Blockchain Advisor | Author | Investor | Board Member | Singapore: Europe rising, Asia watching, Bitcoin sideways, gold shining in a world on edge.
The recent rebound in risk sentiment and US markets, fueled by easing government shutdown fears, highlights the complex interplay of global financial uncertainty, inflationary pressures, and shifting geopolitics.
Last Friday's 2.1% surge in the S&P 500, following a technical recession the previous day, reflected relief over the averted shutdown. However, this optimism contrasts with a significant drop in US consumer sentiment to a two-year low (57.9 in March). Consumers anticipate rising inflation (3.9% over 5-10 years), the highest long-term expectation in over three decades, driven by potential tariff impacts.
The Federal Reserve is expected to hold rates steady at its upcoming meeting, emphasizing a data-driven approach despite inflationary fears and slowing growth. Meanwhile, the 10-year US Treasury yield edged up to 4.31%, indicating investor caution regarding long-term risks, particularly fiscal policy and trade.
Gold surpassed US$3,000 per ounce, signaling investor unease amidst policy uncertainty and potential supply chain disruptions. Brent crude rose to US$71.61 per barrel, driven by tighter supply expectations and OPEC+ production plans, potentially fueling inflation while reflecting sustained demand.
In Europe, German political developments boosted the EUR/USD pair to 1.0876, reflecting confidence in the region's economic stability. Asian equities rebounded, focusing on upcoming Chinese data releases (fixed asset investments, retail sales, industrial production, and home prices) for clues about the health of the world's second-largest economy. The mood in Asia mirrors the cautiously optimistic US relief rally.
South Korea rejects Bitcoin as a foreign exchange reserve due to its volatility and high transaction costs, aligning with IMF guidelines prioritizing liquidity and risk management. This contrasts sharply with the US, where President Trump's executive order establishes a Strategic Bitcoin Reserve, signaling an embrace of cryptocurrency as a strategic asset for hedging against dollar weakness and attracting blockchain investment. North Korea, via the Lazarus Group, has stealthily become a significant Bitcoin holder, amassing 13,562 BTC (US$1.14 billion) through cybercrime, notably a US$1.4 billion heist from Bybit. This highlights the blurring lines between legitimate investment and illicit gain in Bitcoin's global role.
Bitcoin's price remains volatile, eyeing US$86,700 resistance; failure to breach it could trigger drops to US$77,859 or even US$71,011. CryptoQuant analyst Darkfost noted a US$10 billion drop in Bitcoin's open interest between February 20 and March 4 following a record US$33 billion in January, reflecting political uncertainty and a market reset.
The US market's relief rally is likely fleeting, masking deeper economic concerns like plummeting consumer sentiment and rising inflation expectations. The Fed's cautious approach risks being seen as indecision if inflation accelerates. Gold and oil's surge indicate a flight to safety and supply-side anxieties. Bitcoin's divergent reception – rejected by South Korea, embraced by the US, and exploited by North Korea – encapsulates the chaos and opportunity of the digital age.
Investors should proceed cautiously, balancing short-term gains with long-term risks, as the global economic drama unfolds.
sources: https://e27.co/europe-rises-asia-watches-bitcoin-sideways-and-gold-shines-a-world-on-edge