Bitcoin appears to have weathered the US Federal Reserve’s much-anticipated stimulus tapering move today, holding above its key support level of $60,000.
The flagship cryptocurrency dipped on the Fed’s announcement that it will start phasing out its $120bn-a-month (£88.9bn) asset-purchase programme that was put in place to help the economy ride out the coronavirus crisis. The policy, known as quantitative easing (QE), pumped trillions of dollars into the financial system and had helped fuel rallies across asset classes including cryptocurrencies.
According to a study published in the International Journal of Economics and Financial Issues, QE has had “a significant impact on the two most popular cryptocurrencies, bitcoin and ethereum”. Additionally, it has “played an important role in the boom of bitcoin and ethereum, and the boom of them might lead to the frenzied market of other cryptocurrencies,” added the study.
Widely expected, but feared by some
While the taper announcement was widely expected, and therefore possibly priced into assets before the fact, a possible ending to QE, which had such an impact on the boom in cryptocurrencies, was feared by some crypto traders and market watchers.
Bitcoin first lost 5% following the announcement, according to CoinDesk, but it was back trading in $61,000 to $62,000 area around noon London time.
Down and out of the top 10
Shiba Inu (SHIB), on the other hand, was down 14%, and fell out of the top 10 cryptocurrencies by market capitalisation. SHIB’s price suffered after it failed to be listed on a cryptocurrency exchange, Kraken. The company instinuated in a Twitter post on Monday, that the meme-coin would be listed for trading on its platform, if the tweet would get 2,000 likes by Tuesday. The tweet, which now has 80,400 likes, comfortably surpassed the requirement within the deadline.
????♥️????♥️????♥️????♥️????@brianchoffman said if we get 2,000 likes we will list $SHIB tomorrow – but he doesn’t think we can do it.#SHIBArmy where you at?
???? ???? ????
???? ???? ♥️— Kraken Exchange (@krakenfx) November 1, 2021
However, the exchange seemed to back out of the listing, when it said in the same Twitter thread on Tuesday: “There’s more work for us to do as we move through our listing review process.”
????♥️???? #SHIBArmy we’ve heard you loud & clear!
Community is an important part of our considerations for all listings, and you have clearly shown your support.
There’s more work for us to do as we move through our listing review process.
— Kraken Exchange (@krakenfx) November 2, 2021
Other crypto news
Craig Wright, the Australian computer scientist and early crypto enthusiast, who claims to be pseudonymous Satoshi Nakamoto, the inventor of bitcoin, will testify in Ira Kleiman v Craig Wright civil trial later today. Wright is being sued by Ira Klein, who claims that Wright acted together with his late brother David Klein as business partners, for a share of 1.1 million bitcoins. Wright has repeatadly failed to prove that he was Nakamoto.
Roundup of the biggest coins by market capitalisation
- bitcoin was down 1.97% to $61,667.91 over the last 24 hours, according to CoinMarketCap
- ether slid 0.68% to $4,527.04
- binance coin added 2.05% to $559.53
Winners and losers
- Shiba Inu’s SHIB was down 14.19% over the past 24 hours, and sunk to 11th place of digital tokens by market capitalisation
- Solana’s SOL, on the other hand, continued its record-setting rally, adding 5.23% to $241.53
Read more: Solana (SOL) price prediction: is it a SOLid investment?
The difference between stocks and CFDs
The main difference between CFD trading and stock trading is that you don’t own the underlying stock when you trade on an individual stock CFD.
With CFDs, you never actually buy or sell the underlying asset that you’ve chosen to trade. You can still benefit if the market moves in your favour or make a loss if it moves against you. However, with traditional stock trading you enter a contract to exchange the legal ownership of the individual shares for money, and you own this equity.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade to open a position. But with traditional stock trading, you buy the shares for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks.
CFDs attract overnight costs to hold the trades, (unless you use 1-1 leverage) which makes them more suited to short-term trading opportunities. Stocks are more normally bought and held for longer. You might also pay a stockbroker commission or fees when buying and selling stocks.
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