U.S. cryptocurrencies and tech stocks rallied Monday night as a continued run away from risk as a toxic panacea for the global economy holds investors back.
The value of so-called growth assets has fallen especially sharply since the following day US Central Bank raises interest rates last week rose 0.5% and signal that the number is growing as policymakers worldwide grapple with the impact of rising inflation.
There is growing concern that the problem of inflation – made worse by Russia’s invasion of Ukraine – will lead to a recession for major economies as Bank of England warning Last Thursday was a growing risk for the UK.
There was a widespread global sell-off on Monday, also aided by the tightened COVID lockdown in Shanghai and increased curbs in Beijing.
While that forces oil costs down, with Brent crude falling 6% on lower demand expectations, it means BP and Shell lead the FTSE 100 in London down 2.3%.
European markets also posted similar losses, although the tech-focused Nasdaq on Wall Street was down 4% by the end of the session.
That means U.S. equities are generally trending toward their lowest value levels in more than a year, analysts say.
Investors have pulled cash from this year’s pandemic-era darlings amid fears they are overvalued in the face of an easing of public health restrictions in the West and interest rates rise.
Cryptocurrencies feel the pain, too.
Bitcoin, which peaked at $69,000 last November, has since fallen to trading at less than $30,000 on Monday night, according to data from Refinitiv. It was down more than 15% from Friday’s figure.
The FTSE 100, which has outperformed most of the global stock markets this year after it lagged its overall recovery in value in 2021, saw a strong list of mining components. it came under new pressure on Monday.
As of now, it is down just over 2% for the year while Nasdaq has lost a quarter of its value.
As the majority of its member companies are export-focused, the UK’s leading flight index was less affected by the reaction given the Bank of England update as it warned of inflation. growth rate over 10% at the end of the year and the possibility of a recession in the immediate future. .
The pound has felt most of the pain instead – hitting a low against a stronger dollar not seen since the early days of the pandemic at around $1.22. It was also three cents lower against the euro in the past week.
