Some of the top cryptocurrencies by market capitalization lost ground this week after the US Federal Reserve Bank announced that it will accelerate its plans to reduce asset purchases and increase interest rates.
Bitcoin ended the trading session on Friday down 3.6% to $ 46,347 per unit and is down more than 4% in the last seven days.
Ethereum faced a similar plunge on Friday, ending down 4% to over $ 3,800 per unit.
Other popular assets like Polkadot and XRP faced even steeper losses on the week. Polkadot finished down more than 7% on Friday at $ 24.44 per token and is down more than 8.5% in the last seven days.
FOMC meeting
Markets saw a slight rise on Wednesday after the FOMC meeting when the Federal Reserve announced three possible rate hikes in 2022.
The increase was also reflected in a 2.15% rally for the high-tech Nasdaq Composite Index.
"Since most of this was priced in the last two weeks, risk assets responded almost instantly in a positive way," wrote Jimin Noh, an analyst at Delphi Digital, in a Note to investors.
However, these gains were short-lived as markets spent the remainder of the week assimilating the continued risk of inflation, the spread of the Covid-19 Omicron variant, and corresponding supply chain issues.
The avalanche returns
Despite heavy losses among market leaders, one asset held well above the rest over the past week.
Avalanche ended Friday's trading session up more than 8% to $ 110 per unit as developer activity on the platform increased.
The platform is similar to Ethereum in that it executes smart contracts for each transaction, but Avalanche runs three different blockchains that allow it to reduce its transaction fees.
Over the past seven days, Avalanche has gained more than 30% in value and is on track to set a new all-time high.
According to a recent note from Delphi Digital analyst Genevieve Yeoh, there are more than 400 developers with 70,000 smart contracts deployed on the Avalanche platform.
Most of the activity increased after Avalanche launched its Chainlink price feeds in July, says the note. Chainlink gave developers more tools to build advanced decentralized finance (DeFi) applications on Avalanche's open source platform.
Read more: What's next after the recent bitcoin price crash?
The difference between trading assets and CFDs
The main difference between trading CFDs and trading assets, such as commodities and stocks, is that you do not own the underlying asset when you trade a CFD.
You can still profit if the market moves in your favor, or lose if it moves against you. However, with traditional trading, you sign a contract to exchange legal ownership of individual stocks or commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the total value of the CFD trade to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to maintain trades (unless you use 1-1 leverage), making them more suitable for short-term trading opportunities. Typically, stocks and commodities are bought and held longer. You can also pay commission or broker fees when buying and selling assets outright and you would need a place to store them safely.
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