Weekly Smart Pills #70

Financial Markets

Cryptocurrency Market

This week, the cryptocurrency market experienced significant volatility following an announcement by President Donald Trump regarding the creation of a "Crypto Strategic Reserve." This fund will include cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Cardano (ADA), and Ripple (XRP), with the goal of positioning the United States as the "world capital of cryptocurrencies."

Following the announcement, Bitcoin briefly surpassed $80,000, while Ethereum reached $2,200. However, both cryptocurrencies experienced corrections during the week: Bitcoin closed at $82,784, down 4.09% from its weekly high, while Ethereum ended at $2,044.69, marking a decline of 8.07% from its peak.

Traditional Financial Markets

Traditional financial markets posted modest gains this week.

The SPDR S&P 500 ETF Trust (SPY) closed at $575.92, up 0.55% from the previous week.

Similarly, the Vanguard FTSE Europe ETF (VGK) rose by 1.47%, closing at $73.34. These movements suggest cautious optimism among investors, despite ongoing global economic uncertainties.

Economy and Regulation

Donald Trump has temporarily suspended most tariffs on Mexican goods and some Canadian imports for at least four weeks, following criticism from businesses and financial markets. However, 62% of Canadian imports remain subject to a 25% tariff due to non-compliance with the USMCA trade agreement. The suspension will end on April 2, when the administration plans to impose additional tariffs, including on the automotive industry.

The decision comes amid concerns about the economic impact, with markets reacting negatively the dollar weakened and U.S. stock indices declined. The European Union is expected to be the next target for tariffs, with potential retaliatory measures on the horizon.

The eurozone economy grew by 0.2% in the last quarter of 2024, with the EU GDP increasing by 0.4%, supported by household spending. However, major economies like France and Germany saw contractions of 0.1% and 0.2%, respectively. Italy's GDP rose by 0.1%, while Ireland experienced a strong rebound with 3.6% growth.

For the full year, the eurozone’s GDP grew by 0.9%, and the EU's by 1%. The European Central Bank is expected to cut deposit rates further in April and June, following a recent 25 basis point reduction to 2.5%. Meanwhile, Germany’s plans to reform debt limits could influence future monetary policy.

Blockchain and Innovation

This week, we highlight the launch of Reploy (RAI), an Ethereum-based platform for the development of large language models (LLMs). According to BeInCrypto, Reploy saw a 15% increase over the past week due to growing adoption.

The project aims to facilitate the development and deployment of decentralized AI applications by providing advanced tools for developers in the blockchain space.

Trends and Statistics

What percentage of gross salaries do European workers pay in taxes?

• In 2023, a single worker without children in the EU paid an average of 17.3% of their gross salary in income taxes, with rates ranging from 3.2% in Cyprus to 36% in Denmark.

• A couple with two incomes and no children paid an average of 17.1%, with Denmark at 35.5% and Cyprus at 3.3%.

• A couple with one income and two children had an average tax rate of 8.1%, with negative rates in Slovakia (-14.1%), Czech Republic (-6.5%), Poland (-1.1%), and Germany (-0.2%).

• A couple with two incomes and two children paid an average of 14.6% in taxes, with rates ranging from 1.3% in Slovakia to 35.5% in Denmark.

• Denmark consistently had the highest tax burden across all categories, while Eastern and Southern European countries had the lowest rates.