Markets and news: May 5, 2022

news,

News in brief

  • The Czech National Bank surprised by raising the base interest rate from 5 to 5.75 percent, the highest level since the end of October 1999, while an increase to only 5.5 percent was expected. The CNB’s Bank Board therefore mainly took the view from the new forecast by the bank’s analytical team that inflationary pressures in the Czech economy were even stronger than previously thought, so it was necessary to send out such a strong signal.
  • The US Federal Reserve decided yesterday to raise rates by 50bps to a range of 0.75%-1%. The first non-standard hike in 20 years was widely expected and it was no big surprise. On the other hand, fears that the Fed would raise rates by 75bps did not materialize. Fed chief Jerome Powell was then unexpectedly specific when he said a hike of another 50bps would come over the summer. The moment the triple hike was ruled out, the market began to massively overvalue – the S&P 500 stock index gained 3% in less than two hours, while the dollar weakened.
  • Fuel prices on the Rotterdam exchange mirrored traders’ fears about the impact of the impending EU embargo on Russian oil. The EU is also considering making it impossible to insure tankers carrying Russian oil. Europe is thus threatened not only by oil shortages but also by fuel shortages. For example, almost half of imported diesel fuel comes from Russia.

Crypto markets

  • Total cryptocurrency market capitalization rose by 5.4% as the U.S. Federal Reserve announced it is raising interest rates by 50 basis points, the sharpest since 2000.
  • BTC and ETH rallied on the news, rising about 3.5% and 1.2%, respectively. Cryptocurrencies have recently been trading in line with equities, similar to a big tech stock.
  • Bitcoin is now trading mostly sideways, as well as PlatonCoin, which is without a significant change in the last few days.

Bitcoin (BTC) is now trading at 39,479 USD up by 1,1% in 24h

Ethereum (ETH) is now for 2,927 USD up by 2,2% in 24h

PlatonCoin (PLTC) is now for 0,909 USD no change in 24h

Total marketcap is currently at 1.890 trillion USD up by 2,3% in 24h

(all data valid at the time of publishing, from Coingecko.com)

Crypto news

Opera and crypto payments: Crypto-friendly browser Opera integrated BNB Chain, a decentralized blockchain ecosystem formerly known as Binance Smart Chain, to enable BNB Chain-based decentralized apps (DApps) on Android, iOS and desktop versions of its Crypto Browser. The integration will enable Opera’s 350 million users to purchase the BNB (Build N Build) token with fiat and send and receive it via the built-in Opera crypto wallet, as well as access DApps on the BNB Chain ecosystem. The list includes decentralized exchanges (DEXs) like PancakeSwap, 1inch and BiSwap as well as decentralized finance (DeFi) products like DRIP Venus, Tranchess, Treehouse, ApeSwap and AutoShark Finance.

Elon Musk and investment advice: “Buy shares of several companies that offer service and products that you believe in. Sell them only if you see that the company’s products or services are losing popularity. Do not panic during periods when the market is sinking into panic.” Musk added that such advice, in his opinion, will serve market participants well in the long term.

Gucci and crypto payments: The Italian high-end fashion label Gucci has announced it will begin accepting cryptocurrency payments by the end of the month in five of its United States stores, with plans to extend the service to all of its 111 stores in North America. Gucci will accept 12 cryptocurrencies including Bitcoin (BTC), Bitcoin Cash (BCH), Ether (ETH), Wrapped Bitcoin (wBTC), Litecoin (LTC), Shiba Inu (SHIB), Dogecoin (DOGE) and five U.S. dollar stablecoins, according to Vogue Business.

IMF and Bitcoin as a legal tender: The International Monetary Fund (IMF) has voiced concerns over the Central African Republic’s adoption of bitcoin as legal tender saying it raises a number of challenges for the country and region. The global authority expressed the same concerns that it did when El Salvador adopted bitcoin, namely macroeconomic and legal worries.

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