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Weekly crypto news: Ukraine legalizes cryptocurrencies

Weekly crypto news: Ukraine legalizes cryptocurrencies

The past week (March 10 to March 17, 2022) was a volatile one for cryptocurrencies. Bitcoin (BTC) made gains and losses of more than 5% in an hour this week, something we haven't seen for a long time. This volatility had to do with certain news items.

US Fed raises interest rates

Most cryptocurrencies traded higher over the past 24 hours, albeit with large price swings after the U.S. Federal Reserve raised interest rates for the first time since 2018.

The Fed also raised its inflation expectations and signaled plans to raise interest rates six more times this year in similar increments. Low interest rates and central bank stimulus measures actually contributed to the huge increases in cryptocurrencies last year, 2021.

Bitcoin (BTC) fell about 3% immediately after the Fed's announcement, but quickly recovered losses by the end of the day (March 16, 2022). Similar price movements were seen in the S&P 500.

The U.S. central bank also announced that it will reduce its bond holdings balance sheet "at an upcoming meeting," without specifying whether that will happen at the next meeting in May. Analysts expect higher volatility and lower market returns over time as a result of tighter monetary policy.

Ukraine legalizes crypto

Meanwhile, Ukrainian President Volodymyr Zelenskyy on Wednesday legalized crypto in the country. The law defines the legal status, classification, ownership and regulators of cryptocurrencies.

Ukraine has received at least $100 million in crypto donations over the past three weeks from people who want to support Ukraine's defense and help fund humanitarian efforts. It turns out that crypto is much more suitable for global donations than traditional money because it does not require intermediaries.

The latest crypto prices

Many coins outperformed Bitcoin (BTC) on Wednesday, indicating a greater appetite for risk among traders. Avalanche (AVAX) rose 12% in the past 24 hours, compared to a 3% gain in ETH and a 0.5% gain in BTC.

If we look at the past 7 days, we see a lot of volatility, but a slight uptrend in the crypto market. Also if we look at the past month we see a pattern of higher bottoms, which usually signals a positive mood in the market.

Whether this continues remains to be seen, as the world is currently in turmoil, and everything could change within a second.

Luc Smits van Oyen
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