Trump’s Crypto Push Reshapes Markets

CRYPTO
Trump’s Crypto Push Reshapes Markets

Trump’s pro-crypto stance is reshaping global finance, pushing banks and investors deeper into digital assets, says Bitpanda CEO Eric Demuth. Unlike the retail-driven 2021 bull run, the 2024 cycle is fueled by institutional capital, or “sticky money,” signaling a maturing market.

Bitcoin ETFs now hold nearly $58 billion, reflecting long-term confidence. U.S. banks are accelerating crypto adoption, with stablecoins and tokenized assets expected to surge. Demuth believes regulation will soon drive wider altcoin adoption.

Bitpanda, one of Europe’s largest exchanges, recently secured U.K. FCA approval and is expanding B2B services, licensing crypto infrastructure to banks in Europe and the Middle East. Institutions like Deutsche Bank are already leveraging its technology.

Demuth argues that with crypto now a core pillar of U.S. economic policy, global markets must adapt. “The Trump administration is forcing everybody to do this—it’s not optional anymore,” he said at Consensus Hong Kong.

TECH
Big Tech Sparks Power Grid Debate

AI-driven data centers have grown exponentially, now rivaling small cities in size. As tech giants compete to develop advanced AI models, the U.S. government is pushing to keep these massive infrastructure projects domestic. This has triggered a surge in electricity demand, with utilities, particularly in the South, eager to attract data center investments.

Entergy, a Fortune 500 utility, has secured major deals with Meta and AWS, capitalizing on the boom. Meta’s $10 billion Louisiana data center will require three new gas plants, sparking debate over utility profits and regulatory oversight. Critics argue that utilities like Entergy prioritize profit-driven expansion over consumer protection, with concerns that ratepayers could bear the costs if contracts fall through.

Despite uncertainties, utilities remain aggressive in pursuing AI data centers, even as questions arise about power grid capacity. With demand surging, the race to secure long-term deals continues, shaping the future of AI infrastructure and energy markets.

ECONOMY
Japan’s Inflation Hits Two-Year High

Japan’s headline inflation rose to 4% in January, up from 3.6% in December, marking a two-year high and staying above the Bank of Japan’s 2% target for 34 consecutive months. Core inflation, excluding fresh food, reached 3.2%, the highest since June 2023, while core-core inflation, which also excludes energy, inched up to 2.5%.

The rising inflation strengthens the case for BOJ rate hikes, with policymakers warning of yen depreciation and excessive risk-taking. BOJ Governor Kazuo Ueda signaled readiness to increase government bond purchases if yields spike, while board member Hajime Takata suggested further rate hikes may be needed.

Japanese 10-year bond yields, which hit a 15-year high earlier this week, eased slightly on Friday. Meanwhile, strong GDP growth in Q4 2024 has fueled speculation that the BOJ may act sooner, with analysts projecting rate hikes in June and December, potentially pushing the terminal rate to 1.5% by 2027.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.