Venture Capital Landscape

Economic

Summary:

With the rise of initiative-rich regions like ‘Swiss Valley’ and ‘Silicon Canals’, coupled with increasing investments and the strategic positioning of leading healthcare and life sciences companies, Europe is carving its niche in the broader VC landscape.

As we explore these thriving hubs, we will examine how they have cultivated an attractive environment for startups and consider the role of major players in the healthcare sector, particularly in Switzerland, while also reflecting on the dynamics of these ecosystems.

Swiss Valley: a biotechnology powerhouse

The geography of innovation

Nestled between Zurich, Basel, and Lausanne, ‘Swiss Valley’ is a dynamic stretch that encompasses some of the most significant research and development institutions in Europe. At the heart of this innovation ecosystem is ETH Zurich, one of the most prestigious technical universities worldwide, well-known for its engineering and life sciences programs. The university fosters a robust entrepreneurial spirit, offering support to startups through dedicated incubators and mentoring programs.

Further downstream, Basel houses industry giants such as Novartis and Roche. These multinational pharmaceutical companies are not just significant players in the global market; they also play an integral role in the Swiss venture capital landscape by acquiring small, innovative biotech firms. These acquisitions allow major players to absorb advancements in technology and research, fueling their growth and extending their pipeline of innovative products.

Navigating healthcare and life sciences

The healthcare and life sciences sectors hold a unique position in Switzerland's innovation ecosystem. Key regional clusters include the BioValley in Basel, the Bio-Technopark Zurich and the Biopôle in Lausanne, each fostering biotech research in their own domain. With an increasing demand for innovative healthcare solutions, Switzerland has become a magnet for startups focused on life sciences, medical devices, and pharmaceuticals. According to the 2024 Swiss Venture Capital Report, Swiss biotech companies received VC investment to the tune of CHF 488 million in 2023 alone, a twenty percent year-on-year growth compared to 2022. Established firms, including Johnson & Johnson and Novo Nordisk, strategically acquire emerging companies to access groundbreaking research and expedite their product development cycles. Recent success stories, including NBE-Therapeutics (acquired for EUR 1.18 billion by Boehringer Ingelheim) or VectivBio (acquired for USD 1 billon by Ironwood Pharmaceuticals), are testimony to a robust exit environment.

Investments in Switzerland's startup scene have been bolstered by tax incentives and favorable regulations, encouraging private equity firms and institutional investors to funnel their ‘dry powder’ into promising ventures. Startups are increasingly focused on developing tools for personalized medicine, AI-driven diagnostics, and novel therapies, indicating a strategic shift towards cutting-edge solutions that respond to global healthcare challenges.

The rise of silicon canals in Amsterdam

Amsterdam's flourishing startup ecosystem

Amsterdam is rapidly defining its identity as a leading European innovation hub. Dubbed ‘Silicon Canals’, this vibrant tech landscape is characterized by its diverse startup ecosystem powered by seasoned entrepreneurs and an influx of talent, supported by a collaborative environment that fosters networking and knowledge-sharing.

The University of Amsterdam and Amsterdam University of Applied Sciences are vital contributors to this ecosystem, producing a steady stream of talented graduates in technology and business. From fintech companies to green tech startups, the city's entrepreneurs are increasingly focused on addressing pressing global issues, such as sustainability and urbanization.

Supportive infrastructure and resources

Key initiatives by the Dutch government, coupled with the efforts of private incubators and accelerators, have provided startups access to vital resources. Programs like StartupAmsterdam and various accelerators have contributed to the thriving environment, making it easier for entrepreneurs to collaborate with venture capitalists and industry veterans. Notably, the presence of numerous co-working spaces and incubators fosters a culture of innovation and collective growth.

The Amsterdam region is home to several VC firms that have been allocating increasingly larger portions of their dry powder to local startups. In 2023 alone, North American investments in European technology reached an all-time high, demonstrating the growing allure of European markets for global investors. This influx of capital and the availability of talent are critical components driving Amsterdam's emergence as a significant VC hub.

According to Dealroom, Amsterdam now counts 12 companies valued over USD 1 billion, since the early Booking.com success story: almost one per year on average, but almost two every year since 2019. Recent Dutch unicorn success stories include Adyen, Elastic, Takeaway.com, Mollie and WeTransfer.

Sweden's growing innovation landscape

A hub of startups and incubators

Sweden has established itself as another key player in the VC arena, with a burgeoning ecosystem of startups and incubators. The country boasts a rich tradition of innovation, spurred by its strong education system and extensive research institutions such as the Karolinska Institute and KTH Royal Institute of Technology. The Wharton School of Business called Sweden a “unicorn factory” in a 2015 study and one year later TechCrunch dubbed Sweden the “tech superstar from the north.”

Swedish VC has increasingly flowed into promising startups, particularly those focused on technology, sustainability, and healthcare. Initiatives like STING (Stockholm Innovation & Growth) and Startup Sweden serve as incubators, providing support, mentorship, and funding for nascent companies. These programs play a crucial role in connecting entrepreneurs with venture capitalists and experienced industry mentors, laying the foundation for sustainable growth.

In 2018, Sweden saw two of its major tech success stories come to full fruition with Spotify’s USD 27 billion IPO and iZettle’s acquisition for USD 2.2 billion by PayPal. As for many other European innovation clusters, major exit outcomes like this can help to attract more capital into the region and inspire the next generation of founders.

Robust focus on sustainability

The Swedish startup ethos is significantly influenced by a strong commitment to sustainability, which leads to a diverse array of innovative projects aimed at addressing climate change and fostering sustainable development. With an increasing emphasis on environmental, social, and governance (ESG) criteria, venture capitalists are incentivized to prioritize investments in companies that align with sustainable practices. This trend reflects a broader evolution in the VC landscape, where climate tech is not just a niche but a critical focus area for many investors.

VC activity in Europe: key figures

To enhance our understanding of the VC dynamics within Europe, we can analyze the number of deals and aggregate deal values across major European countries for early and late-stage VC investments (see Figures 2 and 3). The charts display the breakdown by country and vintage year for both the number of deals and aggregate deal values.

Analyzing the data offers valuable insights into the VC landscape in Europe:

UK dominance: The UK continues to maintain a leading position in both the number of deals and aggregate deal value, indicating a robust ecosystem that attracts significant investment across a diverse array of sectors. Its VC environment is supported by an established network of investors, accelerators, and a vibrant startup community.

Switzerland's growth: Switzerland has experienced a notable increase in its share of both the number of deals and aggregate deal value, particularly rising from 6.5% in deal numbers in 2020 to 7.8% in 2024 YTD. This growth reflects a rising interest in Swiss startups, particularly in biotech and health tech sectors, reinforced by the presence of major pharmaceutical firms and research institutions that nurture innovation.

Nordics potential: The Nordics also display promising growth trends, with an increase in the number of deals from 7.6% in 2020 to 8.4% in 2024 YTD. The region’s strong emphasis on sustainability and technology-driven solutions continues to attract VC investments, supporting a thriving startup ecosystem that is well-positioned for future growth.

The competitive landscape of European VC

Funding trends and dry powder dynamics

As of October 2024, European VC funds boast a total dry powder of approximately USD 47.2 billion (see Figure 1). These capital reserves are pivotal for the growth of startups, especially when market conditions tighten or economic uncertainties loom.

A significant observation in the current funding environment is the disparity in investment levels between regions. North America leads with a staggering USD 250.2 billion, while Asia follows closely with USD 235.5 billion. Comparatively, Europe, with USD 47.2 billion, may seem smaller but represents a burgeoning opportunity particularly with the backing of government initiatives and a commitment from institutional investors to diversify their portfolios.

Over the past few years, European VC has seen considerable growth, particularly in sectors such as technology, healthcare, and fintech. This growth has been supported by both local and foreign investments, suggesting that European VC firms are likely to prioritize high-potential startups, creating a positive feedback loop of funding innovation.

Key players in the European VC landscape

Leading VC firms across Europe have significantly influenced the direction of investments. Firms such as Balderton Capital, Index Ventures, and Northzone have established themselves as pivotal players, focusing on a wide array of technology-driven startups across various sectors.

Additionally, family offices and sovereign wealth funds have begun to actively participate in the European VCscene, offering a new pool of capital to startups. This diversification of investor profiles contributes to a vibrant environment where innovation can thrive.

Challenges and opportunities

Competition and market saturation

Despite the promising growth, European VC faces several challenges. As more funds enter the market, competition for the best investment opportunities intensifies. Startups often encounter difficulties in securing financing, particularly when competing against well-established firms with longer track records and better access to capital.Moreover, ongoing geopolitical tensions and economic uncertainties can affect investor sentiment, potentially leading to fluctuations in funding availability. Startups may need to pivot quickly or exhibit greater adaptability to maintain investor confidence.

Room for growth

Nevertheless, there are ample opportunities for growth within Europe. Markets in Central and Eastern Europe are beginning to reveal their potential as emerging startup ecosystems, offering a unique blend of innovation and lower competition. VC firms that strategically tap into these emerging markets could uncover new avenues for investment and growth.Furthermore, partnerships with academic institutions and industry leaders can facilitate collaborations that foster startup growth. By bridging the gap between research and commercialization, stakeholders can expedite the development of innovative solutions that meet market demands.

Focus on healthcare innovations

The healthcare and life sciences sectors continue to be focal points for VC investments. The COVID-19 pandemic underscored the need for rapid innovation in healthcare, and this demand is unlikely to dissipate. Startups that focus on telehealth, biotechnology, AI in healthcare, and digital health solutions are poised for significant growth, and venture capitalists are taking note.

Switzerland's strong legacy in life sciences, coupled with the EU's increasing emphasis on healthcare innovation, ensures that opportunities abound for investors willing to support promising healthcare ventures that demonstrate innovative approaches to disease management and patient care. The emphasis on preventative care, personalized medicine, and the integration of technology in health management presents a multitude of avenues for investment and growth in this sector.

Emerging trends in European venture capital

Rise of health tech and biotech

Health tech and biotech sectors within European VC continue to experience robust growth. The COVID-19 pandemic accelerated digital adoption in healthcare, giving rise to numerous startups specializing in telemedicine, health data analytics, and remote patient monitoring. Investments in these areas are expected to increase as healthcare systems and patients recognize the long-term benefits of innovation and technology in improving health outcomes.

Biotech is thriving, particularly in ‘Swiss Valley’, where collaboration between universities, research institutions, and industry leaders facilitates the rapid translation of laboratory findings into marketable solutions. Startups developing new therapies, vaccines, and CRISPR-based technologies are attracting significant attention from investors looking to fund the next breakthrough in medical science, reinforcing Switzerland's position at the forefront of biopharmaceutical innovation.

In a recent discussion with Peter Pilavachi, a GP of the PA MedTech VC fund Peter described some of the advantages Switzerland enjoys and the challenges faced by European companies in this sector:

“Switzerland’s success is built on its world-class education system and its ability to coordinate essential resources ‒ start-up infrastructure, financing, and, crucially, a business-friendly fiscal and regulatory environment. Switzerland excels in the pharmaceutical sector, whereas the US maintains a clear edge in MedTech, led by major strategics such as Johnson & Johnson, Medtronic, and Boston Scientific.

Most of Europe lags behind the US in key areas of this technology race and obtaining regulatory approval in the EU is slower, with many European MedTech companies prioritizing FDA approval over CE mark certification. The FDA’s approach is business-friendly and in general the US is more entrepreneurial, with better access to financing and has a more favorable tax environment. Entrepreneurs, being highly mobile, often relocate to jurisdictions with better incentives, contributing to brain drain in some European countries.“

Sustainability and climate tech initiatives

With Europe grappling with climate change, there has been a massive push toward sustainability and climate tech investments. The European Union has set ambitious targets for reducing greenhouse gas emissions, which has incentivized startup creation in areas such as renewable energy, waste management, and carbon capture technologies. Venture capitalists are increasingly focusing on companies that not only generate strong financial returns but also contribute positively to addressing climate issues.

Startups like Oatly in Sweden, which focuses on sustainable food alternatives, have gained traction and demonstrated the potential for VC investments to drive meaningful change. As consumers demand more sustainable products, VC firms are integrating ESG criteria into their investment strategies, fostering a new wave of innovation that tackles climate challenges while delivering financial returns.

Final thoughts

As Europe cultivates its VC landscape, regions such as ‘Swiss Valley’, ‘Silicon Canals’, and Sweden's burgeoning ecosystem represent the convergence of academia, industry, and entrepreneurship. While competition and market saturation pose challenges, the vast potential for innovation and growth in healthcare, technology, and sustainability presents untapped opportunities for investors.The dynamic interplay between established pharmaceutical giants absorbing smaller innovators and burgeoning startups creating disruptive technologies paints an exciting picture of the future of VC in Europe. As institutional investors, private equity specialists, and finance professionals continue to explore Europe, they will find lively hubs rich with potential and a community eager to drive the continent's next wave of innovation.

The right investments can position Europe as an important player in advancing innovation and sustainable growth. The time is ripe for investment in a future defined by creativity, collaboration, and transformative breakthroughs.

The journey ahead will require stakeholders to secure a balance between nurturing nascent startups and maintaining an agile, competitive posture. By acknowledging the inherent challenges and embracing the multitude of opportunities outlined, investors and entrepreneurs alike can harness the collective power of these innovation hubs to foster a new era of venture capital that promises profound societal impact and sustained economic advancement.

As Europe pushes forward, its commitment to innovation, sustainability, and collaboration will be crucial in shaping the trajectory of its VC landscape, ensuring that it remains a fertile ground for up venture firms.

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Economic

Australia's economy in 2024 has been marked by subdued GDP growth—the weakest outside the COVID-19 period—paired with persistently high inflation and elevated interest rates. However, prospects for 2025 suggest a cautiously optimistic recovery, driven by several supportive factors.

GDP Australia

One of the main drivers of this anticipated rebound is the expected easing of interest rates. Lower rates are likely to stimulate household spending and encourage business investments, laying a foundation for growth. Simultaneously, real household incomes are set to rise, helped by reduced inflationary pressures and targeted tax relief. These improvements, along with a recovering housing market, are expected to boost consumer confidence, with rising property values providing positive wealth effects. Additionally, sustained structural investments in infrastructure and renewable energy projects are likely to support economic activity.

Monetary Policies

Despite these encouraging trends, growth is projected to remain below its potential, and the unemployment rate is anticipated to peak at 4.6% by mid-2025. While this slight increase signals softening in the labour market, it is expected to play a role in moderating wage growth and inflation. In fact, trimmed mean inflation is forecast to stabilize within the Reserve Bank of Australia’s (RBA) target range of 2-3% by late 2024, creating favourable conditions for economic recovery.

Key sectors are likely to contribute differently to this growth. Household spending is expected to recover from a low base, with annual growth predicted to reach 2.0% by the end of 2025. Residential construction will see a modest recovery, aided by lower input costs and stronger house prices. Business investment, particularly in public infrastructure and renewable energy, is forecast to grow at a steady annual rate of 3%. Conversely, government expenditure may slightly decline due to policy changes, including adjustments to programs like the National Disability Insurance Scheme and the expiration of electricity subsidies. In trade, strong commodity exports are anticipated to offset slower growth in education-related services due to capped international student arrivals.

Australia’s monetary policy is also poised for a shift. Having lagged its global peers in normalizing post-COVID, the RBA is now aligned with G10 economies. With inflation easing, the RBA is expected to begin lowering interest rates in early 2025, potentially reaching a terminal rate of 3.25% by November. This reduction is likely to provide a much-needed stimulus to the economy.

However, risks to this outlook remain. Global trade uncertainties, potential policy shifts, and geopolitical events could influence the trajectory of Australia’s economic recovery and the timing of monetary policy adjustments.

In summary, while challenges persist, Australia’s economy is positioned for gradual improvement in 2025. Supportive domestic policies, a stabilizing inflationary environment, and targeted investments offer hope for a steady recovery, fostering long-term growth and resilience.

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Goldman Sachs

Economic

Worldwide GDP is forecast to expand 2.7% next year on an annual average basis, just above the consensus forecast of economists surveyed by Bloomberg and matching the estimated growth in 2024. US GDP is projected to increase 2.5% in 2025, well ahead of the consensus at 1.9%. The euro area economy is expected to expand 0.8%, compared to the consensus of 1.2%.

“Global labor markets have rebalanced,” Goldman Sachs Research Chief Economist Jan Hatzius writes in the team’s report titled “Macro Outlook 2025: Tailwinds (Probably) Trump Tariffs.” “Inflation has continued to trend down and is now within striking distance of central bank targets. And most central banks are well into the process of cutting interest rates back to more normal levels.”

The world’s largest economy is expected to grow faster than other developed-market countries for the third year in a row. The re-election of US President Donald Trump is predicted to result in higher tariffs on China and on imported cars, much lower immigration, some fresh tax cuts, and regulatory easing. “The biggest risk is a large across-the-board tariff, which would likely hit growth hard,” Hatzius writes.

The Global Economy is Forecast to Grow Solidly in 2025 Despite Trade Uncertainty_1

Will changes in trade increase US inflation?

US core PCE inflation should slow to 2.4% by late 2025, higher than Goldman Sachs Research’s prior forecast of 2.0% but still a benign level. The forecast would rise to around 3% if the US imposes an across-the-board tariff of 10%. In the euro area, our economists expect core inflation to slow to 2% by late 2025. The risk of ultra-low inflation in Japan has abated.

“A key reason for optimism on global growth is the dramatic inflation decline over the past two years,” Hatzius writes. “This directly supports real income because price inflation has fallen far more quickly than wage inflation.”

“Just as importantly, the inflation decline also indirectly supports demand by allowing central banks to normalize monetary policy and thereby ease financial conditions,” he adds.

Goldman Sachs Research expects the US Federal Reserve to cut its policy rate to 3.25-3.5% (from 4.5% to 4.75% now), with sequential cuts through the first quarter and a slowdown thereafter. The European Central Bank, meanwhile, is expected to lower its policy rate to a terminal rate of 1.75%. Our economists find that there’s also significant room for policy easing in emerging markets. By contrast, the Bank of Japan is projected to lift its policy rate to 0.75% by the end of 2025.

How will Trump’s trade policy impact the US economy?

The effects of potential new US trade policies on US GDP are expected to be small and largely offset by other factors, according to Goldman Sachs Research’s baseline outlook. Potential tariffs would result in a modest hit to real (inflation adjusted) disposable personal income via higher consumer prices. The uncertainty of how much further trade tensions might escalate would likely weigh on business investment.

“Assuming that the trade war does not escalate further, we expect the positive impulses from tax cuts, a friendlier regulatory environment, and improved ‘animal spirits’ among businesses to dominate in 2026,” Hatzius writes.

The Global Economy is Forecast to Grow Solidly in 2025 Despite Trade Uncertainty_2

In Goldman Sachs Research’s base case, trade policies may have a net drag of 0.2 percentage points on US GDP in 2025. If larger than anticipated across-the-board tariffs are implemented, that could cause a net drag averaging 1 percentage point in 2026 (though it could be lower if tariff revenue is fully recycled into tax cuts).

The US has grown faster than other big economies and is predicted to continue doing so. Goldman Sachs Research points out that labor productivity in the US has increased at a 1.7% annualized rate since late 2019, a clear acceleration from the pre-pandemic trend of 1.3%. By contrast, labor productivity in the euro area has grown at a 0.2% annualized rate over the same period, a clear deceleration from 0.7% before the pandemic.

“We expect US productivity growth to remain significantly stronger than elsewhere, and this is a key reason why we expect US GDP growth to continue to outperform,” Hatzius writes.

How US trade policies may affect other economies

The economic headwind from US trade policy is expected to be greater outside the US. In the euro area, a rise in trade policy uncertainty to the peak levels of the trade conflict in 2018-19 would subtract 0.3% from GDP in the US but as much as 0.9% in the euro area.

Our economists reduced their growth forecast for the euro area in 2025 following the US election results by 0.5 percentage points (fourth quarter over fourth quarter) and would likely cut it further if the US imposes an across-the-board tariff. The Global Economy is Forecast to Grow Solidly in 2025 Despite Trade Uncertainty_3

The Global Economy is Forecast to Grow Solidly in 2025 Despite Trade Uncertainty_3

Goldman Sachs Research expects the impact of potential US trade policy on China to be even more direct. The world’s second-largest economy may face tariff increases of up to 60 percentage points and average 20 percentage points across all exports to the US. That’s forecasted to subtract almost 0.7 percentage points from growth in China in 2025. Our economists reduced their 2025 growth forecast modestly, by 0.2 percentage points on net to 4.5%, assuming Chinese policymakers provide stimulus and some of the growth hit is offset by depreciation in the renminbi.

“However, we would likely make larger downgrades if the trade war were to escalate further,” Hatzius writes.

The Global Economy is Forecast to Grow Solidly in 2025 Despite Trade Uncertainty_4

Likewise, other countries are also likely to be buffeted by US trade policy. Goldman Sachs Research expects larger drags in more trade-exposed economies, while certain emerging market countries could get a boost by gaining export share if trade shifts away from China.

Overall, however, global economic growth is expected to be solid despite the potential for US tariffs. Our economists estimate that changes to US trade policy will subtract 0.4% from global GDP, while increased policy support should dampen the hit. But much depends on the size of any new trade restrictions. The impact could be two to three times larger if the US imposes a 10% across-the-board tariff.

“Barring a broader trade war, policy changes in the second Trump administration are unlikely to change the broad contours of our global economic views,” Hatzius writes.

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ING

Economic

Forex

Breakout

As many had been fearing and our team had been writing this week, today’s softer-than-expected European PMI numbers have proved the catalyst for a downside breakout in the euro. The numbers feed into the narrative that European business confidence is crumbling – or at least sees no way out of stagnation – in an environment of looming trade wars and political gridlock in Europe.

Our team have been saying it for a while now, but it looks like European Central Bank rate cuts will have to do the heavy lifting again when it comes to supporting the eurozone economy. Today’s data triggered an 8-10bp drop in short-dated eurozone swap rates, pushing the ‘Atlantic’ rate differential to the widest levels of the year. The market is now starting to lean towards our house view of a 50bp ECB rate cut in December and bake in a sub-neutral 1.75% ECB policy rate for next summer.

When we lowered our EUR/USD forecasts earlier this month, this was largely on the view that US:eurozone rate spreads would widen and a risk premium from trade wars would be built in later in 2025. Actually, we’re having an internal debate as to whether that risk premium should be built in earlier.

At the same time, the escalation in the Russia-Ukraine war this week has added to euro downside. The understandable fear now is that this crisis escalates into year-end as both sides try to secure the best possible positioning ahead of potential Trump-led ceasefire discussions in January. Unlike in 2022, energy prices have been remarkably subdued, although we are starting to see European natural gas prices creep higher again – a clear negative for European currencies.

The two main arguments against much further EUR/USD downside are that EUR/USD has come a long way already and that the dollar normally weakens in December. On the former, the near 7% drop in just two months is exceptional. Could this fire up the ECB hawks who might be worried about imported inflation, or least prompt some kind of comments from ECB officials about a speed of adjustment that has been too quick for European businesses? We would not rule it out, but at most such comments should slow not reverse the current EUR/USD drop.

How far could EUR/USD fall? As Francesco Pesole wrote yesterday, EUR/USD is now a little undervalued based on our medium-term BEER model – but that doesn’t preclude a move to parity. Now that the 2023 1.0448 EUR/USD low has been broken, we certainly see scope to the next support zone down at 1.0190/0200.

And in terms of positioning, our colleagues in the FX Options team suggest that investors might not be as short EUR/USD as much as they had hoped after downside barriers have been triggered today – these barriers having been used to cheapen downside FX options structures but, by being triggered, have now cancelled those downside EUR/USD structures altogether.

EUR/USD breaks to the downside of exceptionally tight range

EUR/USD: Macro and Geopolitics Align for a Downside Breakout_1

Volatility regime change?

The narrow EUR/USD ranges of the last two years have been the exception rather than the rule. And it is tempting to say that the advent of Trump 2.0 – or Trump unleashed, as many commentators are calling it – can usher in a period of higher volatility. Certainly the EUR/USD FX options market is taking note and has pushed one year EUR/USD traded volatility up to the highest levels since October.

What holds us back from concluding that yes, we expect structurally higher levels of FX volatility in 2025, is that the peak Trump trade wars of 2018-2019 saw EUR/USD traded volatility actually decline. Here, it seems investors got used to Trump protectionism back in 2018/19. The difference in 2025, however, is that we could be talking a global trade war and not just protectionism against China, which was the case in 2018-19.

We also note in the chart above that EUR/USD is breaking to the downside from a historically low volatility environment – a warning of a volatility regime change.

Given the heavy macro/geopolitical factors favouring the downside and the fact that EUR/USD is not particularly undervalued based on our medium term models, we certainly do not want to stand in the way of a EUR/USD move to parity nor fight the rise in higher traded volatility levels.

Source:ING

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Warren Takunda

Cryptocurrency

Bitcoin came within 1% of $100,000 on Nov. 22 with bulls “chewing away” at final sell orders. Bitcoin Counts Down to $100K as Shorts Risk 'Violent Breakout'_1

Bitcoin Counts Down to $100K as Shorts Risk 'Violent Breakout'_1

BTC/USD 1-hour chart. Source: TradingView

Bitcoin eats up last supply below $100,000

Data from Cointelegraph Markets Pro and TradingView confirmed the latest new Bitcoin price all-time highs near $99,500 on Bitstamp.

After a brief dip below $96,000, BTC/USD rebounded into the Asia trading session to set up what could be a showdown with six figures.

Commenting on the action, trader Skew predicted that a “violent breakout” may result once the price clears ask liquidity near the key $100,000 mark.

“Still seeing limit bids moving higher with underlying spot buyers ~ Positive market signal,” part of an X post read.

“A lot of aggregate spot supply around $100K. Price currently is chewing away at this supply, before this has preceded a pretty violent breakout.” Bitcoin Counts Down to $100K as Shorts Risk 'Violent Breakout'_2

Bitcoin Counts Down to $100K as Shorts Risk 'Violent Breakout'_2

BTC/USDT 15-minute chart. Source: Skew/X

An accompanying chart showed ladders of asks clustered in the upper $99,000 area on the Binance order book.

Earlier, Skew eyed asks appearing above $100,000 as a suggestion that the market was pricing in further “parabolic” upside once it is reached.

Keith Alan, co-founder of trading resource Material Indicators, noted that some traders were tempted to short BTC at current levels.

“Shorts are getting lured in,” he reported, echoing Skew on the likely consequences.

“If you are taking the bait, be prepared to get squeezed.” Bitcoin Counts Down to $100K as Shorts Risk 'Violent Breakout'_3

BTC liquidations (screenshot). Source: CoinGlass

The day prior, data from monitoring resource CoinGlass confirmed, short BTC liquidations reached just shy of $115 million.

Binance avoids “FOMO” volume spike

Observing exchange activity, meanwhile, onchain analytics platform CryptoQuant noted a curious trend.

After spiking as the overall crypto market cap beat its old all-time highs earlier this month, Binance’s aggregate trading volume has declined.

“The recent surge in spot trading volume (60B) on Binance occurred on November 12, coinciding with the crypto market cap nearing its previous ATH.

“However, trading volume has since decreased by half meanwhile the total crypto market cap enters price discovery mode,” contributor Darkfost wrote in a Quicktake blog post.

“This decline in spot trading activity may suggest that the market is taking a breather, with investors exercising caution.” Bitcoin Counts Down to $100K as Shorts Risk 'Violent Breakout'_4

Bitcoin Counts Down to $100K as Shorts Risk 'Violent Breakout'_4

Binance spot trading volume (screenshot). Source: CryptoQuant

Source: Cointelegraph

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Warren Takunda

Economic

The Euro to Dollar exchange rate slumped to below 1.04 for the first time in two years, putting it on course for parity after the S&P Global Eurozone composite PMI fell to 48.1 in November from 50 in October.

The market was expecting another reading of 50. A reading below 50 signals contraction for the Eurozone's private sector.

The Euro to Pound exchange rate fell a third of a per cent to 0.8297, giving a Pound to Euro conversion of 1.2050.

"Things could hardly have turned out much worse," says Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank. "The eurozone's manufacturing sector is sinking deeper into recession, and now the services sector is starting to struggle after two months of marginal growth."

Looking at the subcomponents, the Eurozone manufacturing PMI remains in contractionary territory at 45.2, down from 46. But the deterioration is most noticeable in the services sector, with the PMI falling to 49.2 from 51.6, defying expectations for a slight improvement to 51.8.

de la Rubia says the economic deterioration "is no surprise really, given the political mess in the biggest eurozone economies lately."

He explains that France's government is on shaky ground, and Germany's heading for early elections. "Throw in the election of Donald Trump as US president, and it is no wonder the economy is facing challenges. Businesses are just navigating by sight."

The S&P Global survey revealed confidence in the outlook for output dropped to the lowest for just over a year.

Companies continued to face challenges securing new orders, which decreased for the sixth month running and at a solid pace.

With new business and backlogs of work falling, firms also scaled back workforce numbers, noted the report.

This will alarm the ECB's policymakers, who are now likely to cut interest rates by 50 basis points in December.

The economy is deteriorating more broadly now, and the ECB will judge that hastening the pace of its interest rate cuts is needed to help businesses and consumers.

This development would have a negative impact on the Euro, particularly against the Dollar and Pound, where interest rates are set to remain elevated for longer.

Source: Poundsterlinglive

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ACY

Economic

Commodity

Energy

Global energy markets remain on edge as geopolitical risks, particularly stemming from the ongoing conflict between Russia and Ukraine, inject significant uncertainty into supply and demand dynamics. A recent focal point has been Ukraine's reported deployment of advanced missiles, escalating fears about potential threats to critical Russian energy infrastructure. These developments amplify concerns about retaliatory actions that could disrupt supply chains, not only in Europe but across the global energy network.

Natural Gas: A Market on Edge

Natural gas markets have exhibited pronounced sensitivity, with Europe experiencing a sharp uptick in prices as fears of supply disruptions mount. The already-tense situation was exacerbated by Gazprom's move to halt supplies to certain European operators, a decision that underscores the fragility of energy diplomacy in the region. Despite this, Russian pipeline flows through Ukraine have thus far remained stable, providing a precarious sense of normalcy.

Geopolitical Fault Lines: Uneven Ripples Across Global Energy Markets_1

European gas storage, a critical buffer against supply shocks, has seen a dip below 90% capacity, falling slightly behind the five-year average. This marks a notable shift, as earlier in the season, storage levels were considered robust. The narrowing price differentials between Asian and European liquefied natural gas (LNG) are also reshaping trade flows. With European buyers potentially outbidding Asian markets, the region could see a stronger influx of LNG shipments, especially as winter demand intensifies.

Speculative trading has further compounded market volatility. Investor activity in European natural gas futures has surged, reflecting heightened anxiety over supply risks and the perception that current storage levels may prove inadequate in the event of prolonged disruptions.

This speculative bullishness highlights a broader market expectation of elevated volatility throughout the winter season.

Crude Oil with Mixed Signals

Crude oil markets, in contrast, have exhibited a more measured response to geopolitical tensions. Prices have shown resilience, with offsetting factors tempering significant volatility. U.S. weekly inventory data revealed a marginal build in commercial stockpiles, primarily driven by increased imports. Exports, however, have also risen, suggesting robust international demand.

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Notably, gasoline markets have shown weakness, with a decline in demand contributing to a rise in inventories despite reduced refinery activity. This signals potential softness in consumer-driven fuel consumption, possibly linked to broader economic concerns or seasonal variations.

LNG Trade Dynamics: Asia vs. Europe

The interplay between Asian and European LNG markets remains a critical factor shaping global energy flows. With price differentials narrowing, European buyers are increasingly positioned to secure additional LNG cargoes. However, this comes with its own set of challenges. Asian demand, particularly from China, is expected to recover as the country continues to ease pandemic-related restrictions and stimulate economic activity. This could reignite competition for LNG, potentially driving prices higher and adding further strain to European energy security.

Gold and Safe-Haven Dynamics

Amid this turbulence, gold has emerged as a standout performer, attracting safe-haven investment. Geopolitical instability and supply chain vulnerabilities have boosted demand, pushing prices to multi-month highs. This trend underscores the broader market sentiment, where uncertainty continues to favour assets perceived as stable in times of crisis.

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The Path Ahead: Persistent Volatility

As geopolitical risks continue to evolve, energy markets are likely to remain volatile, with natural gas markets particularly exposed to sudden shifts. The delicate balance of European storage, LNG trade flows, and the potential for further disruptions underscores the precarious nature of the current energy landscape. Crude oil, while comparatively stable, may also face renewed pressure if broader geopolitical or economic factors disrupt the fragile equilibrium.

In this high-stakes environment, policy decisions, market interventions, and geopolitical developments will play pivotal roles in determining the trajectory of global energy markets. Stakeholders across industries should remain vigilant, as the interplay of regional dynamics and global trends ensures that uncertainty will remain the defining characteristic of the energy sector in the months ahead.

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Risk Warnings and Disclaimers

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