No Comments

Bitcoin, crypto boosted by Fed relief rally, investors 'bracing for the worst' get surprised – Yahoo Finance

The Federal Reserve's surprisingly hawkish policy turn has had a surprise beneficiary: Cryptocurrencies.
Digital coins extended gains on Thursday after the Fed stepped up its taper, and laid the foundation for a tightening cycle that could bring as many as three rate hikes in 2022. Normally, cryptocurrency benefits from loose monetary policy and its inflationary side-effects; but at least for now, investors are taking the longer view.
Bitcoin (BTC-USD), barely a week removed from an ugly selloff that dragged it below $50,000, rallied by over 2% on the day. 
Other digital coins that power smart contract layer-1 blockchains like Ethereum (ETH-USD) — which helps power the blockchain for the majority of decentralized finance (DeFi), non-fungible tokens (NFTs) and other smart-contract applications like Decentralized Autonomous Organizations (DAOs) — Solana (SOL1-USD), Terra (LUNA1-USD) and Avalanche (AVAX-USD) are also posting big gains. 
It's been a rough fall for cryptocurrencies, even as the introduction of Bitcoin exchange-traded funds (ETFs) lure in smaller investors. In recent weeks, the value of the asset class has plummeted by more than $700 billion from almost $3 trillion to $2.15 according to Coinmarketcap.
Fears over the Fed's policy and the Omicron variant of COVID-19 have contributed to a volatile tone in markets, with crypto trading in tandem with risk-sensitive stocks. 
Louis LaValle, a managing director with crypto investment firm 3iQ Digital Assets U.S., told Yahoo Finance that crypto's whipsawing is linked to the sheer volume of new investors, especially institutions, who purchased digital coins for the first time this year.
That includes billions that have flooded into crypto derivatives. Open interest on BTC futures is down by $10 billion since October, but still more than twice as high as the $8 billion it saw a year ago, according to data from The Block.
Though the Fed's policy shift signals a less desirable environment for growth-minded investors, it did "exactly what was expected" by quelling short-term inflation fears, according to Jon Wolfenbarger, market analyst and CEO of Bull and Bear Profits, an investing service. That created a buying opportunity, he added.
"People were bracing for something worse and because that didn't happen, investors are relieved and we're seeing a relief rally in stocks and crypto. But one day or a few days doesn't mean much," Wolfenbarger pointed out.
Trending lower since November, cryptocurrencies corrected in a big way early this month when large derivatives positions liquidated en masse. Bitcoin has yet to fully recover, consistently running into resistance around $50,000.
Even worse, the Bitcoin Fear and Greed Index — which measures investor sentiment like volatility, social media and trading volume — points to a fearful, even bearish market, but some of that has dissipated after the Fed.
Yuya Hasegawa, an analyst with Tokyo-based crypto exchange Bitbank, said investors had ample time to "price in" the central bank's newfound hawkishness since Fed Chairman Jerome Powell took a more assertive stance in a Senate hearing.
"Anything less aggressive than what is expected sends bitcoin higher," Hasegawa told Yahoo Finance. 
More clarity around the taper schedule might also help investors see a longer runway before rate hikes according to Edward Moya, Oanda's senior market analyst.
"The playbook for the next several months is that risk appetite could remain in place if the Fed only has to deliver only a few rate hikes next year, which would be great news for cryptos," said Moya.
End of year market
Profit taking, especially for tax preparation, also played against the bullish buyers of the asset class over the last month.
Andrew Gordon, an attorney and CPA with Gordon Law, told Yahoo Finance that his clients are both selling at a gain to avoid paying higher taxes next year — and selling at a loss to offset their overall tax burden, especially when it comes to non-fungible tokens (NFTs).
However, a few bulls, like cryptocurrency trader Philip Swift, remain optimistic based on other factors.
"We are actually seeing growth in Bitcoin active addresses outpace price growth. So on a relative basis, the network is growing despite the weak recent price action. This is bullish as it indicates the network is healthy," Swift told Yahoo Finance via Twitter.
3iQ's LaValle also sees the current investing environment for cryptocurrencies as more advantageous. 
"We're pushed out to the middle or back half of 2022. So I don't think that rates are really going to have a near term effect on asset prices," LaValle added.
David Hollerith covers cryptocurrency for Yahoo Finance. Follow him @dshollers.
Read the latest financial and business news from Yahoo Finance
Read the latest cryptocurrency and bitcoin news from Yahoo Finance
Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn
America may not be able to handle the new reality ahead, the economist says.
GameStop’s (GME) stock is surging in after-hours after a report that the video game retailer is launching a marketplace for nonfungible tokens (NFTs). The company has a link on the GameStop URL soliciting creators in the NFT marketplace.
It's time to abandon today’s obsession with empty growth, the CNBC host says.
What happened Shares of plant-based meat company Beyond Meat (NASDAQ: BYND) soared on Thursday — a day late. The company made a big announcement on Wednesday, and the stock spiked higher in pre-market trading.
The stock's activity could lead to a false bullish narrative
Bad news for investors who own CrowdStrike (NASDAQ: CRWD): This morning, Piper Sandler cut its price target on your stock by 17%, to $250 a share. Good news for CrowdStrike shareholders: Piper's $250 price target still leaves room for CrowdStrike shares to rise 32% this year, and as of 2:45 p.m. ET, CrowdStrike stock is up 5.7% in response. Piper Sandler recognizes that fact, and is maintaining its overweight rating on the shares — and not just Piper Sandler, either, because just yesterday, Wells Fargo initiated coverage of CrowdStrike with an overweight rating of its own.
(Bloomberg) — Humana Inc. shares plunged the most intraday in 13 years, dragging down rivals’ stocks, after the health insurer cut its forecast for Medicare membership growth by about half.Humana expects to add 150,000 to 200,000 new members in Medicare Advantage plans this year, down from an earlier estimate of 325,000 to 375,000, the company said Thursday in a filing. The insurer cited higher-than-expected terminations during the recent enrollment window for 2022 Medicare coverage. Shares of
The stocks of Lucid Group (NASDAQ: LCID) and Nio (NYSE: NIO) are each down between 20% and 30% since the start of December 2021. As of 1:50 p.m. ET, shares of Lucid and Nio were down 4.7% and 2.2%, respectively. While shares have been trending down with the tech market recently, Lucid and Nio may be getting affected a bit by Tesla right now.
Shares of Teladoc Health (NYSE: TDOC) were sinking 11.3% this week as of the market close on Thursday, based on data from S&P Global Market Intelligence. The only announcement from Teladoc was that it plans to participate in the virtual J.P. Morgan Healthcare Conference next week. Second, the overall stock market has been highly volatile, with the Federal Reserve confirming that interest rate hikes are on the way.
A tepid market rally fizzled Thursday as bond yields kept rising. Meme stocks rallied, led by Trump stock DWAC.
Here's why this tech giant will cash in on the metasverse, says one widely followed analyst.
Between a price target hike from Bank of America and some very positive news on electric car battery ranges, Thursday should have been a great day to own Tesla (NASDAQ: TSLA) stock — but it's not working out that way. Instead of going up, Tesla stock is going down today, falling 4% as of 10:30 a.m. ET and extending a three-day slide that has already cost Tesla investors 12.5% since the start of the New Year. This morning, analysts at Bank of America raised their price target on Tesla stock to $1,300 a share, as reports.
In this article, we will discuss 10 safe dividend stocks with high yields. To skip our analysis of dividend investing, you can go directly to 5 Safe Dividend Stocks with High Yields. According to a report published by Global X, between 1960 to 2017, stocks paying high dividends outperformed the S&P 500 in terms of […]There's a reason Dividend Aristocrats are among the most popular stocks on the market. Here are three that should benefit strongly from current and upcoming trends this year: McDonald's (NYSE: MCD), AT&T (NYSE: T), and Realty Income (NYSE: O). Is there a more resilient restaurant stock than McDonald's?
The chief executive of the blank-check acquisition firm that plans to merge with former U.S. President Donald Trump’s new social media venture is chasing retail investors to save another of his deals from falling apart. According to regulatory filings and a person familiar with the matter, Benessere Capital led by Patrick Orlando has postponed its special shareholders' meeting to extend its deadline to complete a merger because not enough investors sent in their votes. The special shareholder meeting has been rescheduled to Jan. 7, the previously set date for Benessere to close a deal, from Jan. 5.
(Bloomberg) — A near-record number of tech stocks have plunged by some 50% in an echo of the dot-com crash.Roughly four in every 10 companies on the Nasdaq Composite Index have seen their market values cut in half from their 52-week highs, while the majority of gauge members are mired in bear markets, according to Jason Goepfert, chief research officer at Sundial Capital Research. “Whatever the fundamental and macro considerations, there is no doubt that investors have been selling first and tr
The stock market was having a fairly strong session on Thursday, but insurance disruptor Lemonade (NYSE: LMND) was an exception. As of 2:30 p.m. ET, Lemonade was down nearly 3%, reaching a fresh 52-week low in the process. An analyst at Barclays who covers Lemonade maintained its "equal-weight" rating (similar to a neutral opinion) but dramatically lowered their price target on the stock from $62 to $43.
Wish's stock tumbled as its monthly active users (MAUs) declined, its revenue growth decelerated, and it continued to bleed red ink. Its logistics and quality control issues, the abrupt resignation of its founder and CEO Piotr Szulczewski, regulatory headwinds in France, and insider sales exacerbated that sell-off.
Palantir (NYSE: PLTR) provides data mining and analytics services for large government and enterprise clients. Palantir's revenue rose 25% in 2019 and grew 47% in 2020. Palantir isn't profitable on a generally accepted accounting principles (GAAP) basis yet, but its adjusted gross and operating margins have been steadily expanding as its free cash flow (FCF) turned positive in 2021.
Shares of software-company Palantir Technologies (NYSE: PLTR) has been a darling among retail investors since its publicly traded debut in late 2020, but the company has plenty of skeptics on Wall Street. Palantir stock was down 6.7% today as of market close, caught up in yet another steep slide for high-growth but richly valued stocks. Palantir is now nearly 60% below its all-time high, reached in early 2021.


You might also like

More Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.
You need to agree with the terms to proceed

This site uses Akismet to reduce spam. Learn how your comment data is processed.