War in Ukraine continues to dominate the economic narrative
The week in review
With Jason Deane
For the third week running there is only one subject that dominates the Friday update – the ongoing fallout of the Russian invasion of Ukraine.
The media, quite rightly, is focussed on the humanitarian horror that is unfolding within Ukraine’s cities and the plight of the people who live there, so I will not revisit any of these stories here. I have, however, become fascinated with what’s happening from a political and economic point of view.
So much so, in fact, that I published a piece in Medium’s “Politically Speaking” magazine earlier this week called “No way out for Putin, so what happens next?” which quickly became my most read article so far this year by a huge margin.
Economics, is of course, entirely entwined with politics and every country’s economy is also entirely entwined with everyone else’s. For some reason, Putin only now seems to be understanding this.
Russia’s economy has, quite simply, been smashed to pieces in a way that has never been seen before. It is now the most sanctioned country on the planet, relieving Iran of the title. The Moscow Exchange remains shut and the rouble has fallen by 45 per cent.
Given Russia’s loss of around half of its mammoth Treasury reserves due to sanctions, the downgrading of its debt to junk status and the slew of companies now leaving the country, I am genuinely surprised it hasn’t been more. But that is almost certain to come.
In a stark interview with the BBC yesterday afternoon, former Russian Prime Minister Mikhail Kasyanov (2000-2004) fully expected the sanctions imposed so far to “utterly destroy” his country’s economy and that Russia would “default on all debt in 2-3 weeks.” Frankly, he seemed as angry as the rest of us.
The economic impact is already apparent, but it is nothing to what’s coming. Uncertainty and change in the markets is off the scale and, as if to prove the point, some market commentary I did for Coindesk earlier this week concerning gold and Bitcoin was entirely out of date by the time it was published just a few hours later.
Meanwhile, US inflation has just reached yet another 40 year high of 7.9 per cent even before the crisis has been factored in. It seems that numbers in excess of 10 per cent are now not only possible, but may be the norm. And not just in the US.
So where is Bitcoin, the so-called “inflation hedge” during all of this? Well, so far it continues to flounder, being lumped together – quite incorrectly in my view – with risk-on assets and trading in a wide, and unpredictable, range.
But as Putin’s war challenges all that we know about global economics and possibly hastens the fall of at-risk fiat currencies, there are many who will be very grateful of Satoshi Nakamoto’s work in the months and years ahead.
Have a great weekend.
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Yesterday’s Crypto AM Daily in association with Luno
In the markets
The Bitcoin economy
*Definitions and insights can be found at https://bytetree.com/insights/
Total crypto market cap
The total capitalisation of the entire cryptocurrency market at time of writing is currently $1.731 trillion, down from $1.744 trillion yesterday.
What Bitcoin did yesterday
We closed yesterday, March 10 2022, at a price of $39,437.46, up from $39,437.46 the day before. The daily high yesterday was $42,004.73 and the daily low was $38,832.94.
Bitcoin market capitalisation
Bitcoin’s market capitalisation at time of writing is $737.66 billion yesterday. To put it into context, the market cap of gold is $12.65 trillion and Tesla is $866.39 billion.
Bitcoin volume
The total spot trading volume reported by all exchanges over the last 24 hours was $27.730 billion, down from $33.092 billion yesterday. High volumes can indicate that a significant price movement has stronger support and is more likely to be sustained.
Volatility
The price volatility of Bitcoin over the last 30 days is 63.49%.
Fear and Greed Index
Market sentiment today is 22, in Fear.
Bitcoin’s market dominance
Bitcoin’s market dominance today is 43.19. Its lowest ever recorded dominance was 37.09 on January 8 2018.
Relative Strength Index (RSI)
The daily RSI is currently 48.48. Values of 70 or above indicate that an asset is becoming overbought and may be primed for a trend reversal or experience a correction in price – an RSI reading of 30 or below indicates an oversold or undervalued condition.
Convince your Nan: Soundbite of the day
“Bitcoin is a scarcity. Everything else is a commodity.”
MicroStrategy CEO, Michael Saylor
What they said yesterday
The Times They Are a-Changin’…
And legitimacy we will get…
A👏 DOP👏 TION
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Crypto AM: Mixing in the Metaverse with Dr Chris Kacher
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Crypto AM: Events
For those of you who missed the Crypto AM DeFi & Digital Inclusion online summit 2021 – you can now watch the event in two parts via YouTube
Part One
https://www.youtube.com/watch?v=dvqNMNZTIDE
Part Two
https://www.youtube.com/watch?v=WXhX_-Tr5j0
Cautionary Notes
It’s definitely tempting to get swept up in the excitement, but please heed these words of caution: Do your own research, only invest what you can afford, and make good decisions. The indicators contained in this article will hopefully help in this. Remember though, the content of this article is for information purposes only and is not investment advice or any form of recommendation or invitation. City PM, Crypto AM and Luno always advise you to obtain your own independent financial advice before investing or trading in cryptocurrency.
All information is correct as of 08:00 BST