Cryptocurrency Market Moves

In December, the UK Consumer Price Index (CPI) rose by 0.4%, just as expected. This brought the annual CPI inflation up to 3.4%, an increase from 3.2% in November. Core CPI also went up by 3.2%, meeting forecasts. This week, Bitcoin, Ethereum, and Ripple have dropped in value by about 5%, 10%, and 5%, respectively. Bitcoin is now trading below $90,000, while Ethereum and Ripple have fallen below important support levels. These changes indicate a growing decline in these cryptocurrencies. Gold hit a new high near $4,900 before pulling back. Interest in cryptocurrencies is waning, as seen with Binance Coin, which dropped by 1%. President Trump has threatened to impose new tariffs on goods from several European countries, including the UK. These tariffs could start at 10% on February 1 and may increase later. Given these developments, it is essential to do thorough research before making any investment decisions. All financial activities carry risks, including the potential loss of money and emotional stress. Individuals are responsible for their investment choices and any consequences that follow.

Investment Strategies And Geopolitical Concerns

With the December 2025 UK inflation data matching expectations, the Bank of England’s actions seem stable. However, this stability isn’t supporting the pound. Sterling is struggling due to geopolitical risks from potential US-EU tariffs, creating a conflict between economic data and market anxiety. In light of this uncertainty, consider using straddles on GBP/USD to take advantage of any sharp market movements once President Trump clarifies the tariff situation. Gold is clearly benefiting from a “flight to safety,” moving towards $4,900, a level that felt far away just a few months ago. This trend is linked to the new “Greenland tariffs” and is likely to continue until we receive more information, similar to gold’s rise during the early COVID-19 pandemic and the Ukraine conflict. Traders might find it beneficial to buy call options on gold futures for leveraged exposure to further gains, while limiting their maximum loss to the premium paid. On the downside, risk-averse investors are hitting speculative assets hard. Bitcoin’s fall below $90,000 is leading to a broader correction in the crypto market. This situation echoes the rapid sell-offs seen during the 2022 rate hikes when digital assets were closely tied to volatile stocks. The best move now may be to purchase put options on Bitcoin and Ethereum to prepare for a more significant correction if geopolitical tensions increase in the coming weeks. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now