According to Chainalysis’ Geography of Cryptocurrency Report 2024, Colombia has emerged as a major player in the regional cryptocurrency environment.

The country ranked fourth in Bitcoin transactions, having amassed more than US$6.788 billion during the same period.

The latest increase in Bitcoin’s value, surpassing a critical milestone of US$100,000, coincided with a government declaration by the newly elected president Donald Trump.

This development caused waves in global markets, increasing valuations for corporations with Bitcoin holdings and raising the cryptocurrency assets of countries like El Salvador.

However, the consequences of this increase go beyond the bounds of established economies and wealthy investors.

According to industry experts, Bitcoin’s soaring price and more favourable laws under the US government, alongside the potential establishment of a Bitcoin strategic reserve, poised the cryptocurrency to gain enhanced legitimacy and a growing user base.

Colombia’s rising cryptocurrency adoption

However, the Geography of Cryptocurrency Report 2024 by Chainalysis indicates the level of adoption of these digital activities in the region, with Colombia ranking fifth in the region among those who use a variety of cryptocurrencies the most, with US$28.455 million received between the second semester of 2023 and the first semester of 2024.

Although Bitcoin inflows have not yet eclipsed remittances from outside, it is worth noting that this share is greater than 50%.

With potential barriers to record remittance inflows during Trump’s presidency, the importance of cryptocurrencies such as Bitcoin may grow, providing Colombians with an appealing option for transfer and investment.

According to Juanita Rodríguez Kattah, Bitso’s country manager in Colombia, the Bitcoin record emphasizes the importance of studying and understanding the fundamentals of cryptocurrency.

The arrival at this historical price confirms that bitcoin’s value is being strengthened by the confidence and support of businesses, institutional investors, and governments around the world.”

Comparative adoption rates in Latin America

Colombia’s Bitcoin adoption rate is now at 13.7%.

In comparison, neighbouring nations have varied levels of Bitcoin engagement: Brazil has 14.2%, Argentina has 14.7%, and Mexico leads with a significant 19.3%.

However, with a boom in interest and investment in Bitcoin among Colombian consumers, these rankings may vary in the future years as consumer attitudes and legal frameworks evolve.

Stablecoins: a major player in the Colombian crypto market

Beyond Bitcoin, stablecoins have established a distinct niche in Mexico’s cryptocurrency market.

Globally, stablecoins account for 44.7% of all cryptocurrency transactions, followed by altcoins at 24.6% and Bitcoin at 22.3%.

Notably, stablecoins dominate the Colombian market, accounting for a remarkable 66% of transactions.

This distinguishes Colombia as the country with the highest relevance for stablecoins in the region, followed by Argentina (61.8%), Brazil (59.8%), and Venezuela (56.4%).

In terms of financial impact, stablecoin income in Colombia reached US$3.178 billion by June 2024, highlighting the importance of stablecoins in the country’s crypto economy.

This development suggests a strong desire among Colombian investors to find stability and security in digital assets tied to traditional currencies.

The future of cryptocurrencies in Colombia

As Colombia navigates the growing cryptocurrency landscape, it has the opportunity to strengthen its position not only as a major player in Bitcoin adoption but also as a pioneer in stablecoin usage in Latin America.

The combination of favourable regulatory settings and rising consumer demand points to a promising future for cryptocurrencies in Colombia, where people are rapidly adopting these digital assets for investment and remittance purposes.

Overall, the developments around Bitcoin and cryptocurrencies in Colombia mirror broader tendencies poised to influence the region’s financial and economic fabric, indicating a transformative moment in which digital currencies may play a vital role in determining financial futures.

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The USD/CAD exchange rate soared to its highest level since April 2020 amid the rising concerns about the US and Canada trade war, and the upcoming Bank of Canada (BoC) interest rate decision. The pair jumped to 1.4180, up by almost 20% from its lowest level in 2021.

BoC interest rate decision

The BoC will start its two-day monetary policy meeting on Tuesday and then deliver its decision on Wednesday.

Economists believe that the bank will continue with its interest rate cuts in this meeting, a move it hopes will help to support the economy.

The BoC has been one of the most dovish central banks in the developed world as it slashed rates in the last four consecutive meetings. It has moved from 5.0% to the current 3.75%.

Analysts expect it to cut them by 0.50%, bringing the benchmark lending rate to 3.25%, its lowest level since 2022.

These cuts are happening because the Canadian economy is slowing, while inflation has moved to its 2% target. Data released in November showed that the headline CPI rose from 1.6% in September to 2.0% in November. It was higher than the median estimate of 1.9%.

Additional data released last week showed that the economy expanded by just 1% in the third quarter, lower than what the bank was expecting. This economic growth was driven by consumer and government spending as business investments dropped. 

Another report released last week showed that Canada’s labor market was relatively mixed. The unemployment rate rose from 6.5% in October to 6.8% in November, worse than the expected 6.6%. This happened even as Canada’s economy added over 50.5k jobs during the month. 

The BoC will also cut rates as concerns about a trade war between Canada and the United States rose. Donald Trump has threatened to impose a 25% tariff on Canadian imports, citing the immigration crisis. 

Read more: USD/CAD forecast: Canadian dollar outlook amid Trump tariff threat

Fed decision and US inflation data ahead

The other key USD/CAD news will come out on Wednesday when the US publishes the latest consumer price index (CPI) data. Economists polled by Reuters expect the data to show that prices rose slightly in November.

Precisely, economists see the headline CPI coming in at 2.7%, a small increase from the recent 2.5%. Core inflation, which excludes the volatile food and energy prices, is expected to remain at 3.3%.

Economists hope that the Federal Reserve will also cut interest rates in its meeting next week. Still, some a strong CPI reading may push the Fed to wait before cutting.

As such, the difference in the US and Canadian interest rates has formed a good carry trade opportunity. A carry trade happens when investors borrow from a low-interest-rate country and invest in a high-interest-rate one.

USD/CAD technical analysis

USD/CAD chart by TradingView

The weekly chart shows that the USD to CAD exchange rate has been in a strong bullish trend in the past few weeks. It has moved above the important resistance level at 1.3975, the upper side of the ascending triangle pattern. This triangle is one of the most bullish patterns in technical analysis.

It has moved above the 78.6% Fibonacci Retracement point at 1.4100. The Relative Strength Index (RSI) and the MACD indicators have also continued rising. The RSI has moved close to the oversold level, while the MACD indicator has continued rising. 

Therefore, the pair will likely continue rising as bulls target the next key resistance level at 1.4675, its highest level in 2020. The stop-loss of this trade will be at 1.3975, the upper side of the ascending triangle pattern.

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Benchmark Indian equity indices BSE Sensex and Nifty 50 advanced on Tuesday, buoyed by gains in IT, metal, and real estate stocks.

At 10:34 am, the BSE Sensex rose 0.14%, while the Nifty 50 edged up by 0.092%.

The BSE Metal Index outperformed, climbing over 1%, with major gainers like Jindal Steel, NMDC, and APL Apollo driving momentum.

The Nifty IT Index and Nifty Realty Index also recorded steady gains of 22 points and 7 points, respectively.

Greaves Cotton surges to a 52-week high

Greaves Cotton shares surged 13.58% to reach a 52-week high of ₹242.20 after ace investor Vijay Kedia acquired a 0.52% stake in the company.

Kedia’s purchase of 12 lakh shares at an average price of ₹208.9 per share, totalling approximately ₹25 crore, fuelled market excitement.

The strategic move follows Greaves Cotton’s announcement of an IPO for its subsidiary, Greaves Electric Mobility, signalling growth prospects in the electric vehicle segment.

This marks the stock’s strongest single-day gain in three years.

ITI Limited continues rally

ITI Limited shares extended their upward trajectory for a third consecutive session, hitting an all-time high of ₹404 on the NSE.

The stock opened at ₹385, up from its previous close of ₹368.10, before soaring 9.8% to its new peak.

By 10:30 am, ITI shares traded 7.42% higher at ₹395.40, with a market capitalization nearing ₹38,000 crore.

The stock has gained nearly 40% over the past three days, reflecting strong investor confidence amid robust buying interest.

Mishtann Foods falls as SEBI takes action

Shares of Mishtann Foods plummeted nearly 10% to ₹8.95 after the Securities and Exchange Board of India (SEBI) barred the company, its promoter, and four other entities from the securities market for alleged financial irregularities.

SEBI’s investigation revealed that Mishtann Foods engaged in circular trading with fictitious buyers and suppliers, many of which were shell entities controlled by company insiders.

This scandal has raised concerns over corporate governance and could lead to further regulatory scrutiny.

Inflation data eyed amid global cues

Upcoming CPI data releases in India and the US are expected to guide market sentiment.

US CPI figures, due Wednesday, could influence the Federal Reserve’s interest rate decisions.

Markets anticipate an 86% probability of a 25 basis point rate cut at the Fed’s December 18 meeting.

India’s CPI data, due Thursday, is projected to have slowed to 5.53% in November, retreating below the Reserve Bank of India’s 6% upper tolerance limit, according to a Reuters poll of economists.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted a consolidation phase in Indian markets.

“There are no major triggers for a new bull orbit or deep correction. The current weakness in FMCG stocks presents a buying opportunity for long-term investors,” he noted.

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The ASX 200 index retreated on Tuesday as the market reacted to the latest Reserve Bank of Australia (RBA) interest rates. The index, which tracks the biggest companies in Australia, retreated to $8,375, down by 1.83% from its highest level this year.

RBA leaves interest rates unchanged

The ASX 200 index retreated after the RBA decided to leave rates unchanged at 4.35%, where they have been in the last 12 months.

Unlike other global central banks, the RBA has maintained a fairly hawkish tone, citing the stubbornly high inflation rate in the country.

Recent data showed that the headline Consumer Price Index (CPI) dropped from 3.8% in Q2 to 2.8% in Q3. This decline was higher than the median estimate of 2.3%.

The trimmed mean inflation, which excludes the most volatile food and energy prices, retreated to 3.5% from the previous 3.9%. These numbers meant that inflation was much higher than the RBA’s target of 2.0%. The statement said:

“While headline inflation has declined substantially and will remain lower for a time, underlying inflation is more indicative of inflation momentum, and it remains too high. Recent data on inflation and economic conditions are still consistent with these forecasts, and the Board is gaining some confidence that inflation is moving sustainably towards target.”

In its last decision of the year, the bank hinted that the first rate cut will likely come in the first or second quarter of the year. Historically, financial assets like stock indices do well when central banks are cutting interest rates.

The rate decision came at a time when the Australian dollar has slumped, with the AUD/USD pair falling from the year-to-date high of 0.6942 to a low of 0.6375, a 8.2% drop.

Read more: ASX 200 outlook after RBA decision; ANZ, NAB, REA earnings ahead

Top ASX 200 index movers

The RBA decision also happened as Australian stocks have done well this year, with the ASX 200 rising by almost 10% this year. It has underperformed other major global indices like the S&P 500 and Nasdaq 1o0 indices, which have soared by double digits.

Most ASX 200 constituents have done well this year. Mesoblast, a company that makes cellular medicines, has been the best performer as its stock jumped by over 400% this year.

Technology companies have also helped the index. Zip, a leading player in the buy now, pay later (BNPL) industry, has risen by 366% this year. This growth is in line with that of other BNPL companies like Affirm and Klarna.

Appen, a tech company in the AU and data industry, has jumped by 240% this year, as demand for AI solutions jumped. The other top companies in the index are Nuix, Pointsbet Holdings, and Netwealth Group.

Australian banks have done well this year, which has led to concerns about their valuations.

Westpac Banking stock price has jumped by 47% this year. Similarly, Commonwealth Bank of Australia (CBA) shares have jumped by 40%. The National Bank of Australia (NAB) stock has jumped by 23% this year, while ANZ has been the main laggard as it jumped by 13%.

Australian mining companies have largely underperformed the market this year as commodity prices fell. BHP Group’s stock retreated by 17%, while Fortescue Metals fell by almost 30%. Rio Tinto shares have fallen by 8.10%.

ASX 200 index analysis

ASX 200 index chart | Source: TradingView

The daily chart shows that the ASX 200 index has been in an uptrend in the past few months. It has formed an ascending channel shown in black, and is now a few points below the its upper side. This channel formed as the index formed a series of higher highs and higher lows.

The ASX 200 index has remained above the 50-day and 200-day Exponential Moving Averages (EMA). Also, the two lines of the MACD have made a bearish crossover pattern, while the Relative Strength Index (RSI) has pointed downwards.

Therefore, the index will likely waver, and then resume the uptrend. More gains will be confirmed if the index rises above the year-to-date high of $8,532. A drop below the 50-day moving average will invalidate the bullish view.

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China’s top leaders are making their most aggressive push in years to reignite economic growth.

With slowing consumer demand, deflationary trends, and potential trade tariffs by the US, the country’s policymakers are pivoting sharply. 

At a recent Politburo meeting, they announced a shift to “moderately loose” monetary policy and more proactive fiscal measures for 2025.

Markets reacted with optimism, but the real test lies in execution.

What does ‘moderately loose’ mean?

China’s decision to adopt a “moderately loose” monetary policy means it is now departing from its 14-year “prudent” stance.

Analysts interpret this as a move toward lower interest rates and reduced reserve requirements for banks.

This would free up liquidity and encourage lending in order to spur economic expansion.

The last time China used this strategy was during the 2008 financial crisis.

While authorities are determined to avoid excessive debt accumulation, the urgency to meet a 5% growth target for 2025 has pushed them toward aggressive measures. 

In November alone, the People’s Bank of China injected 1 trillion yuan ($140 billion) into the financial system.

However, the bigger question here is whether these actions will stimulate real economic activity or simply stabilize sentiment.

Fiscal spending ramps up

Fiscal policy will also take center stage in 2025, with promises of “more proactive” measures.

This could include increasing the fiscal deficit beyond its current 3%, allowing the government to fund major infrastructure projects and stabilize struggling sectors.

Analysts predict significant bond issuance and new initiatives targeting regional economies.

Recent measures, such as a $1.4 trillion debt relief package for local governments, highlight the scale of the fiscal response.

Subsidies for consumer goods like home appliances and cars have shown some short-term success, but broader fiscal spending is needed to drive sustainable growth.

Expanding these subsidies and implementing direct financial support for low-income households may be on the horizon.

Consumer demand: the missing piece

Despite the policy shifts, consumer demand remains a weak link.

Retail sales saw a slight boost in October thanks to a holiday period, but November data showed no sustained improvement.

In fact, consumer prices rose by only 0.2% year-on-year—the lowest since June—and producer prices declined for the 26th consecutive month.

Premier Li Qiang has emphasized the importance of “forcefully lifting consumption,” with unconventional measures likely to follow.

Programs like cash-for-clunkers, which offer discounts on new purchases in exchange for old products, could expand in 2025. 

However, these measures may only offer temporary relief unless deeper structural issues, such as stagnant wages and a struggling property market, are addressed.

Trade tensions escalate

China’s export-driven growth faces new risks as Donald Trump prepares to return to the US presidency.

His proposed tariffs of up to 60% on Chinese goods could significantly disrupt trade flows. 

Although exports to the US increased 8% year-on-year in November, analysts believe this growth reflects US firms front-loading orders ahead of expected tariffs. A slowdown in the latter half of 2025 is anticipated.

Other trade partners, such as ASEAN and the European Union, have shown resilience, with export growth of nearly 15% and 7.2%, respectively.

However, imports from these regions have declined, underscoring weak domestic demand. 

China’s export strength in sectors like renewable energy, steel, and rare earth minerals remains a bright spot but does little to address internal economic challenges.

The property market dilemma

China’s property market continues to weigh heavily on the economy.

Falling home prices and reduced investment activity have eroded consumer wealth and confidence.

Policymakers have pledged to stabilize the sector, but tangible improvements have been slow to materialize.

The property market’s decline has broader implications for economic recovery.

A rebound in this sector could significantly boost consumer spending and investment, but achieving that will require more aggressive and targeted policies.

Without a turnaround, domestic demand may remain stagnant, undermining broader recovery efforts.

Market’s reaction and the road ahead

Financial markets reacted positively to the Politburo’s announcements, with the Hang Seng Index rising over 3% and Chinese stocks seeing gains. 

Economists are particularly concerned about the implementation timeline.

While rate cuts and fiscal measures have been signaled, the actual rollout may take months.

Policymakers will also need to balance short-term gains with long-term stability, ensuring that debt levels remain manageable.

The Central Economic Work Conference is set to begin this week, which will outline specific growth targets and policy details for 2025.

While recent announcements reflect a strong commitment to change, their success depends on swift and effective implementation.

China’s ability to hit its 5% growth target hinges on boosting domestic consumption, stabilizing key sectors like property, and mitigating the impact of global trade tensions.

The coming months will reveal whether these policies can deliver meaningful results or if more drastic measures will be needed.

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