“Fed quells interest rate cut expectations across markets, Web3.0 innovations persist across APAC and LATAM, Willow chips could break cryptocurrency security.”
TradFi & Global Market News
Global Market: S&P 500 & NASDAQ
The December 17 Fed rate decision has reported the worst Fed day market drop since 2001 as both the S&P500 and NASDAQ dropped by 2.9% and 3.6%, respectively, as investors have reduced expectations on future rate cuts as market growth and inflation become increasingly more aligned. Since then, the annual ‘Santa Claus’ rally has helped offset these falls slightly as Big Tech stocks push both indices up by around 1%. One of the surprise stars of this festive period was Broadcom. The semiconductor company’s AI-chip-focused model matches the recent demand for diversity in chip offers for this sector against NVIDIA as analysts remain bullish on the sector’s development for the start of 2025. With steadily strong revenue growth across the last two financial years and recent acquisitions that have bolstered their software and hardware product development, the company has seen its value surge by 40% from 180 to a peak at 250.
The EU gas ecosystem has recently been in the spotlight following a two-fold attack on gas supply from the US and Qatar that may shift their energy supply chain strategy. On one hand, Trump has threatened to impose export tariffs on the EU if it does not comply with increasing its supply from the US. The revenue-driving strategy is made clear as this comes in tandem with their recent import tariffs on Canadian and Mexican imports, which will likely raise gas prices. Meanwhile, their Qatari supply is under siege as their energy minister, Saad al-Kaabi, has made it explicitly clear that they will stop supplying LNG to the EU should they be penalised for non-compliance with the new legislation on carbon emission and labour rights.
Global Market: FTSE100
The typical festive cheer has been insignificant in trying to revitalise UK markets. Recent data has suggested that the FTSE100 is headed for one of its worst weeks after it was revealed the country failed to grow in 2024 Q3. Currently, their stock sticks around 8100, down from the 8350 it was trading at the start of the month but up from 8050 before a small festive rally just before Christmas Eve. Additionally, the government has revealed their fiscal strain as borrowing and monthly retail sales in November both fell short of expectations despite it traditionally being one of the most considerable periods for consumer sales.
One positive development for the nation is the formation of the Industrial Strategy Advisory Council, which will develop an innovation-led long-term growth strategy to hone the country’s competitive edge across up-and-coming growth-driving sectors. Investors should be focused on the UK’s potential to diversify its offerings in the currently underdeveloped semiconductor space.
Automotive News: Nissan & Honda
Nissan and Honda have signed an MOU for a 2026 merger under a new holding company. The goal is to sharpen the competitive edge of what would be the third-largest automotive entity in software development and electrification innovation. For Honda, this merger will help increase economies of scale across production and R&D capabilities, and it makes sense for them to take the lead on this deal.
Meanwhile, despite being one of the pioneering innovators in EVs with the launch of the Nissan Leaf in the early 2010s, it is no secret that Nissan has failed to capitalise on any momentum of being a first-mover in the US market since firing Carlos Ghosn. While denying claims that this is a bailout for Nissan, the face-saving tactics cannot mask the 99% profit decline in 2024 Q1 in the US due to the lack of a competitive hybrid car offering. Furthermore, their sales in China also experienced a significant 24% decline in the same period.
Although their corporate cultures are vastly different, their strengths and weaknesses in the EV value chain are very similar. Hence, it remains to be seen if both companies can find viable synergies.
DeFi & Digital Assets News
Cryptocurrency Market: Bitcoin & Ethereum
Volatility has once again amplified equity market movements in the cryptocurrency space as the Fed decision on rate cut expectations triggered a “crypto bloodbath” last week that resulted in over $1.17billion being liquidated, a decline that has persisted into Monday’s closing. After riding the highs of 106000, Bitcoin has fallen to 94000, with some investors looking as low as a 20000 plummet when accounting for declining global money supply indicators. As expected, altcoins like XRP and SOL have all fallen around 17% since December 17. Ethereum has also fallen significantly from grace, going past 3500 psychological support lines to around 3350 from its highs at 4000. Trading behaviour indicators whales have prevented further declines in valuation, supposedly with a “buy-the-dip” mentality, and they expect the token to recover in the New Year.
Despite low price performance, adoption and societal integration of cryptocurrencies for the everyday man persists. Analysts have been watching the data of “shrimp wallets”, which hold less than 1 BTC in value, as a proxy for retail interest and are expecting to see a surge of 9%. Additionally, this week, the business intelligence software MicroStrategy joined NASDAQ, an index for top non-financial companies. This is a significant move for cryptocurrency as MicroStrategy co-founder has made it clear their success is not from their product but their financial engineering as a Bitcoin securities company. The increased flow of investors symbolically reflects increased indirect adoption of volatile Bitcoins, even across traditional investors who see indices as a risk-hedging device.
FinTech News: Deutsche Bank
Despite poor price performance, Ethereum is still the leader in blockchain layer development. Singapore’s Monetary Association of Singapore (MAS) has been driving an innovative collaboration among 24 financial institutions called Project Guardian to explore the applications of asset tokenisation. Deutsche Bank has used this platform to spin out its solution, Project Dama 2, which explores solutions to improve transaction efficiency in compliance by developing an L2 blockchain on Ethereum.
This product will have an ecosystem of trusted validators and integrated tools for regulators that uphold the system’s risk mitigation goals against interactions with sanctioned transactors while maintaining high transparency. As of December 10, Deutsche Bank has expanded the product’s reach from a proprietary platform into a global corporate banking solution by partnering with Crypto.com to support crypto-to-fiat exchanges in APAC. While an MVP has yet to be launched, the success of this product will undoubtedly encourage further innovations by other banking institutes and solidify the APAC not just as the leader in DeFi FinTech innovations but also as the leading innovation model for other regions to emulate.
Sustainability News: Cardano
From APAC to LATAM, tokenisation innovation has taken multiple forms. In Argentina, Cardano is working to be a base that enables the tokenisation of Lithium, a key resource driving increased EV production. In a collaboration between Atómico 3, Zengate, and Alto Grande Lithium SA, this project is set to increase the liquidity and cost-effectiveness of mining investments by enabling fractional ownership of lithium shares. This solution addresses recent calls for openness to retrace the minerals supply chain journeys so investors canmake verifiably ethical investments.
This project showcases the potential of new economies to develop more eco-friendly projects in a financially inclusive way that makes their economic system more flexible and their society more digitally integrated. LATAM has been very receptive to a Web 3.0-focused financial ecosystem. Argentina has been a big proponent of this movement, introducing Decree 640/2024 to rework the legal system to enable asset tokenisation projects.
In Other News…
Short Updates:
Google – Google has taken a massive leap in quantum chip development with Willow, which enables 5-minute computations that would take existing supercomputers 10 septillion years to execute while having reduced error tendencies than in earlier models. This sets Google on course for its 10-year roadmap before it can even crack cryptographic algorithms. Still, it has already sparked discussions on the actual value of cryptocurrencies’ security features and the potential for ‘quantum-proofing’ these tokens.
WhiteBIT – The cryptocurrency exchange WhiteBIT is working with Visa and Wallester AS to launch a cryptocurrency debit card, WhiteBIT Nova, that enables users to spend cryptocurrencies and earn cashback on their transactions. This will significantly increase the practicality of digital assets as currency for everyday financial activities among retail investors.
Opportunity Spotlight
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