CoinMarketCap News, Nov 3: Inflation is Tougher to Solve than Central Banks Thought

The Federal Reserve has increased interest rates by 0.75 percentage points for the fourth time in a row. Jerome Powell, the chairman of the U.S. central bank, also warned that they may have to go higher than previously thought in the months ahead. With inflation remaining stubbornly high, he said: "It's very premature, in my view, to think about or to be talking about pausing our rate hikes. We have a ways to go." The latest hike means that the Fed's base rate now stands at 3.75% to 4% — a level that hasn't been seen in Bitcoin's 14-year existence. High interest rates can make stocks and cryptocurrencies look unattractive — with lower-risk assets such as government bonds offering more generous returns.

Bitcoin has resisted a fall below $20,000 in the immediate aftermath of the announcement — and remarkably, remained fairly flat on the day. By contrast, the S&P 500 in New York closed down 2.5%, while the tech-heavy Nasdaq shed 3.36%. One remark that particularly caused alarm bells was this: The Fed would rather go too far on interest rate hikes than do too little. While inflation was once regarded as a temporary phenomenon, central banks around the world are now having to contend with the fact that the cost-of-living crisis may be much harder to solve. There are fears the efforts to combat inflation could drive major economies into a recession — that is, if they're not already in one.

Binance's CEO gave a news conference at the WebSummit in Lisbon yesterday — and inevitably, talk turned to Elon Musk's Twitter takeover. CZ's exchange is a minority investor, and contributed $500 million to the acquisition. When asked whether he would be tempted to join Twitter's board, he told reporters that he would probably do it as a favor — but stressed it's not something he's dying to do. In any case, CZ believes it's unlikely he would be asked. Instead, the crypto entrepreneur says he's focused on making sure crypto has a seat at the table when it comes to free speech. CZ's main goal is to help bring Twitter into Web3 when they are ready — and potentially help facilitate crypto payments on the social network.

For many in the crypto space, the development of central bank digital currencies is very worrying indeed. Some Bitcoiners fear that they could be used to control how people spend their money — with a common example including restrictions on flights to clamp down on climate change. While CZ has previously warned most CBDCs are "going to have a lot of control attached to them," he doesn't believe they are a threat to the crypto space. In fact, he thinks they could actually help validate blockchain technology and win round skeptics — adding: "The more we have, the better." CZ also pointed out that while Bitcoin has a fixed supply of 21 million coins, central bank digital currencies would continue to be inflationary.

Meta has announced that creators will soon be able to make their very own non-fungible tokens on Instagram — and sell them to fans through the social network. The tech giant says an "end-to-end toolkit" to ensure NFTs can be created, showcased and sold — with Polygon the first blockchain to be supported. Setting out its plans in an announcement, Meta added: "We're testing these new features with a small group of creators in the U.S. first, and hope to expand to more countries soon." The update also confirmed that more types of digital collectibles can now be displayed through Instagram, including video, with support added for the Solana blockchain. A hookup with OpenSea also means that far richer metadata is now being provided.