Bank of Russia Collapse

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2022-05-17 14:13:27

Market situation

Bitcoin yesterday continued to fluctuate around $43,000 to $45,000. Some altcoins are flat and some are down slightly. Fear and Greed Index returns to fear level (39). The market was more nervous than the day before.

US stocks ended the day slightly higher after the Fed chair announced a rate hike. The stock futures market is mostly flat. Slight decrease in Nas FUT stat.

Oil price has risen sharply above 113 USD/barrel. President Biden also said that oil prices need to be managed because rising oil will affect and increase overall inflation. Oil price not only affects personal gasoline but also affects production price, transportation cost, etc. An increase in oil price will cause costs and prices of related or used products to increase.

BTC goes sideways, the rate of BTC profit is also around 76.7%. This level is still below 85% and not a notable high.

The number of BTC continues to decrease on the exchange. BTC withdrawn from the exchange is larger than the amount of BTC deposited on the exchange.

The war between Russia and Ukraine and the effects of economic sanctions

Russia’s invasion of Ukraine will enter its second Thursday as fighting continues across the smaller country. There are conflicting reports about which side controls the city of Kherson. The Ukrainians still control the capital, Kyiv, despite Russia’s efforts to capture the city. The port cities of Maripol and Kharkiv, Ukraine’s second largest city, experienced massive shelling on Wednesday.

Speaking at a session of the 49th United Nations Human Rights Council, Michelle Bachelet said that 227 people, including 15 children, were killed in the conflict between February 24 and Tuesday night. Of the 525 injuries reported to the United Nations during the same period, 28 were children.

As for the economic impact, Russia’s largest bank Sberbank said its European subsidiaries were experiencing “extraordinary cash flows” and expressed concern about the safety of their employees and assets. . As of yesterday’s London trading session, shares of Sberbank were down 94.24% to $0.01. The bank has lost 99.9% of its value since the start of this year.

Additional US sanctions are expected against many Russian oligarchs and their families. The United States is expected to roll out new sanctions against an expanding list of Russian oligarchs and their families through the seizure of assets such as villas, yachts, private planes, and more. .

And Ukraine has received donations of nearly 50 million USD through Bitcoin, Ethereum, DOT,… To be able to donate quickly and achieve such a large number is thanks to BTC and crypto. At the beginning of 2022, we saw a country that can receive large and fast donations through crypto.

The intense war made many people in Russia and Ukraine realize that BTC and crypto are assets they should hold and easily take with them when evacuating or out of the country’s borders.

Santiment also shows that whales are becoming more and more active in making large trades. In the past three days, there have been 13,400 Bitcoins traded with a value of $1 million or more. At the same time, the number of large wallets also increased.

Billionaire investor Bill Miller discussed Bitcoin’s potential to serve as a safe-haven asset during times of international uncertainty. The American investor explains why Russia and other countries without reserve currencies can use Bitcoin to fight inflation that foreign governments cannot control.

Fed announces rate hike

He also added that Russia has 16% of its 640 billion reserves in dollars, 32% in euros. They have almost 50% of their reserves in currencies controlled by other countries. Russia has only 22% of gold and that is the only part of its reserves that other countries cannot control. Therefore, Mr. Bill Miller said that countries will need to think carefully about storing foreign currency. In this context, he sees an optimistic future for BTC. The Russian government can also use BTC to fight the current economic embargo.

Federal Reserve Chairman Jerome Powell still thinks rate hikes are imminent. At the same time, he also acknowledged the great difficulty that Russia’s invasion of Ukraine is causing. Chairman Powell said a rate hike would start at 0.25%, although he said he would be open to more aggressive moves if inflation worsens. This year, the Fed will raise interest rates many times, but they also carefully consider the effects of wars in Ukraine and Russia.

In the short term, Fed rate hikes could affect BTC. But the long-term trend of BTC is still bullish. The Fed’s most recent rate hike from 2026-2017 shows this. Investors were also not surprised by the Fed’s rate hike. Because this has been said many times before and raising interest rates is also a familiar tool of the Fed to control inflation.

According to CME data, markets have fully priced in the Fed rate hike at its March 15-16 meeting but have lowered expectations for the rest of the year since the Ukraine war began. . Traders are currently pricing in five increments of 0.25% each, which will bring the benchmark federal funds rate from its current range of 0% -0.25% to 1.25% -1.5%.

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