On Friday majority of cryptocurrencies declined as investors keep a close watch and reacted to geopolitical tension rises between Russia and Ukraine. Around 3.6% of Bitcoin went down trading at $42,500.

As per US government officials, before the Winter Olympics are set to end on February 20, a "credible prospect" is there that Russia may invade Ukraine. United States President Joe Biden referring to the warning of invasion which he thinks can start any time, urged the Americans to move out of Ukraine immediately. Although Russia's military activities are going on, currently the U.S has stopped sending troops to Ukraine. Jake Sullivan, the National security advisor, said the probability that Russia will invade Ukraine is high. Although he didn’t confirm about the earlier report made by the US that Russian President Vladimir Putin had made a final decision. In addition to the looming geopolitical crisis, investors are also evaluating the Federal Reserve's next move after the Fed's January inflation report was the highest in 40 years.

"The Russia-Ukraine tensions have hovered over already shaky investor sentiment," John Lynch, CIO at Comerica Wealth Management, said in a note. "Should an invasion occur, we expect a significant bid for US Treasuries, putting demand for yield in direct conflict with the Fed's intentions. Commodity prices may also accelerate, led by oil and gold. The dollar may also catch a safe-haven bid, accelerating commodity inflation."

Around 130,000 troops were being gathered on Ukraine's border by Russia. Kremlin declines to pull its troops away though he says it doesn't plan to invade.

Earlier on Friday 10-year Treasury yield declined to 1.923% from 2.036%. On Thursday, for the first time, it rose more than 2% since 2019.

This week compared to overall crypto, Bitcoin's market capitalization rose above 40%. As a result of bitcoin's lower risk profile compared to alternative cryptocurrencies (altcoins), traders usually overweight bitcoin during market downturns. A 1.5% points decline was seen in The Dow Jones Industrial Average and a 3% down seen in the tech-heavy Nasdaq Composite.

Indrani bose

CBW - External Analyst

INDIA