NNew assets to limit risks, promote economic development, protect the legitimate rights and interests of investors, participating organizations and individuals Industry 4.0 requires the law to be adjusted to meet the requirements of modern society In the process of finalizing the regulatory framework for virtual currencies, we propose the following recommendations: * Firstly, there should be a clear definition of virtual currency: The first thing when building a legal framework on virtual currency is to give a clear and specific definition of virtual currency to determine the scope of virtual currency subject to be governed by Vietnamese law From there, as a basis for the development of other relevant legal provisions * Second, virtual currency should be recognized as a new asset class: The fact that the law recognizes virtual currency as an asset is a direction that is consistent with the actual situation of Vietnam today, as well as catching up with the general trend of the world In addition, determining the legal status of virtual currencies will also be a solid basis, laying the foundation for the process of developing regulations on other related issues, such as the management of ICO activities, exchanges, taxes on virtual currencies These are all areas that have a relatively large influence on the domestic economy and civil life at the domestic or transnational scale A reasonable and comprehensive legal framework based on the definition of virtual currency as an asset class will help competent authorities to better manage and effectively fight 22 0 against illegal acts in the use of virtual currencies using virtual money (such as money laundering, asset dispersal ) * Third, virtual currency should not be recognized as a means of payment: Some studies have shown that accepting virtual currency as a means of payment will have a great influence on monetary policy in Vietnam The strong growth in the number and value of cryptocurrencies is posing a lot of challenges to the financial system, banking as well as the management of monetary policy of the Central Banks controlling targets, macroeconomic variables, inflation, money supply, interest rates, exchange rates Therefore, although there are some countries in the world that recognize virtual currency as a means of payment In the current period, when the conditions of technological and financial infrastructure and people's awareness are not high, in order to ensure monetary security, prevent risks from occurring to financial activities Regarding virtual currency, we think that Vietnam should not recognize virtual currency as a means of payment In the future, when the technology platform and financial market have developed, the existence and development of virtual currencies has stabilized, then Vietnam will consider whether virtual currency is a means of payment or not * Fourth, virtual currency should be considered as a special type of asset with conditional circulation Virtual currency has a feature that is very anonymous, it is difficult to control the identity of the owner of virtual currency wallets This leads to the fact that virtual currency-related activities in both normal transactions or criminal activities such as money laundering, terrorist financing as well as other illegal activities are difficult to control Therefore, the legal mechanism for virtual money cannot be similar to that of ordinary assets, but it is necessary to consider virtual money as a special type of asset with conditional circulation Thus, in the future, in order to prevent illegal activities, maximize control of virtual currency-related activities, and limit risks for participants, Vietnam should only recognize related transactions * Fifth, it is necessary to collect taxes on activities related to virtual currency As analyzed, because it is not recognized as an asset, Vietnam does 23 0 not collect taxes on business activities and transactions of virtual currency This reduces a large source of revenue for the state budget * Sixth, permitting and controlling the issuance of virtual currency to the public (ICO) When the laws governing ICO activities for virtual currencies are clear, these activities will in fact be controlled At that time, businesses that issue virtual currency to the public will have to ensure that they are eligible and licensed This will greatly limit the multi-level ICO activities, which are fraudulent, and at the same time limit other risks * Seventh, allowing the establishment and control of virtual currency exchanges Similar to other types of securities, when recognized as securities, virtual currencies can also be traded through authorized stock exchanges However, due to the characteristics of virtual money that only exist in the digital environment, with very high anonymity, transactions about virtual money are carried out on a new technology platform - Blockchain technology, Vietnam Should establish separate and independent virtual currency exchanges for entities to trade virtual currencies at these exchanges Why we feel Bitcoin price sensitive to Macro Factors 3.1 USD appreciation puts pressure on asset classes Higher interest rates fuel demand for dollars The U.S Dollar Index, which measures the greenback against a basket of six foreign currencies, is now trading at a 20-year high after surging about 20% in the last year In that time, bitcoin has dropped a whopping 58% Furthermore, prices often tend to change according to the market's attitude towards risk Cryptocurrencies still have a lot of “risks” For the stock market, not only the stock index dropped, the trading liquidity also plummeted The tension in the exchange rate made foreign investors turn to sell strongly in the session, pulling the stock indexes, stocks fell deeply For other currencies, now, one US dollar can buy another currency more than it used to The first is the Japanese yen A year ago, USD could only buy about 110 Japanese yen, but now USD can buy 143 yen A difference in value of up to 30% is a signal that the US dollar is having a strong impact on the face value of other currencies in the world 24 0 The value of foreign currencies has caused the USD to go further against other currencies According to the USD Index, the dollar has strengthened against the euro, yen and other major currencies, estimated to have gained 14% this year And sure, the returns are even more impressive than other investments 3.2 Crypto trends fluctuate according to Macro Factors Bitcoin and crypto in the current context have a lot of dependence on macro factors Therefore, investing or trading Bitcoin today can be based on the upcoming trend of the US stock market Bitcoin trading will have a higher level of volatility leading to more risks and expected returns than the stock market On the other hand, it can be seen that Bitcoin's high correlation with macro factors can also be explained by the fact that the market does not have many really outstanding narratives (will analyze in depth later in the article) 25 0 This is a negative point that makes Bitcoin and crypto in general less attractive in the eyes of investors because of its highly correlated performance with traditional asset classes, while lower liquidity and exposure to risk 3.3 Macro information to watch in the near future Among the information on the market, information from the Fed's decisions still has a great influence, accounting for 58% of investors' attention (according to CNBC) * Besides, the information about the US employment data and the energy situation in Europe in the coming winter will also be the subject of much attention: US employment data: Employment data will be an important measure affecting the Fed's stance on monetary policy The unemployment rate in September is expected to remain at 3.7%, which is the motivation for the FED to maintain its interest rate position Energy situation in Europe: The conflict continues to escalate when Ukraine wants to join NATO along with many actions of Russia on annexing regions into the territory This makes the sanctions continue to take place, affecting the global economy In October, we will also have other important macro data announcement events that need attention, which can be mentioned below In which, the announcement of the CPI index in the US on October 13 will have the potential to have a great impact on volatility in the financial market in general and crypto in particular 3.4 Crypto-related policy/legal information Politicians in the US continue to propose to Congress on policies to regulate the crypto market and digital assets Issues revolve around who will govern this market SEC or CFTC, the transparency of stablecoins and the management of businesses operating in the crypto sector The next move in the SEC-Ripple case is showing positive signs for crypto advocates 26 0 The reason is that the Judge asked the SEC to turn over documents about William Hinman, the former director of the SEC, when this person made a statement that Bitcoin and Ethereum are not securities If Ripple wins, it will set a precedent that makes it difficult for the SEC to charge projects that list tokens on US exchanges From there, the delist token FUD news we saw on Coinbase will be reduced 3.5 The view of the FED on interest rates After the decision to raise interest rates by 0.75%, members of the FED also expressed a change of policy orientation compared to the meeting in June 2022 Specifically, the interest rate proposed by the members of the Fed in the Dot plot shows that from now until the end of the year, the interest rate will be in the range of 4-4.75% The interest rate in 2023 will also be in the range of 4.25 - 5% before making a downward adjustment from 2024 In addition, the Fed's plan to continue to slightly increase interest rates in 2023 and start to decrease in 2024 remains in place * Targets on macro indicators are also adjusted by the FED: 27 0 GDP growth in 2022 and 2023 (central tendency) in the range of 0.1 - 0.3%, respectively (down from 1.5 - 1.9%) and 0.5 - 1.5% (down from 1.3 - 2%) The unemployment rate in 2022 and 2023 is in the range of 3.8 3.9%, respectively (up from 3.6 - 3.8%) and 4.1 - 4.5% (increased from 3.8 - 4.1%) The inflation rate according to the PCE index in 2022 and 2023 is in the range of 5.3 - 5.7% (up from - 5.3%) and 2.6 - 3.5% (up from 2.4 - 3%) respectively In the current complicated context, the Fed's inflation expectations are adjusted upwards because the adjustment depends not only on monetary policy but also closely related to the US political goals 3.6 Economic instability continues to occur * Business in trouble The appreciation of the USD, increased cost pressure along with a decrease in demand make it difficult for businesses to business on a global scale For example, it can be mentioned that Apple has decided to cut production in the context of declining demand Many companies, operating globally, are facing the risk of revenue decline due to the appreciation of the US dollar Meanwhile, importers in Europe face escalating costs due to energy prices as well as the weakening of the euro 28 0 However, technology stocks that act as big pillars for the index (Apple, Amazon, Microsoft, Google, ) will put pressure on the market in the context that these companies are not expected to benefit good profit And given Bitcoin's high correlation with the S&P500, this is a factor that has a negative impact on the crypto market 3.7 When will the crypto trend follow the macro to end? Currently, the price trend in the crypto market especially Bitcoin following stocks is quite clear This trend is caused by investment cash flows coming from many traditional financial institutions 29 0 Specifically, when these institutions enter the market, they tend to apply the knowledge and investment models used when investing traditional assets into crypto That leads to the fact that crypto is now trending to follow the movements of stocks Besides, professional investment institutions will also be "sensitive" to macro factors such as interest rates, because they use many investment models based on these factors as well as the use of leverage leverage and loan capital The high degree of correlation with traditional financial assets is one reason for the dwindling crypto appeal Major trends that help improve market liquidity plus positive macro factors from the Fed will drive the growth of crypto Investors gradually withdraw money from the cryptocurrency market Investors pulled out of the fund focused on bitcoin and Ethereum, Solana, and Polkadot currencies, as the crypto market retreated 30 0 Given the crypto market's downtrend from around early December Digital products have suffered the largest weekly pullout on record According to CoinShares, a digital asset management company that aggregates industry data After 17 weeks, outflows from crypto funds totaled $142 million in seven days (up to December 17) The largest cash flow previously recorded was in early June, when net cashbacks increased to $97 million * Significantly high Bitcoin withdrawals: The report noted several factors that contributed to the increase in cash flow The report says that most of the money is coming out of risk assets, not just digital assets The cause may be due to recent signals from the US Federal Reserve That the Fed is accelerating the withdrawal of monetary stimulus has helped lift asset prices over the past few years CoinShares noted that cumulative inflows into crypto funds have reached record levels The figure of up to $9.5 billion in 2021 eclipsed the previous year's total of $6.7 billion Ethereum's ETH-related fund had a record flow totaling $64 million Solana's SOL-focused fund has $6.7 million worth of outflows While Polkadot's DOT-related fund has $2.5 million in net buybacks 31 0 Conclusion: We wish to contribute a portion of our understanding of Bitcoin to this topic However, due to the limited amount of information and resources, there will unavoidably be flaws As a result, we anticipate getting constructive criticism from you and the instructors so that we can further enhance our articles 32 0 References: Digital Currency Types, Characteristics, Pros & Cons, Future Uses; Jake Frankenfield, 13/01/2022 [https://www.investopedia.com/terms/d/digitalcurrency.asp] What Is a Central Bank Digital Currency (CBDC)?; Shobhit Seth, 19/03/2022 [https://www.investopedia.com/terms/c/central-bank-digital-currencycbdc.asp] minute and second read time; Jake Frankenfield, 14/10/2022 [https://www.investopedia.com/terms/b/bitcoin.asp] Đầu tư bitcoin? Làm đầu tư bitcoin hiệu quả?; xtbonlinetrading [https://bom.so/vdIspG] How to Buy Bitcoin; Adam Hayes, 12/08/2022 [https://bom.so/mlfg4r] Bitcoin gì? Cơ đầu tư Bitcoin bạn phải biết (2022); Lê Anh, 01/02/2021 [https://bom.so/2uwD4O] Các yếu tố kinh tế vĩ mô ảnh hưởng đến thị trường tiền điện tử; Hà Trần, 23/01/2022 [https://bom.so/cbkXGJ] Quan điểm quản lý, sử dụng Bitcoin giới khuyến nghị cho Việt Nam; ThS Phạm Thái Hà, 12/07/2021 [https://bom.so/PGEI63] Tác động bitcoin đến tình hình xã hội Châu Âu thực tiễn vấn đề pháp lý bitcoin Việt Nam; TS Phùng Lê Dung, TS Lê Hoàng Anh Tu ấn, 22/08/2022 [https://bom.so/VFSS72] 10.Senior U.S regulators propose new legislation, increased rules around digital assets; Colin Wilhelm, 03/10/2022 [https://www.theblock.co/post/174527/senior-u-s-regulators-propose-newlegislation-increased-rules-around-digital-assets] 11.Apple cuts back on iPhone production amid dwindling demand; The Economic Times, 28/09/2022 https://economictimes.indiatimes.com/tech/technology/apple-cuts-back-oniphone-production-amid-dwindlingdemand/articleshow/94494269.cms?utm_source=contentofinterest&utm_me dium=text&utm_campaign=cppst 33 0 ... creations of this era As a statue in the cryptocurrency world, bitcoin That is the reason why our group selected the subject ? ?Bitcoin – The currency of half of 21st century? ” Rationale Knowledge of. .. from the continued growth in the number of users 6.2 Exchange rate One of the issues that Bitcoin investors are most concerned about is the exchange rate of Bitcoin Unlike other currencies, the Bitcoin. .. 750,000 bitcoins of its customers and 100,000 Bitcoins of Mt.Gox''s own equivalent of $473 million The incident has damaged the reputation of this virtual currency, causing the price of Bitcoin to drop