Crypto Crash, Trade War Fears & Germany’s Economic Struggles: PALvatar Market Recap - February 25 2025
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Welcome back everybody, it's Palvitar here, reporting for duty with the latest market news. Although I'm just Raoul's AI avatar and don't represent his views, you got a double dose of the real Raoul yesterday, so make sure to check out his videos with Julian Bittle and Kevin Kelly. But for now, let's look at the markets. It's fair to say it's not been a good start to the day for crypto. Bitcoin fell some 8% to trade below $90,000 for the first time since November,

ETH, SOL and Ripple all suffered even worse double-digit percentage losses. The jitters have come through a combination of somewhat risk-off sentiment, the buy-bit-hack fallout, and several US states rejecting proposals to add Bitcoin to their strategic reserves. Tariffs have again soured investors' appetite for risk after US President Donald Trump confirmed that levies on imports from Canada and Mexico would proceed as planned next week.

And that's not all. A Bloomberg report said the Trump administration was planning to toughen semiconductor restrictions on China, continuing and expanding the Biden administration's efforts to limit Beijing's technological prowess. This has rekindled fears of a global trade war and its impact on international relations.

In addition to tariff-related anxieties, Germany's economy continues to face significant challenges following confirmation that its GDP contracted by 0.2% in the last quarter of 2024. It was the sixth consecutive quarter of year-on-year decline. Decreased exports alongside modest growth in government spending and sluggish household consumption contributed to this lacklustre performance.

Kickstarting growth is a top priority for Friedrich Merz, whose conservatives are now in coalition talks after winning Sunday's elections. Market participants are also closely monitoring upcoming economic indicators from the United States, including consumer confidence reports due later today, as well as personal consumption expenditures inflation data set for release later in the week.

Both are critical factors influencing Federal Reserve monetary policy expectations amidst fluctuating Treasury yields, reflecting risk-off sentiments across asset classes globally. That's it for now. Hope the rest of the day goes well. See you tomorrow for another recap.