Crypto News: Fearing the future

Welcome to Balance of Power, bringing you the latest in global politics. If you haven't yet, sign up here.

Vladimir Putin's war in Ukraine has been a failure by almost any measure, with his army incurring massive casualties for little territorial gain beyond what it already occupied prior to the invasion almost four years ago.

Worries over growing economic strains in Russia have replaced dreams of victory parades in Kyiv.

Yet it's European leaders arriving at the Munich Security Conference today who are agonizing over the existential military and economic vulnerabilities exposed by Putin's challenge to the post-Cold War order.

The transatlantic alliance with the US has fissured since Donald Trump's return to the US presidency, leaving Europe fearful that it may eventually confront a hostile Russia without American security guarantees.

That's raising hard questions over whether Europe needs its own costly nuclear umbrella.

Nuclear deterrence is set to be a hot topic at the Munich Security Conference, which starts on Friday. Europe depends on the US for its so-called nuclear umbrella, comprised of American weapons based on the continent and NATO's mutual defense pact. If the US can no longer be trusted, Europe is faced with the sinister prospect of being home alone with a neighbor, Russia, that owns the world's largest nuclear arsenal. Bloomberg's Andrea Palasciano reports. — WATCH: Bloomberg's Andrea Palasciano reports on Europe's nuclear dilemma.

States like Germany are committing massive spending on rearmament even as their economies wrestle with the energy shock from the loss of cheap Russian gas.

While Europe's pouring billions into Ukraine's defense, it has little influence on the US-led negotiations for a peace deal.

Ukrainian and Russian military officials have discussed technical details for a potential ceasefire, yet the political logjam remains unbroken over Putin's demands for Kyiv to cede territory that Moscow has failed to conquer.

President Volodymyr Zelenskiy, due in Munich, is under pressure to cut a deal that would turn part of Ukraine's eastern Donetsk region into a free economic zone with US and European guarantees.

Under any likely deal, Putin will retain territory that Russia seized by force. Europeans fear that will set a precedent they're ill-prepared to deter.

"Nobody talks about a just peace," Ukrainian writer Andrey Kurkov tells Bloomberg's Mishal Husain in an interview.

As he says, legitmizing "unjust results" of the conflict and normalizing the sezure of another country's territory will only result in more such wars in the future. — Anthony Halpin

A local resident walks along the E40 highway that connects the cities of Izyum and Slovyansk in Izyum, Kharkiv region, Ukraine. Photographer: Diego Fedele/Getty Images — A local resident walks along a road in Izyum, Ukraine.

Global Must Reads

Trump estimated negotiations with Iran could stretch for as long as a month as he seeks a diplomatic agreement that would roll back Tehran's nuclear ambitions. It will be "very traumatic" for Iran if it failed to reach a deal, he said, a day after Trump met with Benjamin Netanyahu at the White House, where the Israeli leader sought to convince him to endorse a more sweeping rollback of Iran's military influence in the region.

Iranians walk past a billboard showing Iranian supreme leader Ayatollah Ali Khamenei with anti-US rhetoric in Tehran on January 27, 2026. A US naval strike group led by an aircraft carrier has deployed to Middle Eastern waters, the United States said on January 26, 2026, as Tehran warned it was ready to hit back at any American attack launched in response to a crackdown on anti-government protests. (Photo by ATTA KENARE / AFP via Getty Images) Photographer: ATTA KENARE/AFP — A billboard showing Iranian supreme leader Ayatollah Ali Khamenei with anti-US rhetoric in Tehran on Jan. 27.

OpenAI has warned US lawmakers that its Chinese rival DeepSeek is using unfair and increasingly sophisticated methods to extract results from leading US AI models to train the next generation of its breakthrough R1 chatbot, according to a memo reviewed by Bloomberg News. Read our deep dive on how a new generation of Chinese entrepreneurs is challenging US dominance in AI.

Trump stepped up his push for Israel's president to pardon Netanyahu, who's facing charges of bribery, fraud and breach of trust. Isaac Herzog "should be ashamed of himself" for not granting clemency, Trump told reporters yesterday, one day after the Israeli prime minister visited the White House to discuss Iran and Gaza.

South Africa's Cyril Ramaphosa pledged to accelerate measures to fire up the economy and make the government more efficient, including a new company to manage the state's vast property portfolio and deploying the army to help the police combat gang violence and illegal mining. In a state-of-the-nation speech, the president also denounced a shakeup in the global order, delivering a clear rebuke to Trump and his America First policy.

Philippine Vice President Sara Duterte is facing three new impeachment complaints, setting the stage for renewed scrutiny aimed at preventing her from becoming the country's next leader. The accusations range from misuse of public funds to an assassination threat against President Ferdinand Marcos Jr.— claims she denies.

Effigies of Philippine President Ferdinand Marcos (L) and Vice President Sara Duterte are seen as protesters march to congress during a demonstration coinciding with Philippine President Ferdinand Marcos' State of the Nation Address, in Manila on July 22, 2024. (Photo by TED ALJIBE / AFP) (Photo by TED ALJIBE/AFP via Getty Images) Photographer: TED ALJIBE/AFP — Effigies of Marcos (left) and Duterte during a protest in Manila in July 2024.

The UK's top civil servant quit his post after just 14 months, adding to the churn in Keir Starmer's government that had already seen him lose two of his most senior aides this week.

Venezuela plans to grant more oil-production land to Chevron and Spain's Repsol as the Trump administration pushes for private companies to rebuild the nation's energy sector, sources say.

After Beijing slammed them shut about a decade ago, the gates have flung open again for Chinese firms to go on overseas acquisition sprees.

Malaysia's cabinet has ordered an investigation into the allegations surrounding anti-graft chief Azam Baki, days after a report said he had shareholdings that were higher than allowed limits for public officials.

Don't miss from Bloomberg Weekend: Mary Hui and Richard Frost look at what the jailing of Jimmy Lai means for Hong Kong civic life, Chris Kennedy write about how Marco Rubio has emerged as a bridge Between MAGA and the Neocons, and Gait Alstein assesses the impact of Israel's wartime brain drain. Subscribe to the newsletter here.

With an annual budget of more than $1 billion, the International Rescue Committee (IRC) is among the world's largest humanitarian agencies. In this conversation with Mishal Husain its CEO, David Miliband who was once a top British politician, talks about the geopolitical reality of running a humanitarian organisation, UK politics and his own family heritage.

Sign up for the Washington Edition newsletter for news from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television.

Chart of the Day

Trump announced yesterday his administration has rescinded the "endangerment finding," a landmark scientific determination that greenhouse gases pose a threat to human health and welfare. The decision lays the groundwork for unwinding more federal climate regulations including standards for cars and trucks, according to environmental and legal experts, and marks the government's most consequential climate rollback.

And Finally

Dramatic changes are underway at Mecca, an ancient city that's revered by the world's more than 2 billion Muslims as Islam's holiest. Pilgrims these days pass whirring cranes as rows of old red-brick houses, winding alleys and courtyards are bulldozed to make way for luxury towers in a pathway leading to the Grand Mosque. Mecca is also among the world's most sought-after property markets, and is being transformed through a $27 billion project to add thousands of apartments, hotel rooms and a sprawling mall under a program now central to the Saudi Arabian government's economic overhaul.

Old Mecca neighborhoods are being demolished to give way for new and modern developments catering to the rising number of pilgrims and visitors in Mecca. Photographer: Iman Al-Dabbagh/Bloomberg — Old Mecca neighborhoods are being demolished to give way for new and modern developments.

Pop Quiz (no cheating!). Which African nation reintroduced legislation that seeks to jail LGBTQ people? Send your answers to balancepower@bloomberg.net