Cryptos Fall As Crude Surges Ahead

Cryptocurrencies lost momentum amidst fresh turbulence in the financial markets as crude oil scaled fresh multi-year highs and Dollar Index touched a 52-week high. Crypto market capitalization ranged between $1.97 trillion and $1.91 trillion in the past 24 hours and is currently at $1.92 trillion, implying a decline of more than 2 percent during the 24-hour span.

Crude surged in the backdrop of the intergovernmental International Energy Agency’s warnings that global energy security is under threat following the Russian invasion of Ukraine. Brent touched a high of $113.93 and WTI touched a high $112.47, triggering fears of a fuel-led flare-up in the inflationary situation and stepping the pressure on central banks the world over, to continue the aggressive inflation-combat stance.

Lingering anxiety on the Fed’s likely stance on monetary policy tightening was exacerbated after data showed that private businesses in the U.S. hired 475 thousand workers in February which indicated a strong labor market. Markets had factored in a 388 thousand rise. The Fed Chair Powell’s testimony later in the day would be keenly watched for monetary policy cues.

Dollar Index, which measures the Dollar’s strength against a basket of 6 currencies touched a 52-week high of 97.83 and is currently at 97.57. Dollar-denominated prices of cryptocurrencies move inversely to the Dollar.

Stock markets in Asia slipped while Europe recovered after initial losses. American stock futures are in mildly positive territory.

Bitcoin is trading at $43,254, after falling 2.11percent from the levels 24 hours ago.

Ethereum has shed 2.45 percent in the past 24 hours and is hovering around $2942.

7th ranked Terra (LUNA), 8th ranked Solana (SOL), and 23rd ranked Near Protocol (NEAR) are the only cryptocurrencies in the top-25 category to continue in overnight positive territory.

Meanwhile, the CME Group, the world’s leading derivatives marketplace, on Wednesday announced plans to launch options on Micro Bitcoin and Micro Ether futures on March 28. The new options contracts would be one-tenth of their respective underlying tokens in size and would offer a wide range of market participants more ways to manage the exposure to the top two cryptocurrencies.

While the war has spurred a greater use of crypto in the war zone, it also has stirred a fear among crypto holders on the extent of financial sovereignty that crypto holdings actually provide in a sanctions-dictated world order.

But the larger crypto world would be more concerned about the impact of war on crude prices, crude prices on inflation, fuel-fed inflation on interest rate liftoff, and the impact of interest rate tightening on valuations of risky assets including cryptocurrencies.

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