Market Round Up 3/7

Bitcoin Soars as Russia’s Ruble Collapses

Due to international sanctions against the country, Russia’s Currency, the Ruble, has fallen significantly. On Monday, the ruble fell to a value that was less than one cent compared to the US dollar. Russian citizens affected by these sanctions have found that crypto-currency has provided a unique solution to their problems. With the decentralized nature of crypto, Russian citizens have been able to soften the economic impact of the Ruble’s declining value.

According to CoinDesk, trading volumes between the ruble and bitcoin reached a nine month high on March 1st, but this isn’t the only area where crypto is in high demand. In Ukraine, reports have shown that over 30 million in crypto has been donated to relief efforts towards the country. Donors say that crypto allows for more convenient donations, allowing donations to be sent directly to relief agencies and cutting out the need to make any currency conversions.

Overall, crypto has provided a great solution to problems presented by sanctions and wartime economic downfall. In reality, Russia and Ukraine’s citizens have been involuntarily brought into this conflict and deserve aid and a chance at stability. Cryptocurrencies have given these citizens a resource that allows them to keep their finances safe from the instability of centralized currency.

Fitbit Recalls Almost 2 Million Watches

Almost 2 million Fitbit watches have been recalled after problems with the product’s lithium ion battery posed burn hazards for customers. About half of these recalled products were sold by US retailers from September 2020 to December 2021. Production of the product has since been discontinued.

Fitbit is no stranger to recalls- in fact, just 8 years ago, the Fitbit Force was recalled in 2014 when customers complained about severe rashes after wearing their watch. Overall, Fitbit had just over 10,000 reported injuries due to the complications with the Fitbit Force. The current recall on Fitbit’s iconic model, however, has only had about 115 reported injuries thus far.

Following the recall, Fitbit has since issued a statement urging customers to stop using the watches. Any owner of the Fitbit Iconic can contact Fitbit to receive a pre-paid label and a full refund of $299. In addition, all affected customers will receive a 40% off coupon for any other Fitbit device.

In January, Google purchased Fitbit for a total of $2.1 billion in an attempt to get into the smart-watch business. The Iconic was meant to be a direct competitor to the ever-popular Apple Watch, however, this recall was a major setback for the company.

Gas Prices Still Rising

As demand grows and the supply chain recovers, gas prices have gone up twenty cents in the past week. The national average price of gas is now $3.78 per gallon according to Patrick De Haan, head of petroleum analysis at GasBuddy. In the past year, gas prices have risen almost a dollar per gallon, and they are not expected to go down anytime soon.

With so much going on, it can be hard to understand why gasoline prices are rising. In our research, we have found that these three contributors have presented major challenges leading to the price of gasoline:

1. Federal Reserve Interest rates are on the rise too.

January saw the highest month of inflation in over 40 years. According to financial journalist Matthew C. Clien, thirty percent of excess inflation is due to rising oil prices.

2. Sanctions on Russia lower gasoline supply.

Russia supplies 12% of the world’s oil. Last week, Brent crude oil rose to its highest level in 10 years to almost $120 a barrel.

3. Oil Companies are still recovering from the Covid-19 Pandemic.

In March of 2020, the demand for crude oil collapsed due to lockdowns, crashing the U.S. shale industry. As the demand increases, the few shale companies that survived the pandemic are having trouble keeping up.

Unfortunately, these extenuating circumstances will continue to affect the price of gasoline for the foreseeable future. AAA predicts that the price per gallon will rise to $5.00 per gallon in the next few weeks.

On a more positive note, however, challenges in gasoline prices have only encouraged climate policies within the United States. If oil accounts for such a high percentage of the current inflation rate, it will encourage many companies to step towards more climate conscious power resources within transportation such as electrified vehicles and zero-carbon electricity.