Market Wrap: Gold, Oil Push Higher While Crypto, Stocks Continue To Tumble

Secretary of State Blinkin revealed that the US was seeking to ban Russian oil imports, sending oil prices to their highest since 2008




key takeaways

  • Oil has pushed to its highest price since 2008 as US and European allies look to ban Russian imports
  • Bitcoin’s correlation with safe havens early last week was fleeting, with bitcoin dropping off some 21.4% year-to-date while gold has posted a gain of 11% in the same time

As the US and its European allies moved to ban Russian oil imports, stocks and cryptocurrencies both continued to decline.

Crude, meanwhile, jumped to its highest price since 2008 as investors priced in the lack of Russian oil. WTI Crude jumped 4.4% on the day, closing at $119.

US Secretary of State Antony Blinken said Sunday that the Biden administration is "talking to our European partners and allies to look in a coordinated way at the prospect of banning the import of Russian oil, while making sure that there is still an appropriate supply of oil on world markets."

Gold also continued its climb amid the market uncertainty. Since Russia invaded Ukraine, gold has increased by 4.6%.

Increasing oil prices and the continued conflict in Ukraine are likely culprits for Monday's sell-off. The S&P 500 dropped by close to 3%. The Nasdaq dipped 3.75%, and the Dow lost nearly 800 points with a 2.37% fall.

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Bitcoin seems to have lost its brief correlation to gold early last week. Initially, it seemed like bitcoin's use case as an anti-censorship tool and means for escaping the falling value of the ruble would help reform its narrative as digital gold.

Instead, bitcoin and other crypto assets have continued to fall along with equity markets, suggesting that speculation is still the main driving factor in its price swings. Bitcoin shed $600 with a 1.59% drop by the close of stock trading. Ether fell by 2.79%, losing just over $70.

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Top stories

Story: Espresso Systems Launches to Public Amid a $32M Raise

  • The company will use the capital to grow the team and its products, including its Ethereum Virtual Machine application
  • Espresso plans to create bridges between Ethereum and other major chains so the line between layer-1 and layer-2 can be “blurred,” its co-founder and CEO told Blockworks

Story: Planned VanEck ETF Aims To Invest in Miners — Both Crypto and Gold

  • VanEck proposed an ETF in December that would invest in futures contracts and investment offerings linked to gold or bitcoin
  • Investors who buy bitcoin and those who buy gold are “very different,” crypto editor says

Story: Morgan Stanley Increases GBTC Shares, SEC Weighs ETF Conversion

  • The Morgan Stanley Growth Portfolio held 4.3 million shares of GBTC, as of Dec. 31, the most of any of the firm’s funds
  • Coinbase and BlockFi executives are among the most recent authors of letters to the SEC supporting GBTC’s conversion to an ETF

Story: Immutable Notches $2.5B Valuation After Series C Funding

  • Staff will go from 170 to 350 full-time employees over the next year, co-founder Robbie Ferguson told Blockworks
  • Immutable raised $60 million in Series B funding in September

Going forward

Bitcoin's correlation to gold was short-lived, suggesting that much of its run-up during the initial phases of the Ukraine conflict were traders speculating that it would get more use. Time will tell if individuals in Russia and Ukraine begin using it as a means for wealth storage.

Investors should expect volatility leading up to the Fed's mid-March meeting where the regulator will set interest rates.

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