Jerome Powell vs. Cryptocurrency
Photo by Executium / Unsplash

Jerome Powell vs. Cryptocurrency

Tapering could impact crypto.

Steven Lerner
Steven Lerner

Today is Tuesday, August 31, 2021.


How the Fed’s Tapering Impacts Cryptocurrency

With Federal Reserve Chair Jerome Powell recently hinting that the central bank could begin tapering this year, investors are curious to see how this could impact cryptocurrency.

Definition: Tapering is when the Fed will gradually decrease its monthly asset purchases, which was done to help the economy during the pandemic. This was known as quantitative easing (QE).

Crypto Connection: When the Fed buys more assets, this results in more liquidity for investors to buy new types of assets, which include crypto. Meaning, it is possible that the surge in crypto prices during the pandemic was linked to the Fed’s QE program.

Fear: There is concern among some investors that tapering will be bad for stocks, which will then make it bad for alternative investments such as crypto.

Bullish: But not everyone is fearful. In June, a portfolio manager at SkyBriddge Capital told Bloomberg that assets such as gold and cryptocurrency will rally if the Fed begins tapering.

Final Thoughts: While there’s no way to know the impact of tapering this early, investors should prepare their portfolios for anything.


Notables

Notable Earnings Today: CrowdStrike Holdings (Nasdaq: CRWD), PVH (NYSE: PVH), NetEase (Nasdaq: NTES), Designer Brands (NYSE: DBI).

Notable IPOs Today: DoubleDown Interactive (Nasdaq: DDI), Alpine Acquisition Corporation Unit (Nasdaq: REVEU), Fat Projects Acquisition Corp Unit (Nasdaq: FATPU), Focus Universal Inc. Common Stock (Nasdaq: FCUV), Cryo-Cell International, Inc. Common Stock (Nasdaq: CCEL).

Notable Equity Crowdfunding Campaigns Ending Today: Greenzone Pharms (Fundanna), Protein Quick (NetCapital), Talla (NetCapital), La Fayette Franchise (StartEngine), Fund the First (Republic), The Ollo Group (StartEngine), PittMoss (Republic), DRONEDEK Corporation (Wefunder), Northstars Technologies Group (NetCapital), KhemoSafe (TruCrowd), Healthy Hip Hop (Republic).

Notable Economic Events Today: Chicago PMI (9:45 a.m. ET), Consumer Confidence Index (10:00 a.m. ET).


Oil Prices in Focus Now

Keep an eye on oil prices this week. OPEC is meeting on Wednesday and they are expected to revive oil production as prices begin to stabilize.

Previous Meeting: In July, OPEC and its allies agreed to gradually cease production curbs that began during the pandemic.

Then: WTI Crude Oil prices fell from $73 a barrel to $62 during August. This was due to diminished demand in the U.S. and around the world because of the resurgence of the pandemic

A Sigh of Relief: Oil prices have started to recover over the past week as demand ticked up.

Final Thoughts: Since the price of oil recovered, shares of Exxon Mobil Corporation (NYSE: XOM) are up about 5%.


Semiconductor ETFs 2021 List

As the semiconductor industry heats up, investors are looking at several exchange-traded funds (ETFs) that could post big returns.

Big Picture: Due to increased demand and a growing dependency on technology in certain industries, semiconductors are one of the hottest sectors right now.

Data: Annual sales are expected to increase nearly 20% this year and nearly 9% next year, according to June data from the Semiconductor Industry Association.

Advantages: Compared to individual stocks, ETFs carry several advantages. The holdings of an ETF are usually very diverse, fees are low and they trade just like a stock.

Examples: Some of the leading semiconductor ETFs include iShares Semiconductor ETF, Invesco Dynamic Semiconductors ETF, and VanEck Vectors Semiconductor ETF.

Final Thoughts: When dealing with any ETF, check out if there are hidden costs. Dividends are also lower sometimes with ETFs.


Zoom Out: Zoom shares plummet in after-hours trading despite beating earnings expectations (Yahoo! Finance)

Failure to Launch: Rocket startup Astra's stock tanks after botched weekend test flight (CNN)

Bad News: China's economy under pressure as factory activity slows in Aug, services contract (Reuters)

Meta Equity Crowdfunding: StartEngine’s New Reg A+ Funding Round is Now Live (Crowdfund Insider)

Crypto's Gender Gap: Cryptocurrency investing has a big gender problem (CNBC)


Thank you for reading! Please share any feedback with info@earlybird.email.