Market Wrap: BTC, Stocks Tank After Biden Says Threat of Russian Invasion ‘Very High’

Threat of Russia invading Ukraine is ‘very high,’ Biden told reporters
Biden is reportedly preparing to order a wide-ranging review of cryptocurrencies next week

Biden says Russia could invade Ukraine 'within the next several days'

US President Joe Biden today said the threat of a Russian invasion of Ukraine is now "very high."

Biden added, "They have not moved any of their troops out. They’ve moved more troops in."

The US leader also said there is reason to believe Russia is engaged in a so-called false-flag operation in an effort to give Russian forces a pretense to invade Ukraine. "Every indication we have is they’re prepared to go into Ukraine," he added.

He was then asked when such a move by Russia was likely to happen, to which he responded, "My sense is this will happen within the next several days."

Crypto and stock markets plunged on the news, with the Dow Jones index suffering its worst fall so far of 2022. The sharp reversal from news earlier this week that Putin was planning to pull troops back from the border has many investors fearful of volatility and anticipating more downward pressure on markets.

Newsletter

Subscribe to The Breakdown

Executive order on crypto may come as early as next week

Sources claim that Biden's administration is preparing to issue an executive order on cryptocurrencies as early as next week. The wide-ranging order will direct various agencies to study different aspects of digital assets.

The US Treasury, State Department and Office of the Attorney General are to study central bank digital currencies (CBDCs). The Financial Stability Oversight Council will review the stability of crypto. The Consumer Financial Protection Bureau is to study how crypto can impact market competition and the Securities and Exchange Commission and Commodity Futures Trading Commission are to look at market protection.

Should such a broad executive order come to fruition, it will speed up the process of crypto regulation in the United States. Some investors welcome crypto regulation and see it as a step of maturity while many fear these different agencies will overregulate the industry.

The combination of regulatory fears and the potential for conflict in Europe hit markets hard. The S&P 500 dropped 2.14% while the Nasdaq and Dow dropped by 2.96% and 1.78% respectively. Crypto markets had an even worse day, with bitcoin falling 7.3% and ether falling by 7.4% by the close of equity markets.

[stock_market_widget type="accordion" template="chart" color="#5B35D5" assets="^GSPC,^IXIC,^DJI" start_expanded="true" display_currency_symbol="false" api="yf" chart_range="1mo" chart_interval="1d"]

[stock_market_widget type="accordion" template="chart" color="#5B35D5" assets="BTC-USD,ETH-USD" start_expanded="false" display_currency_symbol="true" api="yf" chart_range="1mo" chart_interval="1d"]

Going forward

If bitcoin sinks below the psychologically important level of $40,000 — which it was approaching late Thursday — it could heighten pressure on cryptocurrencies, as investors eye the prospect of a deeper slump.

Get the news in your inbox. Explore Blockworks newsletters: