Crypto surges on US inflation rise; Korean investors win damages

Transcript

It is getting more and more expensive these days, inflation is real and in the news lineup today.

Welcome to The Daily Forkast November 11 2021. I’m Angie Lau, Editor-in-Chief of Forkast.News covering all things blockchain.

Well, Bitcoin hit a new all time high of just over US$69,000 according to CoinGecko late Wednesday Asia time, spiking after October’s U.S. CPI leapt 6.2%, marking its largest gain in 30 years. We’re going to take a look at why inflation is such a driver for crypto markets and a whole lot more coming up.

Let’s get you up to speed from Asia to the world.

Let’s kick off with some of the top stories out of Asia today.

First up, the chairman and CEO of Chinese tech giant Tencent Pony Ma, has called the Metaverse quote “a very exciting but a little bit vague concept”. However, he also says he sees it as an opportunity for growth.

Just last month, local media reported that Tencent was hiring dozens of employees for projects that appeared to be related to the metaverse.

Over in Kazakhstan, the Minister of Energy says lawful crypto miners will not face electricity restrictions so long as they do not compromise energy security in the country.

Now power had been rationed after an influx of miners to the country saw electricity shortages. Meanwhile, Kazakhstan’s National Association of Blockchain and Data Center Industry says it’s pleased to see authorities shutting down illegal miners and that it sees a bright future for the sector in the country.

You can find more on those stories at Forkast.News.

All right. Taking a look at The New Economy now, where every week we take a deeper dive into the current crypto landscape, the opportunities, the challenges, and we explore the hottest questions in crypto right now.

In the hot seat, Michael Wu, CEO and founder of Amber Group.

Angie: It’s great to have you, Michael.

Michael: Thank you, Angie. It’s great to be here.

Angie: All right. So, Michael, in the past 24 hours, we saw crypto prices surge within minutes of reports showing inflation in the U.S. is rising while wages are falling and the price of Bitcoin hit yet another all time high. Why?

Michael: Well, I think to start with, this is a very at least eye popping number on the CPI, October CPI in the US is up 6.2%, which is, I think that the historical high ever since 1990s.

Now what does that mean? That means inflation is here and it is, you know, affecting people’s daily life. For those of you unfamiliar with the CPI, that is an index that indicates, you know, things like food prices, basic living expenses, etc.

And a fast rise in CPI means you people need to pay a lot more to buy the milk, to buy food, to pay for rent, the daily stuff they actually need, right?

And why does that matter to Bitcoin now? First of all, you know, many people still know bitcoin as the digital gold. They still know it as a digital form of storage of value. They see it as a “inflation hedge”, just like the physical gold.

So, not surprisingly, with such a upside shock to the CPI, both you know, the old gold and the new gold rallied a lot on the news. Long term wise, you know, I think that it is has been the trend and that in fact sort of is associated with the very origin of Bitcoin.

If all of us remember, Bitcoin came into existence during the first wave of quantitative easing, a.k.a. money printing from the central bank, and this inflation number, we see that the overall, you know, the writing of prices is, in fact, you know, a long overdue side effect of continuous central bank money printing.

Angie: Another hot headline this week – We heard Apple CEO Tim Cook reveal he owns crypto. Why do you think the market cares so much when we hear mainstream business leaders owning Bitcoin?

Michael: Well, I personally don’t care that much, and I doubt a lot of the more serious investors in the space really cared about it, except that, you know, the sort of the sensational news headline.

I mean, I think that Tim won’t be the first or won’t be the last. You know, there are tons of business leaders, whether they admit it or not, they’ll have own Bitcoin on their personal investment accounts at this point.

I think for a very successful tech entrepreneur, especially, or even for a high net worth individuals, it’s almost unreasonable to not own any Bitcoin. Not all any cryptocurrencies. So really, to me, it’s not even news, but I guess you know what it does is, it brings another reason for people to to have a chat point with their friends, with the family and to go, “Hey, you know, now, even Tim Cook is owning Bitcoin. That’s why, you know, I have been telling you about bitcoin forever.” So, you know, I guess it does that.

This is, after all, The New Economy. Thanks, Michael Wu, CEO and founder of Amber Group.

Over in South Korea – for the first time, the court has ruled in favor of customers who lost money in a cryptocurrency exchange hacking incident.

11 investors who suffered losses after hackers hit Coinrail, stealing 40 million in altcoins back in 2018, sued the exchange.

What do they want? Well, they wanted two things; that the exchange be held accountable for the hacking and that it was obliged to return deposited assets.

So how did the South Korean court rule, well it could have wider implications for exchanges in the future?

Forkast.News Danny Park has more.

Although the police retrieved some of the stolen crypto this year, many investors lost out. So the former customers claim damages from Cornrail’s operator Linus, saying the exchange was at fault for the hack and that it refused to return their deposits afterwards.

Coinrail shut down soon after the incident, and although it promised compensation for the lost crypto, nothing was paid out.

Then on Wednesday, Seoul Central District Court decided that Coinrail should pay the plaintiffs 380 million Korean Won, or around US$320,000 in damages.

However, while the judicial panel ruled that the exchange was obligated to reimburse the virtual assets deposited in each user’s account as stipulated in the exchange’s terms and conditions, it said the exchange was not liable for the hacking itself.

The plaintiffs also claim that the exchange stored the deposited crypto in its own e-wallet, which made it more vulnerable to hacking. But this claim was not accepted by the court.

With the court ruling heavily based on the exchange’s user agreements. It’s a warning to always exercise due diligence.

For Forkast.News I’m Danny Park.

And that’s The Daily Forkast from our vantage point right here in Asia.

Hit like, hit subscribe, hit that alert button, we always appreciate it. And it helps us with our goal to reach more of you. For more, visit Forkast.News. I’m Editor-in-Chief Angie Lau. Until the next time.