Bitcoin, Ether Drop as US Deploys Troops to Eastern Europe
- Crypto Markets Dropped Today On News That The US Will Be Deploying Troops To Eastern Europe
- The euro zone’s annual inflation rate hit 5.1% in January, raising uncertainty about the overall strength of the economy
US troops deployed in Eastern Europe
President Biden has approved the deployment of about 3,000 US troops to Eastern Europe in an effort to protect NATO allies in the event of further Russian aggression. Markets fell sharply on the news, with bitcoin dropping as much as 5% and ether dropping as much as 5.7% on the day.
Traditional markets also reacted harshly to the news, with the S&P 500 falling as much as 0.50% at the start of trading hours, only to rally half a percent into the positive by the end of the day. The Nasdaq followed a similar trend falling about 0.4% and rising 0.8% later.
Inflation around the world appears to be soaring as numbers roll in for the end of 2021. Recent year-over-year inflation numbers in the United States show that the CPI (industrial price index) consumption) and PCE (Personal Consumption Expenditure Price Index) rose to 7.1% and 5.8%, respectively.
Eurozone inflation figures show a similar trend, with consumer prices hitting 5.1% in January, a new record high. This trend is likely the result of an easing of monetary policy and increased economic stimulus in an effort to combat the economic downturn caused by the Covid-19 pandemic.
Although bitcoin has been touted as an inflation hedge and has performed well during the inflationary post-pandemic period, it is unclear how more intense inflation will affect the economy. If the prices of goods and services continue to rise at a faster rate than wages increase, fewer people will be able to afford to invest after paying for necessities.
Story: First grayscale ETF begins trading in a bid to track the digital economy
- The main stocks in the index that the new ETF tracks include Silvergate Capital, PayPal, Coinbase, Block and Robinhood.
- The ETF is available on NYSE Arca and has an expense ratio of 70 basis points.
Story: El Salvador Turns to US Bitcoin Wallet to Revamp Chivo
- El Salvador recruited a US-based crypto wallet provider to address Chivo’s concerns.
- Since leaving, the co-founders have had “technical breakthroughs” that Cheng says they wouldn’t have had had they stayed at Meta.
Story: DeFi Technologies Subsidiary Gets Nod to List Solana ETP on Frankfurt Stock Exchange
- A new exchange-traded product that tracks the price of Solana’s native crypto has started trading on German exchange Boerse Frankfurt Zertifikate AG.
- The ETP offers traditional investors exposure to crypto in a regulated and “fully backed” environment.
Story: India to introduce 30% crypto tax and push back CBDC by 2022-23
- India’s finance minister announced on Monday that the country is considering taxing income from crypto transfers by 30%.
- The country also looks set to introduce a CBDC by 2022-2023 in a bid to streamline India’s currency management system.
Meta (FB) is expected to release its earnings report today. The company has pushed further into the crypto industry over the past year, starting with its rebranding from Facebook to Meta and its commitment to the Metaverse. The company fell more than 20% in aftermarket trading ahead of its earnings call.
Although there has been some positive news lately, such as India and Russia’s decision not to ban cryptocurrency and many businesses jumping on the crypto and metaverse bandwagon, a heavy uncertainty still hangs over the markets. Many investors seem to be waiting for the next Fed policy change to fight inflation.
Get the top crypto news and insights of the day delivered to your inbox each evening. Subscribe to Blockworks’ free newsletter now.