Market Recap: Bitcoin, Ether Drop as US Deploys Troops to Eastern Europe

Bitcoin dropped as much as 5% while ether dropped as much as 5.7% on the day

article-image

Source: Shutterstock

share

key takeaways

  • Crypto markets dropped today on news that the US would be deploying troops to Eastern Europe
  • The Eurozone’s annual rate of inflation rose to 5.1% in January, causing more uncertainty on the overall strength of the economy

US troops deployed to Eastern Europe

President Biden has approved the deployment of around 3,000 American troops to Eastern Europe in an attempt to protect NATO allies in the event of further Russian aggression. Markets dropped steeply on the news, with bitcoin dropping as much as 5% and ether dropping as much as 5.7% on the day.

[stock_market_widget type="accordion" template="chart" color="#5D25E5" assets="BTC-USD,ETH-USD" start_expanded="true" display_currency_symbol="true" api="yf" chart_range="1mo" chart_interval="1d"]

Traditional markets reacted harshly to the news as well, with the S&P 500 dropping as much as 0.50% early in trading hours, only to climb back half a percent in the positive by the end of the day. The Nasdaq followed a similar trend by dropping by about 0.4% and climbing up 0.8% later.

[stock_market_widget type="accordion" template="chart" color="#5D25E5" assets="^GSPC,^IXIC" start_expanded="true" display_currency_symbol="false" api="yf" chart_range="1mo" chart_interval="1d"]

Eurozone inflation

Inflation around the world seems to be skyrocketing as figures come in for late 2021. Recent year-over-year inflation figures in the US show CPI (consumer price index) and PCE (personal consumption expenditure price index) rose to 7.1% and 5.8%, respectively.

The Eurozone's inflation numbers are showing a similar pattern, with consumer prices rising to 5.1% in January, a new record. The trend is likely the result of loosened monetary policy and increased economic stimulus in an attempt to fight the economic downturn caused by the Covid-19 pandemic.

While bitcoin has been heralded as a hedge against inflation and has performed well in the inflationary period that has followed the pandemic, it's unclear how more intense inflation will affect the economy. If prices of goods and services continue to climb at a rate higher than the increase in wages, fewer people will be able to afford to invest after paying for necessities.

Top stories

Story: First Grayscale ETF Begins Trading With Aim of Tracking Digital Economy

  • Top holdings in the index the new ETF tracks include Silvergate Capital, PayPal, Coinbase, Block and Robinhood.
  • The ETF is available on NYSE Arca and carries an expense ratio of 70 basis points.

Story: El Salvador Turns to US Bitcoin Wallet to Revamp Chivo

  • El Salvador has recruited US-based crypto wallet provider to address Chivo concerns.
  • Since leaving, the co-founders had “technical breakthroughs” that Cheng says they wouldn’t have had if they stayed at Meta.

Story: DeFi Technologies Subsidiary Gets Nod to List Solana ETP on Frankfurt Exchange

  • A new exchange traded product that tracks the price of Solana’s native crypto has begun trading on the German exchange Boerse Frankfurt Zertifikate AG.
  • The ETP provides traditional investors exposure to the crypto within a regulated and “fully backed” environment.

Story: India to Introduce a 30% Crypto Tax, Push Out CBDC by 2022-23

  • India’s finance minister announced Monday that the country is looking to tax income received from crypto transfers by 30%.
  • The country also looks set to introduce a CBDC by 2022-2023 with the aim of streamlining India’s currency management system.

Earnings season

Meta (FB) is scheduled to release its earnings report today. The company has pushed further into the crypto industry over the last year, starting with its rebranding from Facebook to Meta and its commitment to the metaverse. The company fell by over 20% in after-market trading leading up to its earnings call.

[stock_market_widget type="card" template="chart" color="#5D25E5" assets="FB" display_currency_symbol="true" api="yf" chart_range="1mo" chart_interval="1d"]

Going forward

While there has been positive news as of late, like India and Russia's decision not to ban cryptocurrency and loads of companies jumping onto the crypto and metaverse train, a heavy uncertainty still hangs over the markets. Many investors seem to be waiting on the Fed's next policy change to combat inflation.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Content Delivery Networks (CDNs) represent low-hanging fruit in a massive market ripe for Web3-driven disruption. The global CDN market was valued at ~$28B in 2024, and is projected to surpass $140B by 2034, (18.75% CAGR) underscoring the immense demand for efficient content delivery.

article-image

Why equities are more stable than in past decades, plus advice from Peter Lynch

article-image

As Permissionless speakers talk on-chain RWA potential, tokenized stock platform Dinari secures FINRA broker-dealer approval

article-image

JavaScript fueled a toxic ad model for the internet, says Brendan Eich, but crypto and privacy tech could help us escape it

article-image

Stablecoin drivers, the SEC’s war on ETH, and how AI is driving crypto

article-image

It took years of struggle to keep encryption free of government control

article-image

Firedancer begins delegating stake to Solana validators