Day: December 31, 2024

Brent Crude Oil Lost 3.2% of Its Value in 2024

Posted on by Ignacio Teson

Brent crude oil dropped around 3.2% compared to its closing price in 2023 of $77.04, while WTI remained nearly stable.

Oil prices ended 2024 with a second consecutive annual loss on Tuesday, due to weak post-pandemic demand, economic challenges in China, and the fact that non-OPEC producers kept the market well-supplied.

Brent crude rose by $0.65, or 0.88%, to $74.64 per barrel, while U.S. light crude WTI gained $0.73, or 1.03%, to $71.72 per barrel.

[[USOIL-graph]]

Brent fell approximately 3.2% from its 2023 closing price of $77.04, while WTI remained practically unchanged compared to last year’s final price.

In September, [[UKOIL]] futures closed below $70 per barrel for the first time since December 2021, and overall, prices in 2024 stayed below the highs of recent years as the post-pandemic demand rebound and the price shocks from Russia’s invasion of Ukraine in 2022 began to fade.

The highest closing price of 2024 was $91.17 per barrel, marking the lowest annual high since 2021.

Oil Price Outlook and Projections

Oil prices are expected to remain limited near $70 per barrel in 2025, as weak demand from China and rising supply are expected to overshadow OPEC+ efforts to stabilize the market, according to a Reuters monthly survey on Tuesday.

Weakened demand from China forced both the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) to revise down their oil demand growth forecasts for 2024 and 2025.

Oil Market Surplus

As non-OPEC supply also increases, the IEA forecasts that the oil market will enter a surplus in 2025, despite OPEC and its allies delaying their plan to start increasing production until April 2025.

U.S. oil production rose by 259,000 barrels per day (bpd) to a record 13.46 million bpd in October, while demand surged to its highest levels since the pandemic, according to data from the U.S. Energy Information Administration (EIA).

The EIA predicts that production will reach another record of 13.52 million bpd next year.

Mexican Peso Loses 23% Against the Dollar in Its Worst Year Since 2008

Posted on by Ignacio Teson

After a year of significant fluctuations and without key indicators to absorb, investors remain cautious in the face of an uncertain outlook.

The Mexican peso closed 2024 with a sharp accumulated loss against the dollar, its largest since 2008. Following a year of wide movements and no relevant indicators to interpret, investors maintained the exchange rate above 20.80 amid an uncertain landscape.

[[USD/MXN-graph]]

The [[USD/MXN]] ended the day at 20.8829 units per dollar, compared to 16.9666 units at the close of 2023. The Mexican currency saw a decline of 3 pesos and 91 cents, or 23.08%, based on data from the Bank of Mexico.

Mexican Peso Performance

It is worth noting that this year, the dollar reached a high of 20.9080 on Tuesday, surpassing the previous record of 20.83 set after Donald Trump’s electoral victory. The peso had fluctuated between highs and lows, but at the start of the year, it had the best global performance against the dollar among major currencies. However, many of the factors that supported the trend of the so-called “super peso” faded, and the currency has since been fluctuating freely.

The favorable conditions that allowed the peso to outperform have gradually dissipated, pushing the local currency from 16.26 to 20.80 in the interbank market.

Mexican Peso Projections and Outlook

2025 will be a year of significant challenges, especially due to geopolitical escalations, and decisions made at the beginning of Donald Trump’s second term could exert a strong influence. Caution will prevail as expectations either materialize or deviate.

The Bank of Mexico’s high interest rate, which reached a record 11.25%, had supported the peso’s strength against the dollar. However, following a series of rate cuts, the rate has now dropped to 10%, with the central bank forecasting further reductions.

Xi Jinping Affirms China Will Achieve 5% GDP Growth

Posted on by Ignacio Teson

Looking ahead to 2025, Chinese President Xi Jinping has announced that Beijing will maintain its stimulus measures and emphasized the need for more proactive policies.

Speaking to the nation’s top political advisory body, Xi stressed the importance of preparing for potential challenges, including the possibility of increased tariffs from the United States under the incoming administration of Republican President Donald Trump.

On Tuesday, Xi reaffirmed that China is on track to achieve its 5% GDP growth target for 2024, describing the world’s second-largest economy as moving toward “stability.” While final growth figures for 2024 won’t be released until late January, Xi’s remarks aim to quell market uncertainty regarding the country’s macroeconomic outlook.

Chinese Economic Slowdown

This uncertainty has lingered over recent months as China faced sluggish domestic consumption and a trade crisis impacting both exports and imports. In response, the government rolled out new stimulus measures in late summer to revive internal demand and stabilize trade flows. Analysts currently estimate that China’s economy will close 2024 with a growth rate of approximately 4.8%.

The official growth target for 2025 will not be set until March during the annual legislative sessions, but Chinese officials anticipate the rate will again hover around 5%, exceeding most analyst forecasts. Xi’s commitment to sustained economic support underscores Beijing’s determination to counter external and domestic pressures while fostering long-term growth and stability.

Perfect Storm Drives Gold’s Best Annual Performance in 14 Years

Posted on by Ignacio Teson

Gold prices soared over 26% in 2024, marking their largest annual gain since 2010. This remarkable rally, driven by robust central bank purchases, geopolitical uncertainties, and monetary easing, culminated in an all-time high of $2,790.15 per ounce on October 31.

Spot gold ended the year at $2,624.44 per ounce, up 0.7% on Tuesday, while U.S. gold futures rose 0.8% to $2,638.90 per ounce.

[[XAU/USD-graph]]

Gold Drivers and Outlook 2025

Central bank purchases were a key factor in gold’s strong performance, as global financial institutions sought to diversify reserves amidst geopolitical tensions and a shifting monetary landscape. Falling interest rates further supported gold as a safe-haven asset during a period of economic uncertainty.

Although gold’s momentum slowed in November due to a stronger dollar following the “Trump euphoria,” analysts believe the factors that fueled its 2024 rise will persist into 2025. Central banks are expected to continue buying at a similar pace, though potential tariffs from the Trump administration targeting countries perceived as “de-dollarizing” could weigh on flows.

[[XAU/USD]] remains well-positioned to thrive in a low-interest-rate environment, serving as a hedge against economic and geopolitical risks. A renewed rally is anticipated in 2025, bolstered by a weakening U.S. labor market, persistently high interest rates that constrain growth, and increased demand for gold ETFs.

Other Metals

Silver also had an impressive year, with prices rising 22%, the best performance since 2020, despite a slight dip to $28.83 per ounce on Tuesday. In contrast, palladium and platinum struggled, with annual losses exceeding 17% and 8%, respectively, even as palladium rose to $910.45 per ounce and platinum edged up to $904.65 per ounce on Tuesday.

While gold led the safe-haven rally in 2024, silver stood out as a strong performer, while palladium and platinum faced sector-specific challenges. The metals market remains dynamic as investors assess economic developments and policy shifts heading into 2025.

Montenegro Extradites Crypto Magnate Do Kwon

Posted on by Ignacio Teson

Kwon Do-Hyeong, the South Korean entrepreneur behind Terraform Labs, has been extradited to the United States by Montenegro, nearly two years after his arrest in Podgorica.

Officials from Montenegro announced the transfer on Tuesday, citing accusations of multi-billion-dollar fraud tied to the collapse of Terraform Labs.

Terraform Labs, founded in 2018, developed the cryptocurrencies TerraUSD and Luna. Their downfall wiped out an estimated $40 billion in investor funds, triggering widespread disruption in global cryptocurrency markets.

FBI Role and Terra – Luna

Montenegro’s Ministry of the Interior confirmed in a statement that Do Kwon was handed over to U.S. authorities, including agents from the Federal Bureau of Investigation (FBI). The statement highlighted that he faces criminal charges in the U.S., including conspiracy to commit fraud.

Kwon’s extradition follows a lengthy legal process. His lawyers announced plans to appeal the decision before Montenegro’s Constitutional Court and the European Court of Human Rights.

The cryptocurrency mogul was arrested in March 2023 at Podgorica Airport while attempting to board a flight to Dubai using a falsified Costa Rican passport.

Once hailed as a “genius” by South Korean media, Kwon rose to prominence for his rapid success in the cryptocurrency industry, attracting billions in investments. Before launching Terraform Labs, he worked at Apple and Microsoft.

The TerraUSD Affaire

TerraUSD was marketed as a stablecoin, maintaining a fixed value of one U.S. dollar per coin, ostensibly less volatile than traditional cryptocurrencies like Bitcoin. However, its stability relied on an algorithm rather than tangible reserves such as foreign currency or assets.

Experts allege that Kwon orchestrated a Ponzi scheme, using funds from new investors to pay returns to existing ones. The collapse of Terraform Labs has intensified global scrutiny of cryptocurrency regulation and stablecoin practices.

Boeing’s Stock Drops Following Plane Crash in South Korea

Posted on by Ignacio Teson

Last quarter, Boeing reported a larger-than-expected loss for the third quarter of this year.

Boeing’s stock dropped 2.16% on Wall Street at pre-market operations on Tuesday following an announcement from South Korea’s Ministry of Transport about an investigation into the country’s fleet of Boeing 737-800 aircraft. The probe was initiated after a domestic plane crash over the weekend.

A Jeju Air flight traveling from Thailand to South Korea landed without its landing gear and burst into flames at Muan International Airport on Sunday.

Authorities, who have yet to determine the cause of the crash, are investigating factors such as a bird strike and a potential malfunction in the aircraft’s control system.

South Korea’s Ministry of Land, Infrastructure, and Transport stated that the aircraft’s pilot reported a “bird strike” shortly after receiving a warning about bird activity.

Investigation Outlook

Acting South Korean President Choi Sang-mok reportedly instructed the Transport Ministry to conduct an emergency inspection of the operational systems of all airlines in the country.

The ministry plans to inspect all 101 Boeing 737-800 planes operated by South Korean airlines.

“We will transparently disclose the progress of the crash investigation, even before the final results are published, and keep the victims’ families informed,” Choi said.

Boeing 737-Max Scrutiny

Earlier this year, a Boeing 737-9 Max operated by Alaska Air experienced a structural failure mid-flight.

The incident led to the temporary grounding of the aircraft model and an investigation by the Federal Aviation Administration (FAA).

In July, Boeing agreed to plead guilty to a charge of conspiracy to commit fraud related to the 2018 Lion Air crash and the 2019 Ethiopian Air crash, according to a BBC report at the time.

Bitcoin Whale Moves $72 Million in 24 Hours: Impact on Market Sentiment

Posted on by Arslan Butt

In a dramatic move earlier today, a significant Bitcoin whale deposited 778 BTC, worth approximately $72 million, into the Kraken exchange.

This deposit is part of a larger pattern, with the same whale transferring a total of 3,038 BTC (valued at $286 million) since December 20. While these actions typically stir market speculation, the whale still holds a substantial 24,665 BTC, or roughly $2.27 billion, raising questions about its intentions.

Continue reading “Bitcoin Whale Moves $72 Million in 24 Hours: Impact on Market Sentiment” →

XRP Price Poised for $11 Rally in 2025, Expert Predicts

Posted on by Arslan Butt

XRP, the native cryptocurrency of Ripple, has recently shown signs of a recovery after experiencing a dip.

Trading near the $2 mark, the coin has sparked optimism among investors as they look to the future. A top expert in the crypto space has made an exciting prediction for XRP’s potential price surge in 2025, forecasting a rise to $11. This bullish outlook has gained traction following positive developments in the crypto market and favorable technical indicators.

Continue reading “XRP Price Poised for $11 Rally in 2025, Expert Predicts” →

MicroStrategy Stock Falls Under $300 Amid Bitcoin Strategy Concerns

Posted on by Arslan Butt

MicroStrategy (MSTR) saw its stock price fall below $300 in after-hours trading on December 30, marking a 46% drop from its all-time high in November.

This decline has raised questions about whether the company’s momentum is waning. Despite the company’s aggressive Bitcoin acquisition strategy, investors appear increasingly uncertain about its future, especially with concerns surrounding its funding plans and market dynamics.

In recent trading, MicroStrategy’s stock experienced a significant 8.2% loss, dropping to $302.96. After-hours trading saw a further decrease of 3%, settling at $293.59. The company’s stock price has been on a downward trend since reaching a peak of $543 on November 21. While the company reported a 342% growth in its stock for the year, largely driven by its Bitcoin accumulation, the ongoing slide raises questions about the sustainability of this strategy.

MicroStrategy’s Bitcoin Strategy Under Scrutiny

MicroStrategy’s focus on Bitcoin has been both a blessing and a curse. The company recently added 2,138 BTC to its holdings, bringing the total to 446,400 BTC. This aggressive accumulation strategy has contributed to its impressive stock performance in 2024, but it also exposes the company to high levels of volatility.

While Bitcoin has surged by 121% this year, some market experts are beginning to doubt whether this strategy will continue to pay off. Martin Shkreli, co-founder of Elea Capital, criticized Michael Saylor, the company’s CEO, for his “overzealous” Bitcoin investment approach. Shkreli called the recent shareholder vote on Bitcoin treasury allocation a “disaster,” with only 0.5% support for the company’s plans.

Furthermore, concerns have been raised about the potential approval to raise the company’s authorized share count by a massive 10 billion. This move could significantly dilute existing shareholder value, further eroding investor confidence.

Market Sentiment: Is MicroStrategy in a “Lose-Lose” Situation?

Critics argue that MicroStrategy’s reliance on debt and equity issuance to fund its Bitcoin purchases resembles a “Ponzi scheme,” a sentiment echoed by analysts like Jacob King. The company’s heavy dependence on funding to buy Bitcoin puts it in a precarious position, particularly if Bitcoin prices begin to plummet.

However, some analysts remain optimistic. Felix Hartmann of Hartmann Capital points out that MicroStrategy’s debt is mostly at near-zero interest rates, with maturities spread out until 2027-2030. This reduces the company’s near-term financial pressure, offering some breathing room for its Bitcoin strategy. Hartmann suggests that despite short-term volatility, MicroStrategy could still see its market value surpass five figures before encountering any major collapse.

Key Takeaways:

  • MicroStrategy’s stock fell below $300 as concerns about its Bitcoin strategy grow.

  • The company’s Bitcoin holdings have led to impressive growth but expose it to significant risk.

  • Analysts are divided on whether the company can sustain its aggressive strategy, with some fearing long-term volatility.