The raging Bitcoin rally just came to a crashing halt as its price fell from $40,000 even as the economy braced itself for even more financial aftershocks from the ongoing conflict in Ukraine. This is just the latest in a series of peaks and drops for the world’s leading cryptocurrency, seeing how it leaped from $38,000 to more than $45,000 earlier in the week.
As global markets opened on Monday, March 7th, Bitcoin opened at just $37,960, but market watchers feel that the price might go either way depending on the conflict’s progress in the Balkans.
The State of the Economy in Europe
The tension of the ongoing Russian invasion of Ukraine could also be felt in other areas of the financial sector. The Nasdaq, the world’s leading tech stocks index, was down by 2% as trading closed for the week. On the other hand, Standard and Poor (S&P) was off by 1%.
Overseas, European indexes were in worse shape as trading ended on Friday, March 4th. The French CAC 40 was down by 5%, while the German DAX dropped by 4.4%. Not even the Italian stock exchange was spared as it dropped by over 6% at the end of the trading week.
Developments in the US Economy
Meanwhile, US Federal Reserve chief Jerome Powell expressed his concerns regarding the impact of the Russian invasion of Ukraine in a statement released on March first but also vowed a 25 basis point rate hike within the month.
Likewise, the US Central Bank has enough resources to tighten its monetary policies, but it got a boost thanks to the non-farm payroll report released last week. According to the US Labor Department, the employment sector got a boost from 678,000 new positions filled as of the end of February, bucking previous projections of just around 400,000.
Complicating market issues further is a recent Bloomberg report which stated that the Biden administration was mulling over plans to ban oil imports from Russia. The US Congress has put this on the fast track for approval to punish Putin and the Kremlin for their punitive move into Ukrainian territory. The White House balked at the possibility of the ban earlier, but growing public outrage against the Russian invasion has prompted lawmakers into action.
At present, talks are ongoing between the Biden administration and representatives from the American oil and gas industries regarding the potential impact that an all-out ban on Russian oil imports will have on both the domestic economy and the global fuel supply.
