Weekly SmartPills #61

Financial Markets

Cryptocurrency Market

Bitcoin remains in the spotlight, recently reaching $97,717 after a slight dip to $94,747 earlier this week. Analysts attribute this fluctuation to ongoing discussions regarding regulatory frameworks and the potential impact of economic policies in key markets. Despite some turbulence, institutional demand remains strong, with major funds continuing to increase their Bitcoin holdings. Ethereum has gained momentum, currently priced at $2,645.78 as of February 10, 2025. This increase is driven by market enthusiasm surrounding the upcoming Shanghai upgrade and the continuous growth of the Ethereum-based DeFi ecosystem. Predictions suggest Ethereum could reach $4,200 by the end of February, provided network activity continues to rise.

Traditional Financial Markets

Global stock markets have shown mixed performances this week. The SPDR S&P 500 ETF Trust (SPY) has dropped to $600.77, down 0.92% from last week. Meanwhile, Microsoft Corporation (MSFT) fell to $409.75, losing 1.45%, while Tesla Inc (TSLA) continued its decline, dropping to $361.62, down 3.46%. In Europe, Italy's FTSE MIB index saw a slight increase of 0.3%, reaching 35,800 points, with strong contributions from sectors such as energy and technology.

Economics and Regulation

The Bank of England has cut interest rates by 0.25 percentage points to 4.5%, signaling further reductions may follow. Despite this, the Bank downgraded its economic growth forecast, predicting the UK will narrowly avoid a recession but face years of weak growth. It also revised its potential growth rate estimate to 0.75% and raised inflation projections. Governor Andrew Bailey emphasized a "gradual and careful" approach to further rate cuts, citing global uncertainties and the need for more disinflation evidence. Financial markets expect up to four rate cuts this year amid the weaker growth outlook.

European Commission President Ursula von der Leyen stated the EU is prepared for "tough negotiations" with Donald Trump to prevent a trade war after his warning of imminent tariffs on EU goods. While emphasizing the importance of EU-US trade ties, von der Leyen underscored the bloc’s readiness to protect its interests and seek pragmatic solutions. She highlighted the stakes for both sides, with transatlantic trade accounting for significant global GDP and jobs. Von der Leyen also urged the EU to adapt to modern geopolitical realities, including building partnerships beyond traditional allies, such as expanding trade ties with China.

Blockchain and Innovation

This week, we focus on DeFiChain, an emerging project leveraging blockchain technology to enable decentralized finance applications on the Bitcoin network. By integrating smart contracts, DeFiChain is bridging the security of Bitcoin with the growing DeFi ecosystem. The project has recently added four new dTokens to its expanding list of decentralized finance tools. With its focus on scalability and low transaction fees, DeFiChain has the potential to drive mass adoption of DeFi solutions.

Trends and Statistics

Which country is projected to be the fastest growing European country?

• The IMF projects UK GDP growth at 1.6% in 2025 and 1.5% in 2026, making it the fastest-growing major European economy among G7 members (France, Germany, Italy).

• Poland's GDP is forecast to grow by 3.5% in 2025 and 3.3% in 2026, the highest among European economies in the report.

• Spain's GDP is predicted to increase by 2.3% in 2025 and 1.8% in 2026, while Turkey's growth is expected to reach 2.6% in 2025 and 3.2% in 2026.

• The Euro area is projected to grow by 1% in 2025 and 1.4% in 2026, with France, Germany, and Italy trailing the UK.

• Russia's GDP is forecast to grow by 1.4% in 2025 and 1.2% in 2026, while the Netherlands is expected to grow 1.6% in 2025 and 1.8% in 2026.