Last week, in response to Medvedev’s comments, Trump ordered two nuclear submarines to set sail. The tension escalated further today as India faced an additional 25% tax for purchasing oil from Russia. The issue is not limited to India; China is also a significant buyer of Russian oil. Developments of this nature are crucial as they directly impact the cryptocurrency market.
Russia and the United States
Trump recently mentioned that his special envoy, Steve Witkoff, had made significant progress during a meeting with Russian President Vladimir Putin. The White House has been working on secondary sanctions against Russia for some time. Last week, Trump announced a shortened timeline for Putin, with the deadline approaching in two days.
If Putin fails to take concrete steps by Friday, prepared secondary sanctions will be activated, primarily affecting countries purchasing oil from Russia. Today, the world caught a glimpse of these sanctions through the imposition on India, which now faces an extra 25% tax despite recent agreements.
Moscow does not want relations to deteriorate due to secondary sanctions. However, White House officials expect sanctions on countries dealing with Russia to take effect on Friday. This could be a strategy where Trump first implements sanctions and then brings Putin to the negotiating table for a potential step-back.
Ukrainian President Volodymyr Zelenskiy stated that the recent pressures seem to be working and the likelihood of a ceasefire has increased.
“Russia appears more willing for a ceasefire. The pressure is effective. However, it’s crucial they don’t deceive us or the U.S. in details. Ukraine will undoubtedly defend its independence. We all need a lasting and reliable peace. Russia must end the war it initiated.”
While the Kremlin claims punishing countries doing business with Russia is illegal, Trump believes it will serve the purpose of achieving peace. It’s unclear what offer was made to Witkoff to avert Trump’s threat, but the need for clearer signals beyond mere ceasefire indications is evident.
The Fate of Cryptocurrencies
Russian sources believe that the ongoing 3.5-year war and subsequent sanctions are unlikely to have a significant impact on their economy. There is a prevalent notion that Putin shares this belief, but secondary sanctions could severely affect Russia’s exports. Partners like China and India are major buyers of Russian oil, and the imposition of additional tariffs would lead to a cessation of trade, prompting global challenges.
An increase in oil prices might occur, possibly causing Russia to become more aggressive to expedite the resolution. Alternatively, we might witness a powerful bloc forming against the U.S. All these scenarios imply heightened uncertainty, adverse for the cryptocurrency markets.
Therefore, Trump’s announcements regarding Russia, along with Russia’s stance, will play a pivotal role in determining the direction of the cryptocurrency market this week.