The western-centric global financial landscape just got flipped upside down. The U.S. dollar is crashing, gold prices are skyrocketing to record highs, and geopolitical tensions are boiling over. China has promised to take revenge on countries that side with the U.S. in trade skirmishes. This pledge complicates an already risky economic environment. Today’s cryptocurrency market is quickly adapting to both global and national dynamics. At the same time, it continues to grapple with issues of its own, including hard forks, scalability discussions, and community contests. This perfect storm of factors—which include war, skyrocketing costs, inflation, supply chain issues—spells a dangerous, unpredictable situation for investors all North Carolina.

Economic Indicators Signal Uncertainty

The Dollar Index just hit a three-year low of 98.00—the latest in an ongoing trend showing the dollar’s dramatic decline in burnished strength. This decline can be attributed, in part, to statements made by National Economic Council Director Kevin Hassett regarding former President Trump's trade intentions. Markets reacted immediately and dramatically, with investors dumping the dollar and U.S. stock futures late Sunday into early Monday.

Gold has shined as a safe-haven investment, recently hitting record highs over $3,400 per ounce. Investors are rushing to gold as a safe haven, a hedge against economic instability and currency debasement. This is all part of a larger pattern of emerging markets’ fear in currency and commodities as the latest sign of a rough global economic blip.

Economic indicators present a mixed picture. The Composite PMI remains at 2.7%, but the Services PMI Estimate is at 50.2. These numbers point to a weak economic recovery, with the growth of the service sector all but keeping the economy afloat. These influences are making for a deep sense of caution and uncertainty that is currently cascading through the financial markets.

Crypto Networks Prepare for Hard Forks

The cryptocurrency world is currently buzzing with excitement as multiple large blockchain networks get set for major upgrades. Save the date! The BNB Chain (BNB) will hard fork on April 29. Such a major and exciting update would not only add new features, but improve performance and security. Hard forks are inherently contentious and complicated events requiring precision coordination, or else risk ugly outcomes, including network fragmentation or split.

In a similar vein, the Gnosis Chain (GNO) will trigger the Pectra hard fork on its mainnet at slot 21,405,696, epoch 1,337,856. This upgrade is set to deliver several improvements to the Gnosis Chain’s functionality and efficiency. These hard forks demonstrate the ongoing development and evolution within the blockchain space, as networks strive to improve and adapt to changing needs.

These upgrades usually come with a level of risk, as unexpected obstacles may occur during the rollout. Yet, as we argued in our previous post, they’re crucial to ensuring blockchain networks are long-term, sustainable and competitive. The cryptocurrency community at large will be paying close attention to these hard forks to measure their effects on their respective ecosystems.

Ethereum's Scalability Debate Intensifies

A substantial debate continues within the Ethereum community as to what’s the best way to scale the network. Uniswap founder Hayden Adams recently warned that Ethereum could fall behind Solana if it reverts to relying on the layer 1 blockchain instead of layer-2 scaling solutions. His comments highlight the critical importance of addressing Ethereum's scalability challenges to maintain its dominance in the decentralized application (dApp) space.

Layer-2 solutions such as rollups take transactions off the main chain. This method helps to vastly decrease the congestion on the core Ethereum network. These layer 2 solutions have gained tremendous traction, but some detractors argue they introduce unnecessary complexity and fragmentation to the Ethereum ecosystem. The issue of how to best scale Ethereum has become a highly contentious battle line. As the network comes under further strain from growing demand, debate will obviously persist.

The Ethereum to Bitcoin ratio is now at 0.1873 (0.54%). This metric is indicative of how well Ethereum is doing compared to Bitcoin. The ongoing discussion around scalability solutions and the rise of other layer-1 blockchains that compete with Ethereum may make this ratio look different in the future.

Bitcoin's Dominance and Network Health

Bitcoin has managed to stay on top as the most dominant cryptocurrency, currently at 64% dominance (0.23% ▲). This drop is largely a reflection of Bitcoin’s dominance in the total cryptocurrency market capitalization. Even with the birth of thousands of other cryptocurrencies, Bitcoin is still the most popular and best recognized digital currency.

The Bitcoin network’s overall health can be measured by a number of key indicators. The hashrate, an indicator of the network’s total computational power, today reached an all-time high at 858 EH/s (seven-day moving average). Numerous studies have demonstrated that a high hashrate means higher security and resilience against attacks of all natures. The hashprice —revenue miners earn per unit of hashing power—is $45.22.

Total fees accumulated on the Bitcoin network so far today are 5.48 BTC, or $479,045. These fees are set by users, who pay them to ensure that miners include their transactions in the next block. The positive factors behind the Bitcoin network’s strong infrastructure and widespread adoption keep boosting its supremacy in the crypto market.

Manta Network Engages with Community

Manta Network is planning to hold a town hall meeting with its founders, on April 23. This community event is an opportunity for members of the public to engage directly with the project team. You will have an opportunity to ask questions and provide your own reactions! Open town hall meetings are a proven way to promote transparency and earn trust from the cryptocurrency community.

Developments such as Manta Network have crucial importance to the larger cryptocurrency ecosystem. Through activities like these and actively listening to their communities, they’re helping create a more collaborative and informed environment. These conversations powerfully influence the direction a project is allowed to develop. They help to make sure that projects are built with the end user’s needs and expectations in mind.

The Cryptocurrency space is built on the foundation of community engagement. Efforts like Manta Network’s town hall meeting are important for building this feeling of ownership and driving participation. These experiences fortify and clarify projects increasing their resiliency. They prepare, deepen, and strengthen teams to meet the challenges and seize the opportunities within the rapidly changing cryptocurrency ecosystem.

Geopolitical Tensions Escalate

China has chosen to take retaliatory action against states that join the U.S. in seeking to isolate Beijing. This announcement is just further salt in the market’s wounds as the trade war rages on. Second, this escalation of geopolitical tensions adds a layer of uncertainty for investors. Worrying is the potential for trade disruptions and economic sanctions, which further complicates the global financial outlook.

Geopolitical undercurrents can have a tremendous impact on financial markets. They have powerful effects on currency values, commodity prices, and stock market performance. Investors are definitely looking beyond these recent developments and re-evaluating their strategies as such. The combined effects of economic indicators, geopolitical events, and emerging technologies make for a volatile, high-stakes environment.

As you can see here, the entire cryptocurrency market is not invulnerable to these geopolitical factors. As a global and largely decentralized asset class, cryptocurrencies are vulnerable to shifts in trade policy, regulatory environments, or political upheaval. America’s investors in the cryptocurrency space will have to stay on their toes and be prepared to pivot as the geopolitics are reshaped.