The Russian economy is facing new challenges, showing signs of strain after more than two years of war and sanctions.

The Biden administration’s recent decision to impose stricter sanctions on Gazprombank and over 50 other financial institutions has triggered this downturn. Gazprombank was previously excluded from sanctions to facilitate energy payments, crucial for Russia’s export revenue.

This week, the ruble fell to its lowest value in 32 months, trading at approximately 108 rubles to the dollar. The Russian central bank intervened to stabilize the currency by halting foreign currency purchases, a move aimed at addressing the shortage of hard currency in the market.

President Putin assured the public that the economic situation was under control, although Economy Minister Maxim Reshetnikov acknowledged the need to adapt to the new sanctions.

Concerns about trade disruptions have arisen, and analysts note that Russia may face increasing difficulties as the conflict continues. The new sanctions are expected to impact trade routes further.

Inflation in Russia is high, running at over 9%, with consumer prices increasing significantly. The central bank’s response has included raising interest rates to combat inflation, which is anticipated to rise further next year.

Despite these challenges, experts believe Russia is not facing an immediate crisis. However, the prolonged war will likely strain economic resources, leading to critical trade-offs in government spending and social services. Public sentiment remains anxious as citizens closely monitor currency fluctuations.

November 2024 saw significant shifts in global markets following Donald Trump’s U.S. election victory on November 5.

Wall Street experienced a rally, and the dollar gained against major currencies due to Trump’s tariff policies, which affected European exporters and boosted U.S. stocks.

However, concerns loom for December, as market complacency may lead to volatility amid potential inflation and supply chain disruptions.

The euro faced its most substantial monthly decline since early 2022, primarily due to U.S. tariff risks and economic concerns in Europe. Analysts predict continued fluctuation in currency markets.

Crypto surge

In cryptocurrency, bitcoin surged by 37%, reaching near $100,000, driven by expectations of favorable regulations under Trump, despite concerns about potential speculative excess.

The Nasdaq 100 performed well, bolstered by strong performances from Tesla and Nvidia. Nonetheless, fears about supply chain disruptions from tariffs are growing, prompting cautious investment.

U.S. bank stocks rose significantly, with expectations of deregulation under Trump’s administration, contrasting with European banks’ struggles amid economic weakness.

Bond markets diverged, with U.S. yields trending higher due to inflation and fiscal policy outlooks, while German yields decreased, reflecting a weakening economy in Europe.

Bitcoin has rebounded above $96,000, recovering from recent declines.

The cryptocurrency rose 5% to $95,886.00, while ether increased over 8% to $3,591.33.

The CoinDesk 20 index for the broader crypto market also saw a 5% gain.

Typically, bitcoin trades alongside the stock market, but on Wednesday it diverged from the Nasdaq Composite, which fell 1%. The Dow Jones and S&P 500 similarly experienced drops.

Crypto benefits

Leading cryptocurrency stocks benefited from bitcoin’s rise. Coinbase was up over 5%, Robinhood gained 4%, and MicroStrategy advanced 10%.

Bitcoin has consistently set new records since the November 5 presidential election, increasing about 38% since then. It reached nearly $100,000 before testing the $90,000 support.

Alex Thorn from Galaxy Digital indicated that the bitcoin bull market remains strong, acknowledging potential corrections.

He signaled the role of institutional and corporate adoption, along with favorable conditions under the upcoming administration.

Katie Stockton from Fairlead Strategies noted that bitcoin investors are in unprecedented territory, with no clear resistance levels above. Current support is about $74,000, following bitcoin’s record of $92,000 on November 13.