Crypto News Headlines (27-Jan-2022)

Cryptocurrency Prices Today: Bitcoin’s market dominance rose to 42.04 percent and the asset was globally trading at $36,860.86 levels this morning.

The global cryptocurrency market capitalisation reached $1.66 trillion (up 1.68 percent) during the last 24 hours while the market volume over the last 24 hours hit $80.34 trillion.

The decentralised finance (DeFi) cryptocurrency market cap is $13.24 billion while that of stablecoins is $80.32 trillion. Stablecoins are tied to an asset – such as the dollar or any other fiat currency or gold – to stabilise their price.

Bitcoin’s market dominance rose to 42.04 percent and the asset was globally trading at $36,860.86 levels this morning. In rupee terms, Bitcoin was up 1.45 percent to trade at Rs 29,92,854 while Ethereum rose 1.74 percent to Rs 1,99,119.

Bitcoin fell below $34,000 Monday morning, compared with an all-time high of nearly $69,000 in November. Ethereum fell below $2,200 Monday morning. The significant price drops come amid the stock market’s worst week in nearly two years, and after the release of the Federal Reserve’s long-awaited report on a possible government-issued digital currency. The crypto market cap fell below $2 trillion amid the sell-off, according to CoinMarketCap data.

Some experts say the catalyst is the U.S. Federal Reserve and its plans to pull back stimulus from the economy and raise interest rates. “Many investors are removing risk from their portfolios at the moment. It could be the sign of a new market cycle,” says Grant Maddox, a certified financial planner and founder of Hampton Park Financial Planning based in South Carolina. “Long-term investors should set an allocation that fits their risk tolerance and use this for their ‘safe money.’

Bitcoin’s near-term prospects look bleak after the U.S. Federal Reserve set the stage for a more aggressive withdrawal of liquidity, weakening market confidence in the so-called Fed put – a notion that the central bank will come to the rescue if assets tumble.

On Wednesday, the Fed pointed to the U.S. economy’s underlying strength and inflation’s stickiness, and reaffirmed plans to end the bond-purchase program in March. It also hinted at a potential interest-rate increase in the same month.

Before the event, crypto followers on Twitter were expecting Fed Chairman Powell to sound less hawkish in the wake of the recent stock market drop. Powell, however, made no reference to asset prices and said policymakers feel there is quite a bit of room to raise interest rates without threatening progress on jobs.

“The balance sheet is substantially larger than it needs to be and there’s a substantial amount of shrinkage that needs to be done,” he said.

Bitcoin’s price dipped below $35,000 last week for the first time since July. That’s a big drop from the latest all-time high it hit in November, when it went over $68,000.

Even with the recent decline in price, Bitcoin is still more than twice as valuable as it was just a couple years ago. For Bitcoin, these kinds of ups and downs are nothing new.

Despite the volatility and recent slumping price, many experts still say Bitcoin is on its way to passing the $100,000 mark, though with varying opinions on exactly when that will happen. The volatility is nothing new, and is a big reason experts say new crypto investors should be extremely cautious when allocating part of their portfolio to cryptocurrency.

Bitcoin has shown as steady a rise in value over the years as any other cryptocurrency on the market. It’s only reasonable for Bitcoin investors to be curious about how high it can ultimately go.

A relief rally in crypto that had bitcoin trading near $39,000 was short-lived as the largest cryptocurrency by market capitalization fell back below $37,000 after the U.S. Federal Reserve released a statement Wednesday about reducing the size of its balance sheet.

At the time of publication, bitcoin was changing hands at about $36,800, down slightly over the past 24 hours, according to CoinDesk data. Ether, the second biggest cryptocurrency by market capitalization, was trading over $2,450 and was up slightly during the same time period.

Data compiled by CoinDesk shows that bitcoin’s spot trading volume across major crypto exchanges rose on Wednesday compared with a day ago.

Bitcoin prices declined to trade below the $36,000 level after the Federal Reserve held the interest rate at near zero with sights of increasing the rates to beat inflation. The world’s largest cryptocurrency was trading over 5% lower at 35,940. Bitcoin is still comfortably above the $33,000 level it breached on Monday, which was more than 50% off its November peak.

Meanwhile, the global cryptocurrency market capitalisation today was down 4% to $1.71 trillion, as per CoinGecko, dragged by the continuous fall in crypto prices.

As Nigerian lawmakers debate a bill that proposes a ten-year jail term for operators of Ponzi schemes, a leader of a Nigerian blockchain lobby group, Senator Ihenyen, has urged the country’s lawmakers to consider crafting a law to govern the cryptocurrency industry. He argued that an “unregulated crypto space is not in anyone’s best interest.”

Ihenyen, who heads the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN), however, concedes that while the proposed bill does not expressly mention or refer to digital currencies, crypto Ponzi schemes are included in what the lawmakers call “prohibited schemes.”

All the major cryptocurrencies gained significantly on Wednesday. The cryptocurrency tumbled last week with Bitcoin touching nearly a six-month low. However, surprising the market and investor, Bitcoin price recovered on January 26. The world’s biggest and best-known cryptocurrency, was trading 4.83 per cent higher at $37,791.11 on Wednesday morning. according to CoinmarketCap. It is now about half its $69,000 peak in November. It had a steep fall on January 21. Also, the digital token further gained market dominance rose to 42.04 per cent.

Bitcoin has had major price fluctuations as risk appetite has fallen on inflation fears and anticipation of a more aggressive pace of interest rate hikes from the US Federal Reserve.

“On the weekly timeframe, Bitcoin can be seen trading along the support level. The next support for Bitcoin is expected at the $30,140 level. The buying momentum has moderately picked up in the last couple of days and we can expect this to continue if the prices continue to stay at this level,” said WazirX trade desk in a note.

Bitcoin bounced into positive territory Monday after initially continuing its slide from last week.

On Monday, bitcoin fell to $32,982.11, its lowest point since July, according to Coin Metrics, but the largest cryptocurrency by market cap was up 5.6% in afternoon trading, to $37,183.25, as broader equities reversed course and ended the day higher. Earlier in the session, the Dow fell as much as 1,115 points and the S&P 500 briefly fell into correction territory.

Ether plunged to as low as $2,176.41, its lowest since July, according to Coin Metrics. It last rose 1.1% to $2,444.85. Bitcoin and ether are about 45% and 49% off their respective all-time highs.

Cryptocurrencies have been moving in tandem with stocks, which have continued to fall since the beginning of the year and just came off of their worst week since March 2020. Investors have been selling risk assets like technology stocks, as they prepare for tighter monetary policy from the Federal Reserve.

We have the rarest of rare sightings for January: A risk-on fervor has vaulted equities from Shanghai to Frankfurt into the green on Wednesday. Cryptocurrencies, too, are rebounding, with Bitcoin up more than 4% to come within a whisker of $38,000.

The buy-the-dippers are out in force ahead of Federal Reserve chairman Jerome Powell’s 2:30 p.m. ET press conference. Investors are anxious for any detail on the central bank’s plan to wrap up its bond-buying program (what’s known as “tapering”) and resume, down the road, the process of raising interest rates—i.e., “tightening.” A host of Wall Street banks, including Goldman Sachs and Deutsche Bank, are factoring in four rate-hikes this year, with the first to come at the next Federal Open Market Committee (FOMC) meeting in March.