“Stability” and “Regulation” Will Be Key for Crypto in 2022

31 January 2022, 01:53

After a boom in 2021, cryptocurrencies are now experiencing massive drops from record highs, prompting regulators worldwide to reconsider their stance on the highly volatile asset. While China has issued an outright ban last year with Russia proposing the same recently, other authorities have taken to seek stability. The White House, under the Biden administration, is preparing to release a strategy aimed at regulating crypto. The move will “assess the risks and opportunities” that cryptocurrencies provide; review their impact on financial stability, and attempt to standardise regulations with other countries. Other countries that have implemented, or are eyeing more thorough regulations include Singapore and Hong Kong.

Russia-Ukraine tensions stoke volatility in the markets

Tensions between Russia and Ukraine has led to pressure on European indices, and more turbulence in an already shaky global market. As Russian military presence increases along the Russia-Ukraine border, mounting fears of conflict have led to a sell-off in the global markets, with the UK’s FTSE 100 hitting a one-month low. Commodities have also taken a hit, with wheat and energy prices particularly affected.

Earnings season: highs and lows in tech

Despite posting earnings that beat analyst estimates on 20 January, Netflix stock tumbled to its lowest since April 2020 on projections of weak subscriber growth. The company has experienced a turbulent week, rising 10% at the news that billionaire Bill Ackman bought a $1.1 billion stake. Meanwhile, Meta Platforms’ stock dropped over 20% after reporting weak earnings and its first-ever decline in Facebook’s userbase. Adding to the poor performance was the $10 billion in losses from Meta’s metaverse division, Reality Labs.