top of page

The Russia-Ukraine Conflict Heats up as Macro Headwinds Strengthen

GB Market Commentary 17/02/2022

by Marcus Sotiriou


Bitcoin has failed to reclaim the $44,000 level, as it dropped this morning to around $43,000, partly due to increased fear of war between Russia and Ukraine. Even though no casualties have been reported, according to the Organisation for Security and Cooperation in Europe, there have been multiple shelling incidents along the line of contact between Ukrainian forces and Russian-backed rebels this morning. Russians have accused Ukrainian forces of conducting the mortar attacks, while Kyiv then accused the Russians of using artillery, as a kindergarten has been shelled.


Yesterday’s release of the FOMC minutes from the January 25th-26th meeting was, as expected, no surprise to the market. The minutes showed a continuation of a hawkish stance from the Federal Reserve though, as inflation and supply chain issues "would likely warrant a faster a pace of balance sheet runoff than during the period of balance sheet reduction from 2017 to 2019." This confirmation of aggressive tightening in the near future, in addition to fears surrounding Russia and Ukraine, creates significant headwinds for global markets over the upcoming weeks/months.


The Vice Chairman of Berkshire Hathaway, Charlie Munger, criticised the cryptocurrencies yesterday in an interview. He claimed, “it is an ideal currency if you want to commit extortion or kidnapping” and said “why would a country want untraceable technology to come into the payment system, run by a bunch of people who just want to get rich quick?”


Even though Munger is one of the greatest investors of all time, he has not been an expert in the field of technology, and research suggests he may be wrong about the crypto industry. According to Elliptic, illicit activity accounts for less than 1 percent of transactions. Furthermore, scams make up most of the cryptocurrency related crime — not money laundering or other unlawful activities. In addition, cryptocurrencies are actually easier to trace than traditional payment methods because transparent public databases exist for most transactions.



Munger’s company, Berkshire Hathaway (owned by Warren Buffet) has bought $1 billion worth of stock in a digital bank called Nubank that focuses on crypto, as it allows users to put money in a Bitcoin exchange-traded fund (ETF). At the same time, the company sold $1.8 billion and $1.3 billion in Visa and Mastercard stocks respectively. This is a clear sign that although Munger has negative views on crypto, his company still wants exposure to the fastest growing asset class in history. I expect many traditional investment firms with similar views to follow suit, as the industry is now far too big to fail. At this point, you could argue it is riskier for a wealth manager to have no exposure at all rather than having a small allocation.

Commentaires


GB_CC_May_Digital Asset Trading_Whiteout
  • LinkedIn
  • Twitter
  • Facebook
  • Instagram
  • YouTube
  • telegram logo

GlobalBlock EU ApS is a company incorporated and registered in accordance with the applicable laws of the Kingdom of Denmark as virtual asset service provider, with registration number (CVR-number) 45126382. GlobalBlock EU ApS is wholly owned by GlobalBlock Holdings., a company registered in England and Wales with registration number 15929099 . GlobalBlock EU ApS is not a licensed financial services provider and is not supervised as such by the Danish Financial Supervisory Authority. GlobalBlock EU ApS is supervised with respect to anti money laundering by the Danish Financial Supervisory Authority within the scope of the Danish Act on Prevention of Money Laundering and Terrorist Financing and other legislation stemming thereof.

.
GlobalBlock Europe, UAB is a company incorporated and registered in accordance with the applicable laws of the Republic of Lithuania as a virtual currency depository wallet operator and virtual currency exchange operator, with registration number 306045642. GlobalBlock Europe, UAB is wholly owned by GlobalBlock Holdings Ltd., a company registered in England and Wales with registration number 15929099,  GlobalBlock Europe, UAB is not a licensed financial services provider and is not supervised by the Bank of Lithuania. GlobalBlock Europe, UAB is supervised by the Financial Crime Investigation Service under the Ministry of Interior of the Republic of Lithuania within the scope of the Law on Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania and other legislation stemming thereof.
 
Investors should be aware that cryptocurrencies are volatile investment instruments that carry a high degree of risk to the capital investment. The information in this website is not intended and should not be construed as an offer, solicitation or recommendation to buy or sell any specific investments or participate in any specific investment (or other) strategy. The products and services outlined on this website may not be suitable for all types of investors. The value of an investment can go down as well as up, and you may not get back the amount you originally invested. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved. Before trading, please take into consideration your level of experience, investment objectives, and seek independent financial advice if necessary. It is your responsibility to ascertain whether you are permitted to use the services of GlobalBlock Europe, UAB based on the legal requirements in your country of residence. The information in this website is for information purposes only and is subject to change. No part of this website can be reproduced without written permission.


 Client fiat is held with GlobalBlock in accounts with BCB Limited,and does not meet the definition of Electronic Money (e-money). Client fiat and cryptocurrency are not “safeguarded” nor covered by any compensation scheme. Clients could potentially lose their cryptocurrency or fiat if something were to happen to GlobalBlock or, BCB.

Cryptoasset Notice

Cryptoasset services are provided by GlobalBlock Europe, UAB (“GlobalBlock”).   Cryptoassets are not regulated in any jurisdiction and the value of your assets can increase or decrease. You should note that your cryptoasset profits may be subject to Capital Gains Tax.

The service you obtain through the website or the app in the UK, contains cryptoasrvices not regulated by the Financial Conduct Authority. Please be aware that:

  • You will have no recourse to the Financial Ombudsman Service in the event of a complaint relating to cryptoasset services.

  • Your cryptoasset account is not protected by the Financial Services Compensation Scheme.

  • Cryptoassets may experience frequent price volatility resulting in a high degree of risk.

bottom of page