Ethereum Outshines Bitcoin Post Fed Tapering Move, Dogecoin Takes A Breather From Musk-Fed Rally – Ethereum – United States Dollar ($ETH)
Bitcoin (CRYPTO: BTC) traded steadily under the $50,000 mark as the global cryptocurrency market cap increased 2.68% to $2.26 trillion at press time.
What Happened: The apex coin was up 1.31% at $49,091.26 over 24 hours. It has fallen 2.82% over a seven-day period.
The second-largest coin by market cap, Ethereum (CRYPTO: ETH), rose 4.04% at $4,039.66. It has fallen 9.15% for the week.
Dogecoin (CRYPTO: DOGE) fell 1.25% to $0.18 over 24 hours. The meme cryptocurrency has risen 1.41% over a seven-day period.
DOGE-rival Shiba Inu increased in value by 1.79% over 24 hours to $0.00003447. For the week, it is down 7.18%.
BORA, a token of the eponymous decentralized entertainment platform, was the top 24-hour gainer, as per CoinMarketCap data. It rose 22.83% to $1 in the period. Other notable 24 hour gainers were Elrond, Avalanche, and Stacks.
Elrond shot up 16.76% to $300.24, Stacks gained 14.25% to $2.27, and Waves was up 14.07% to $17.24 in the period.
See Also: How To Buy Bitcoin (BTC)
Why Is It Moving? On Thursday, the U.S. Federal Reserve said it will maintain a target rate range between zero and 0.25% and increase the pace of monthly asset tapering to $30 billion. The central bank’s decision comes at a time when inflation has been spiraling higher at a record pace. The Federal Reserve has projected three rate hikes for the coming year.
The market priced the U.S. monetary policy decisions in advance, as per Amsterdam-based cryptocurrency trader Michaël van de Poppe.
This event has shown that the actual impact of the event was already priced in.
An example of; ‘sell the rumor, buy the news’, where most of the people started debating selling prior to the event.
Result; heavy bounce back up, leaving late sellers behind.
— Michaël van de Poppe (@CryptoMichNL) December 15, 2021
Cryptocurrency investor Lark Davis said tapering fears are “overblown” and there was “nothing to fear, but fear itself” in a tweet on Thursday.
Omicron may actually end Covid.
Tapering fears are overblown.
US is not going to war with Russia.
There is nothing to fear, but fear itself. #bitcoin
— Lark Davis (@TheCryptoLark) December 13, 2021
Not all analysts are equally bullish on the Fed’s reduction in bond buying.
“The crypto sector is impacted by the Federal Reserve meeting because today they are expected to confirm whether they will taper their bond purchasing [program] and/or raise rates in order to combat inflation. If the Federal Reserve decide to do either of these things, that could negatively impact cryptocurrency as this could mean less money flowing into risk on assets, including crypto,” wrote Marcus Sotiriou, an analyst with United Kingdom-based digital asset broker GlobalBlock.
The counterbalance is the rising adoption of digital assets, as per Sotiriou. The analyst pointed to the largest association of banks in Germany considering offering cryptocurrency-related services to their customers.
“This would enable over 50 million people to buy crypto through their bank accounts – clients would not have to go through KYC (Know Your Customer) procedures as the banks already have that information,” wrote Sotiriou, in a note seen by Benzinga.
Meanwhile, Delphi Digital, an independent research boutique, said that near-term options are now skewed towards, which implies market participants are “buying protection” or are speculating the price will deteriorate further.
Chart Tracking Implied Volatility For Various Strikes And Expiries — Courtesy Delphi Digital
Delphi’s note took into cognizance an anticipated hawkish Federal Reserve, which weighed down risk assets.