Europe Crisis and how it is affecting crypto markets
Europe Crypto crisis
Modified Date:- Published Date:-Categories: Cryptocurrency
Europe Crisis andhow it is affecting crypto markets
Just monthsafter the acute adverse impact of the COVID-19 pandemic, Europe isheaded for another economic crisis due to rising inflation, energy crisis andcredit growth in some . Member Country. The situation is starting to take atoll on Euro currency dominance, and equity and cryptocurrency marketsmay be affected.
What’sthe Europe crisis all about?
Europe is currently facing severalmacroeconomic crises, which is clearly evident with the recent decline in thedominance of the euro against the US dollar. While Europe managed tocome out of the pandemic crisis, it ran into more problems after theRussia-Ukraine conflict, in which the European Union, the United Kingdomand the United States announced heavy sanctions on Russia. Note thatRussia is the largest supplier of gas to Europe, accounting for about 43.4% in2020.
Due tosanctions, however, the EU was obliged to cut oil imports from Russia, whichresulted in rising gas prices amid high energy demand. Many businesses arebeing priced amidst high energy costs, and it is feared that closing morebusinesses due to the damage caused by higher energy costs will have asignificant impact on the economy.
Inflation inEurope could be worse for member states as Russia indefinitely shuts offgas supplies to the continent. Winter is just a few months away, which means animminent increase in energy demand. If Europe fails to address theenergy crisis first, there will be a massive increase in energy prices – thatis, hyperinflation.
With thebrewing crisis looming, some of Europe's net importing countries,notably PIGS (Portugal, Italy, Greece and Spain), are running high on debt andrisk defaults. First, the European Central Bank (ECB) will stand up tothese countries and buy out these loans because, overall, the EU is a netexporter, the lifeline for the dominance of the euro.
How the Europe Crisis Affects the Crypto Market
Europe is amajor pillar of the global economy. Europe is a major pillar of theglobal economy. If the EU economy deteriorates amid rising inflation, risingdebt and energy costs, its effects will be felt in many sectors of the world'seconomy, including the equities and crypto markets. According to Coffes,the fall in demand from European regions will hamper global trade.
Theescalation of the crisis in Europe could lead to a decline in thedominance of the euro, which means good for the US dollar. However, therise of the dollar does not bode well for the equity and cryptocurrencymarkets in general. In a recent tweet, former hedge fund manager Raul Palnoted that the US dollar could “really break things” if it continues tomove parabolic.
Speculationsare that Europe may resort to printing more money and enforcing yield controlsto cushion the bond market from killing the entire market.
Europe, Economic crisis, Euro Currency, Cryptocurrency, Russia, European fail, PIGS, ECB, Europe's net, US Dollar