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Diversification: what it is and why it is important 

Diversification

Diversification is one of the fundamental concepts of investing, even though too many people dismiss it. But what is it? And why is it so important? 

Diversification is a fundamental principle that should guide the investment strategy of anyone who wants to enter the world of crypto. It is a concept that belongs to traditional finance, but one that has accompanied humanity throughout the entire process of civilisation. In this article, we will try to answer two questions that are as simple as they are comprehensive: what is diversification? And why is it so important?

Diversification: what is it and what does it mean?

In finance, diversification is defined as a strategy or fundamental principle for minimising risk: in concrete terms, it means spreading financial resources across a diverse range of assets, rather than concentrating capital on a single investment. The prime example, the timeless classic used by those who want to explain this concept in a simple way, is that of eggs in a basket. More precisely, the phrase ‘don’t put all your eggs in one basket!‘, accompanied by an index that swings back and forth, solemn as an oracle. 

Joking aside, the comparison is apt: diversification means avoiding putting all your eggs in the same basket. The reason is simple: if all your eggs are in one basket and, unfortunately, it slips out of your hands, you’ll end up with an inedible omelette. In other words, you would have lost everything. But if the same number of eggs had been wisely distributed across several baskets, you would have lost the contents of one of them, preserving the rest. Similarly, as you can easily understand, spreading your investments across several different assets greatly reduces the risk of losing everything in one fell swoop. And your portfolio will thank you for it.

If you think about it, as we mentioned in the introduction, this rule has been around for centuries, since the dawn of civilisation. As early as the Neolithic period, communities raised several types of livestock at the same time – including cows, sheep and goats – in order to have different qualities of food and material resources available, but also to prevent, for example, a single disease from wiping out all their animals. Even during the Middle Ages, farmers understood the importance of growing several types of cereals using a three-year rotation system. The advantages were obvious: improved soil fertility, increased overall production and reduced risk of famine, as losses caused by a bad harvest were offset by the others. 

Among other things, diversification also determines our diet. Obviously, it would be wonderful to eat pizza every day, but it is essential to alternate with healthier, more boring foods to avoid digging our own graves. In short, if diversification guides every aspect of human life, why shouldn’t it do the same for our investments?

Diversification: Why is it important?  

Diversification, as previously explained, is an essential criterion from a conservative perspective, i.e. risk reduction. At this point, one might rightly object: ‘I don’t care about risk, I want to put all my money on that meme coin and become a millionaire in three days’. Fair enough, but this is not investing; it is gambling, and the chances of winning when gambling are extremely low. Returning to investing, diversification also makes sense from a profit perspective, as it allows you to avoid missing out on the asset or assets of the decade. 

Let’s take a concrete example from the internet megatrend of the early 2000s, just after the dot-com bubble burst. At that time, the main use case for the internet was search, and Google was the undisputed king. You could have legitimately thought that the Californian company was the only horse worth betting on, as it dominated almost non-existent competition. Today, that choice would have undoubtedly proven you right, as Google’s share price has grown by more than 6,000%, but you would have kicked yourself. Why? By viewing the internet as a tool designed exclusively for online search, you would have missed out on other companies such as Netflix and Amazon, which have outperformed Google by carving out their own slice of the market. 

Diversifying in the crypto world

Diversification in the world of cryptocurrencies follows the dynamics of the example just described: it depends on how you understand blockchain and its use cases. Bitcoin is, without a doubt, the dominant player in this world, as it alone accounts for more than 64% of the market. However, its usefulness is ‘limited’ – for now – to payments and being a store of value, although BTCFi could show promise. So, if you believe that blockchain will not go beyond Bitcoin, then it makes sense to invest everything in it, at your own risk. 

It is undeniable, however, that blockchain is slowly but surely making its way into other strategic sectors, and the future could hold surprises in this regard. The key point is to take a step back and look at the situation as a whole: don’t focus on the present so as not to be misled by heuristics and cognitive biases, but, as the philosopher Baruch Spinoza would say, consider things sub specie aeternitatis – in the light of eternity – in an absolute and universal sense. This is precisely what diversification means: avoiding overexposure to a single cryptocurrency, both to reduce risk and to avoid missing out on huge opportunities such as Ethereum, which rose by 1,880% between 1 January 2020 and 1 January 2025. 

Clearly, in order to invest wisely, you need to stay up-to-date and stay on top of what is happening in this constantly evolving world.

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AI and energy: the integration of the future?

AI and Energy

Artificial intelligence and energy together could revolutionise the energy sector. How? What are the predictions for the future? 

Strategically integrated, artificial intelligence and energy could revolutionise the energy sector in every way, from optimising existing structures to innovating in crucial technological areas. In this article, we will analyse the current situation, experts’ predictions for the future and the challenges that this interaction will inevitably face. 

Artificial intelligence and energy: why is reflection necessary? 

Artificial intelligence and energy must be considered together, as two sides of the same coin, due to their dual and symbiotic relationship: AI needs energy, and therefore the energy sector needs the potential of AI to evolve and innovate in a context of constantly increasing demand.  

The relevance of the topic is such that the IEA (International Energy Agency), an intergovernmental organisation working for global energy security and the promotion of sustainable energy policies, published a report in April 2025 entitled ‘Energy and AI‘. In these 304 pages, the aim is to demonstrate to the world a very clear thesis: the revolutionary potential of artificial intelligence must be exploited to maximise innovation and efficiency in a strategic sector such as energy. This integration, says the IEA, is essential to optimise, rethink and renew a system that, day after day, must meet the growing needs of the population, industry and services.

Now that the reasons are clear, it is time to delve deeper to answer specific questions: how much do AI data centres consume – and will they consume in the future? How will demand be met? Furthermore, how can AI help the energy sector? What will be the main challenges? Let’s see how the IEA experts responded.

Why does artificial intelligence need the energy sector?

The answer to this question, as you might guess, is simple: because it consumes – a lot – and will consume more and more as it becomes more widespread in various areas of daily life. To put it another way, AI could represent a revolution comparable to the discovery of electricity, precisely because of its status as a general-purpose technology. Apparently, Wall Street is well aware of this, given that between the launch of ChatGPT in November 2022 and the end of 2024, approximately 65% of the growth in the market cap of the S&P 500 is attributable to companies linked to artificial intelligence. This percentage is roughly equivalent to $12 trillion (twelve thousand billion) – also worth noting is the interest in the Crypto AI category, as in the case of Grayscale. 

As in the most classic of circular dynamics, such a massive injection of capital has triggered an investment rush, with major tech companies planning to spend up to $300 billion on artificial intelligence-related assets, facilities and equipment in 2025 alone. Of course, much of this funding is absorbed by data centres, which are essential for the training and implementation of AI, but are extremely energy-intensive. 

How much do data centres consume?

Data centres, defined as a complex of servers and storage systems for data processing and storage, currently account for around 1.5% of global electricity consumption, or 415 TWh (terawatt hours): a data centre designed for AI, for example, can require the same amount of electricity as 100,000 average households, while those under construction – significantly larger – could be up to 20 times that amount. 

Looking ahead, from 2017 to today, data centres have increased their electricity consumption by 12%, which is four times faster than total global consumption. This means that if the planet Earth has increased its electricity demand by 3% since 2017, data centres have required four times that rate of growth. Needless to say, the most important driver of this increase is artificial intelligence, followed by digital services, which are also in high demand. In all this, the IEA reports that, in 2024, the top three global consumers will be the United States (with 45% of the total), followed by China (25%) and the European Union (15%).

So, if data centre consumption currently stands at 415 TWh, the IEA report estimates that this figure will double by 2030, reaching around 945 TWh, slightly more than the total consumption of Japan. As for projections for 2035, the report refers to a ‘scissors effect’, as it includes variables related to the development of efficient energy-saving solutions in its calculations. In any case, the range is from a minimum of 700 TWh to a maximum of 1,700 TWh. 

This incredible increase is linked both to the greater ‘physical presence’ of data centres around the world and to their intensified use, assuming that, in the future, AI will spread to every corner of the cities in which we live. In fact, in terms of consumption, the most significant impact is during the operating phase rather than during production or configuration: a latest-generation 3-nanometre chip requires approximately 2.3 MWh (megawatt hours) per wafer – the circular slice of silicon on which the circuits are manufactured – to be produced, 10 MWh to be configured and 80 MWh to operate during a five-year life cycle.  

How can this demand be met in the future?

The report answers in the only way possible, namely with a diversified range of energy sources. In particular, in the baseline scenario – obtained from an analysis of current conditions, without including optimistic or pessimistic variables – renewables and natural gas should drive this energy mix, with the former covering about half of demand (450 TWh) and the latter accounting for almost a quarter (175 TWh). Next comes nuclear energy, which, with the implementation of small modular reactors (SMRs), could contribute slightly less than natural gas. 

Let’s now shift our focus to the energy sector. 

Why does the energy sector need artificial intelligence?

Because, as is evident, artificial intelligence is capable of optimising every aspect of the energy sector: exploration, production, maintenance, safety and distribution. In short, applying AI to the energy sector, as we mentioned at the beginning of this article, could revolutionise it. Let’s look at some specific cases: 

AI and energy together in the oil and gas industry

The report informs us that in this area, the adoption of the winning combination of artificial intelligence and energy has occurred ahead of the average. The main uses relate to the optimisation of reservoir exploration and identification processes, the automation of hydrocarbon extraction activities – well management, flow control and fluid separation – but also everything related to safety and maintenance: leak detection, preventive maintenance and emission reduction. In the future, the IEA reports, this integration could translate into a 10% saving in operating costs in deep waters. 

Artificial intelligence in the electricity sector

In the field of electricity, the IEA report predicts that AI will play a key role in balancing networks, which are becoming increasingly digitised and decentralised – as is the case with rooftop solar panels. Specifically, AI could improve the forecasting and integration of renewable energy generation by reducing curtailment – forced reduction – and, therefore, emissions. In simple terms, this means that artificial intelligence, thanks to its ability to analyse endless series of data, would be able to make more accurate predictions about renewable energy production (which is influenced by the weather) and average demand. This would make it possible to integrate renewable energy with other energy sources in a more precise and intelligent way, avoiding unnecessary waste associated with the arbitrary blocking of excess electricity (curtailment). 

There is also an interesting issue related to increasing the efficiency of existing networks. In a nutshell, integrating AI would unlock up to 175 GW (gigawatts). How? Through the use of remote sensors and management tools capable of reading and processing huge amounts of data in real time. Currently, electricity grids – or transmission lines – carry a maximum amount of electricity based on static and conservative conditions, calculated with a very wide safety margin: during the summer, for example, air temperature and wind are measured conservatively to prevent excessive electrical flow from causing cables to melt or similar problems. The result is that, most of the time, networks operate at low capacity. With AI-based management, these conditions would change from static to dynamic – Dynamic Line Rating, DLR – and allow real-time control of the load capacity of the networks themselves, with positive effects on the amount of energy circulating.   

Finally, artificial intelligence applied to the electricity sector could make a concrete contribution to network fault detection and preventive maintenance of power plants. In the first case, by speeding up problem localisation operations, with a 30-50% reduction in outage duration. In the second, by optimising the identification of potential damage, giving advance warning of the need to replace crucial components, with estimated savings of $110 billion by 2035.

AI in industry, transport and building heating

To conclude this section, the report briefly touches on the three areas belonging to the macro-category of ‘end uses’, i.e. the uses to which energy is put after distribution to end users. With regard to industry, the IEA quantifies the benefits of implementing AI applications as savings equal to Mexico’s total consumption today. Then, in transport, it talks about cuts equivalent to the energy used by 120 million cars, thanks to traffic and route optimisation. Finally, AI could improve the management of heating systems in civil and non-civil buildings, with an expected reduction in electricity use of around 300 TWh – the amount produced by Australia and New Zealand in a year. 

Artificial intelligence and energy: innovations

Artificial intelligence can contribute significantly to energy innovation as it is capable of rapidly searching for molecules that can improve existing tools. Thanks to the combination of predictive and generative models and endless academic literature, AI exponentially accelerates the process of selecting candidates and creating suitable prototypes. In particular, four key areas would benefit from the potential of AI:

  • Cement production, making the research and development of new mixtures more efficient and reducing the use of clinker, a highly polluting component that forms the basis of cement itself.
  • The search for CO2 capture materials, such as MOFs (Metal Organic Frameworks), reduces energy consumption and costs associated with CCUS (Carbon Capture, Utilisation and Storage, the process of capturing CO2 for reuse or storage. 
  • The design of catalysts for synthetic fuels, i.e. substances that accelerate chemical reactions to produce low-emission fuels. The difficulty in designing this type of catalyst lies in the infinite number of possible combinations between molecules, a process that AI can greatly accelerate. 
  • Battery research and development, facilitating material testing, performance prediction, production optimisation and end-of-life management processes. 

What are the challenges of integrating AI and the energy sector?

The report concludes by presenting, as it should, the obstacles that this ambitious project will face. First, the IEA warns us that increasing digitalisation, while having positive implications for energy security, inevitably also brings with it specific risks, such as vulnerability to cyberattacks. A fundamental problem also concerns the security of energy supply chains: chips, as is well known, require large volumes of rare earths and critical minerals, which are concentrated in a few areas of the world – China controls 98% of gallium refining. A third issue relates to the decoupling of investment in data centres and investment in energy infrastructure, which is vital for the functioning of the system. Finally, there is the issue of the lack of digital skills and qualified personnel, coupled with poor dialogue between institutions, the tech sector and the energy sector. 

I don’t know about you, but after reading and analysing this report, we are fairly convinced that artificial intelligence will also rule in this sector: burdens and honours, risks and opportunities. But then again, nothing ventured, nothing gained.  

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Lithium: what is it used for? Batteries, medicines and other uses

Lithium

What is lithium used for? What are lithium batteries? How does lithium work as a medicine? Let’s find out why this metal is in such high demand!

Lithium is a silvery-white metal that, in recent years, has become a critical resource in high demand by world superpowers and beyond. The reasons behind this incredible growth in demand can be found in its many uses: batteries, medicines, ceramics, lubricating greases and more. In this article, we will explore a mineral that has become so popular in just a few years. Let’s get started!

Lithium: what it is, who controls it and who is fighting over it

Lithium is the lightest and least dense alkali metal on Earth. It is silver-white and oxidises on contact with water or air, taking on a darker colour. It has unique physical characteristics that make it highly sought after in various fields, as we will see below. Among these, lightness, high energy density – i.e. the ability to store a lot of energy in a small space – and reactivity are the most important for the industrial world. 

But how does the lithium supply chain work? What is the geopolitics behind this metal? To answer these questions, we have read and studied the report by the IEA (International Energy Agency) entitled ‘Global Critical Minerals Outlook’, published in May 2025. What do the experts tell us?

Who are the leading producers of lithium?

The first significant figure that highlights the importance of this metal concerns its production: in 2024, global lithium extraction recorded a substantial increase of 35% or more, for a total of 255 kilotonnes (kt) – by way of comparison, the world’s tallest skyscraper, the Burj Khalifa, weighs around 110 kt. The top five lithium producers in the world are unusual, as they include countries that are not often heard of. 

Australia ranks first, with 90 kt of lithium extracted in 2024, taking the gold medal by a wide margin. According to the IEA, this gap is set to widen: by 2030, mining of this metal is expected to grow by a further 30-35%, reaching 124 kt. Second place goes to China, with 57 kt in 2024, while the last step on the podium goes to Chile, which produced 49 kt of lithium last year, earning the status of dominant producer in Central and South America. For fourth place, we have to move to the African continent, more precisely to Zimbabwe, with 23 kt. Finally, in last place is another South American country, Argentina, which extracted 13 kt of lithium from its mines. In this regard, the IEA reports that this country increased production by 65% in 2024, to become an even more important player by 2030. 

Another figure worth mentioning concerns the concentration of mining activities: while in 2024 the top three producers accounted for 77% of global lithium production, by the end of this decade, the IEA expects this share to fall to 67%. Such a change indicates a certain geographical diversification, reflecting a widespread desire to enter this market. Analysts believe that by 2030, the share produced by the ‘rest of the world’ will rise from the current 17 kt to 49 kt. In addition, the amount of lithium extracted globally will double over the next five years, reaching a total of 471 kt. 

Once lithium has been extracted, who is responsible for refining it?

In 2024, according to the report, global production of refined chemicals was 242 kt. The discrepancy between lithium extracted (255 kt) and refined lithium is, of course, due to the inherent and inevitable inefficiencies of purification processes. In any case, 96% of these activities are concentrated in the top three countries in the refiner rankings, but it is believed that by 2030, the oligopoly will lose some market share, falling to 85%. Speaking of rankings, let’s take a look at the top five.

In first place is China, in a position of absolute dominance, which in 2024 processed 170 kt of lithium chemicals: the People’s Republic alone controls 70% of total global refining. It has no intention of stopping, as this figure is expected to rise to 277 kt by 2030. Second place goes to Argentina, which refines the same amount of lithium that it extracts, i.e. 13 kt. The bronze medal goes to Australia, a country that is only interested in extraction. Only 4.5% of the lithium collected in the fantastic land of kangaroos is refined, i.e. 4 kt. In fourth place are the United States and South Korea, with 3 kt of lithium each. With 1 kt produced in 2024, the last place in this special ranking goes to Japan.

Returning quickly to China, the IEA states that, despite having a near-monopoly on refining processes, the Dragon could lose a significant share of the market in ten years. Specifically, its share could fall from 70% to 60% by 2035. This is also because, according to forecasts, Argentina and the United States are expected to increase their refined lithium kt by 270% and 800% respectively, i.e. from 13 to 49 kt and from 3 to 27 kt.

The lithium market: what is the demand? 

In 2024, lithium saw a 30% increase in demand: the energy sector, of course, drove this increase, precisely because of the fundamental role this metal plays in the construction of batteries, electric machines and components for renewables. 

As for future demand, the IEA envisages three different scenarios with three different types of output. These scenarios are called STEPS, APS and NZE: the STEPS (Stated Policies Scenario) is the baseline scenario and represents the future as a continuation of the present, with current energy policies remaining in place; the APS (Announced Pledges Scenario) assumes that governments will achieve their energy and climate targets, such as phasing out fossil fuels and increasing renewable energy; the NZE (Net Zero Emission) scenario depicts a future in which the global energy sector has achieved net zero emissions by 2050.

In the first scenario – STEPS – lithium demand is expected to rise to 700 kt by 2035 and 1,160 kt by 2050, growing almost fivefold compared to 2024. In the second and third scenarios – APS and NZE – demand would be 30% and 20% higher than in the baseline scenario, reaching 1,500 kt and 1,400 kt, respectively. 

And the price? 

The price of lithium is a topic that may seem counterintuitive at first glance: since 2023, the value of this metal has fallen by 80%. One might wonder how this is possible, given that there was a 30% increase in demand in 2024 alone and that demand is set to increase fivefold over the next twenty years. The answer, as the law of supply and demand dictates, lies precisely in supply, which has grown exponentially and is set to continue on this trend.

Lithium is the 25th most abundant material on Earth and, unlike gold and Bitcoin, it is not scarce. This means that if demand rises, even by 30% in a year, supply adjusts more or less easily, and the price remains stable or even falls in the event of overproduction. However, to give a couple of figures, the cost of lithium in a typical 57 kWh battery – a battery for a common medium-sized electric car – has fallen from $67 to $15.   

Since we were talking about batteries and electric cars, let’s move on to the next section, which covers the main use cases.

What is lithium used for? The main use cases

As we have pointed out several times, lithium owes its popularity mainly to the energy sector, the primary driver of demand, particularly for electric car batteries. However, there are other, less well-known but essential applications. The pharmaceutical industry, for example, uses lithium as a drug in the treatment of specific psychiatric disorders. In contrast, the manufacturing sector uses it in glass and ceramics processing, as well as in machine lubrication. Let’s look at each case individually. 

What are lithium batteries?

Lithium batteries, or more correctly, lithium-ion batteries, are highly functional batteries because they are smaller, lighter, and more powerful than traditional batteries, such as lead batteries. This type of battery is such an important innovation that in 2019, its three inventors received the Nobel Prize in Chemistry. 

Today, lithium batteries power smartphones, laptops, electric cars and more, precisely because this metal has a particular physical characteristic that gives it a significant advantage over its competitors: high energy density. Put simply, this means that, for the same weight or volume, lithium batteries can store and release much more energy than older, more conventional batteries. What’s more, they are rechargeable—a win on all fronts. 

How does a lithium battery work? Without going into too much detail, these batteries work thanks to lithium ions, which is why it is more accurate to call them lithium-ion batteries: an ion, in a nutshell, is an atom that has lost an electron and therefore takes on a positive charge. The battery is composed of two main elements, the cathode and the anode. What happens, explained in straightforward terms, is that during the discharge phase, when the battery supplies energy, the lithium ions move from the anode to the cathode, generating electricity. 

In short, thanks to the invention of three scientists, we are now able to produce increasingly compact, lightweight and efficient technological devices. 

Lithium as a drug 

Lithium is mainly used in medicine to treat bipolar disorder, a psychiatric condition characterised by extreme mood swings, in which the patient alternates between states of intense euphoria and irritability – episodes of mania and hypomania – and periods of deep depression. Thanks to its properties, this particular metal is used to reduce the switches between the two moods as much as possible and thus stabilise mood. 

The effectiveness of lithium as a drug in this field was discovered in the late 1940s by John Cade, an Australian psychiatrist who was captured by the Japanese during the war. The doctor noticed that some of his cellmates, due to poor nutrition, were exhibiting unusual behavioural reactions. After the war, Cade resumed his studies and discovered that lithium carbonate had a calming effect on laboratory animals. He tried this chemical compound on himself and ten patients and, documenting the treatment, noticed significant improvements in the psychiatric condition of the subjects. However, the discovery went unnoticed, but twenty years later, Danish psychiatrist Mogens Schou decided to revisit the discovery and validate it scientifically, following experimental methods. In 1970, the research was finally reviewed, accepted and validated: lithium was undoubtedly an effective drug for the treatment of bipolar disorder. 

Lithium: side effects

Like all drugs, lithium is not without side effects. The less serious ones, which do not require immediate medical attention, include stomach ache, indigestion, weight loss or gain, swollen lips, excessive salivation and itching. There are other effects for which it is advisable to seek medical attention quickly, such as severe thirst, swelling of the legs, difficulty moving, fainting, abnormal heartbeat, and severe headaches. Finally, those that require immediate medical attention include severe dizziness and blurred vision, slurred speech, severe drowsiness, nausea and vomiting. 

Other uses 

As already mentioned, lithium is also used in other sectors, such as manufacturing, industry and chemicals. Here are some examples: 

  • Glass and ceramics: Lithium is used to lower the melting temperature of glass and ceramics, resulting in significant energy and cost savings. It also has positive effects on the strength, durability and shine of the final products.
  • Lubricating greases: the industrial and automotive sectors use lubricating greases containing lithium because they are highly resistant to water and high temperatures. 
  • Organic chemistry and polymers: Some lithium compounds are frequently used by the chemical industry because of their powerful reactivity. In particular, they are essential for the manufacture of synthetic rubber.

We have come to the end of this long journey to discover this metal and the infrastructure behind its production, refining, distribution and demand. Will lithium remain as important in the future? Will other technologies replace it?

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Cobalt: The Story of an Artistic Metal

cobalt

Cobalt-chrome alloys are biocompatible and wear-resistant, making them ideal for prosthetics — both orthopaedic (knee and hip) and dental (crowns and implants).

Now, let’s move to a more relaxing subject: cobalt in art.

Cobalt Blue: A Colour That Made History

Cobalt blue was first created in the early 1800s in France, driven by both artistic and economic motives.
Until then, blue was far from a “democratic” colour. The most prized — and widely recognised — shade was ultramarine, considered the ultimate blue. However, it was extremely expensive because it was made from lapis lazuli, a precious stone imported from Afghan mines — hence “ultra-marine” — and literally worth its weight in gold.

The price was so prohibitive that painters of the time would only use it for their most important works. Whenever possible, they replaced it with a cheaper pigment, azurite. But the result was far from identical — a bit like drinking a Campari Spritz made with a knock-off Campari at a third of the price. The need was clear: a blue with the same qualities as ultramarine, but at a much lower cost.

Why and How Cobalt Blue Was Born

Enter Jean-Antoine Chaptal, the French Minister of the Interior, who tasked renowned chemist Louis-Jacques Thénard with finding a cheaper alternative to ultramarine. In 1802, Thénard discovered that by sintering cobalt monoxide with aluminium oxide at 1,200°C, he could create a mixture that met the Minister’s requirements.

From that point on, artists could experiment with a colour that had previously been too expensive to waste. The importance of having cobalt blue in large quantities was such that the famous painter Pierre-Auguste Renoir is said to have remarked: “One morning, since one of us had no black, he used blue instead: Impressionism was born.” Such a thing would have been unthinkable with ultramarine.

Monet and Renoir began to use cobalt blue consistently for shadows, abandoning black. Beyond Impressionism, other great painters embraced it in their masterpieces: Van Gogh in The Starry Night, Kandinsky in The Blue Rider, Miró in Figures at Night Guided by the Phosphorescent Tracks of Snails, to name a few. A true revolution.

An Interesting Thought: What Links Cobalt to Bitcoin?

Beyond art, the story of cobalt prompts a reflection that touches on a theme close to us at Young Platform: the centralisation of supply chains and the risks that such oligopolies bring. In short, it’s a parallel between the shift from ultramarine to cobalt blue and the transition from the gold standard to the fiat currency system.

From Ultramarine to Cobalt Blue

As we’ve seen, the introduction of cobalt blue in 1802 had a positive impact on the art world, making experimentation possible with what had been an elitist colour. However, this shade — still widely used today — is heavily dependent on cobalt extraction and refining, which are concentrated in the hands of very few players.

Leaving aside the critical ethical issues — such as child labour and human rights violations, sadly ignored by countries like the Democratic Republic of Congo and China — the logistical reality is this: 81% of global cobalt extraction and 89% of refining are controlled by just three companies.

This is dangerous because it makes the system vulnerable to both internal shocks (political instability, domestic economic issues) and external shocks (natural disasters, wars). If any of these actors halt production, the global supply chain suffers. The result is a heavy dependence on a handful of players who can effectively dictate terms.

From the Gold Standard to the Fiat Standard

Similarly, on 15 August 1971, US President Richard Nixon announced the end of the Gold Standard — the “Nixon Shock” — ending the convertibility of the US dollar into gold and moving to a fiat currency system.

In this system, still in place today, the value of a currency like the US dollar is backed only by the economic and political trust in the issuing government — in this case, the US government.

This shift, much like the cobalt example, created a more “democratic” and flexible environment. Previously, governments struggled to finance large public projects due to the gold constraint; now, they had full control over the money supply. But again, the power is centralised in the hands of a few actors — namely, central banks such as the Federal Reserve or the European Central Bank.

While such centralisation can help manage inflation and crises, it’s not without risks, especially because it relies heavily on human judgement, which is inherently fallible, as the 2008 subprime mortgage crisis demonstrated. The fate of the global economy can depend on the decisions of a handful of high-ranking officials. When those decisions are good, great. But when they’re bad…?

The Moral of the Story: Bitcoin and Decentralisation

Concentrating too much power in too few hands is never a good thing. Politics, economics, finance, housing committees, university group projects, and even five-a-side football teams work poorly when a single entity makes all the decisions.

Bitcoin was created precisely to address this: to return power to individuals and remove — or at least limit — the influence of central authorities. Its decentralised nature allows for a more democratic system, where people interact directly, without intermediaries who could control or restrict their choices.

Of course, this is just one of Bitcoin’s many qualities and real-world use cases. If this introduction has sparked your curiosity, we recommend reading our article on the history and workings of BTC to get a complete picture of the revolutionary potential of the king of cryptocurrencies.

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How to create images with artificial intelligence

images with artificial intelligence

How to create images using artificial intelligence: Where do we stand? Discover all the steps in this comprehensive guide.

If you, too, have seen the images created by artificial intelligence – and if you haven’t, who knows where you live – your crevello will have ventured an argument like this. There was a time, not so long ago, when creating an image required pencils, brushes, cameras or, for the more modern, graphics tablets and hours of painstaking patience. Then, almost out of nowhere, generative artificial intelligence exploded. Suddenly, our social feeds, company presentations and even group chats were filled with dreamy, hyper-realistic and bizarre images, all spawned by an algorithm. “You want a Van Gogh-style astronaut cat eating ice cream on Mars? Give me two minutes.”

This new frontier of digital creativity has triggered a mixture of wonder and apprehension. On the one hand, the promise of democratising art, of giving anyone the power to visualise the impossible; on the other, the fear of a future where real artists, those in the flesh, end up begging robots. But before we panic or exclaim, let us try to understand how artificial intelligence creates images.

Creating images with artificial intelligence: what’s behind the magic?

Behind the apparent wizardry of an image that comes from a simple sentence, there is a concentration of technology that, until a few years ago, was the stuff of science fiction films. We are talking about machine learning and neural networks, i.e. software that attempts to imitate the functioning of the human brain. These systems are ‘trained’ on endless databases containing billions of existing images, each accompanied by a textual description.

The models most in vogue today, such as those based on ‘Diffusion’ architectures (such as Stable Diffusion, DALL-E 3, Midjourney), learn to associate words with visual concepts. In practice, they start from a digital ‘noise’, a kind of indistinct fog, and, guided by our textual input (the famous ‘prompt’), begin to ‘sculpt’ this noise, one small step at a time, until the required image emerges. Imagine a sculptor pulling a statue out of a shapeless block of marble, only the marble is digital, and the chisel is an algorithm that has seen more works of art than any living critic. The result? Sometimes a masterpiece, other times something that looks like something out of a Dali nightmare after a heavy dinner.

How to generate images with AI: instructions for use

If you think it is enough to type ‘cat’ to make artificial intelligence create the image of a purring feline from the screen, you will be disappointed. The art of dialoguing with these AIs, known by the somewhat pretentious Anglophone term prompt engineering, is a subtle discipline, somewhere between poetry and programming.

You have to be specific, almost pedantic. You want a ‘dog’? Fine, but what breed? What is it doing? Where is it? In what light? In what pictorial style? “A golden retriever puppy sleeping blissfully in a red velvet armchair, illuminated by warm afternoon light, Renaissance oil painting style”. There, now we’re getting somewhere. 

Then there are the negative prompts, or instructions on what NOT to do: “no double tails, please”, “avoid that plastic effect”, “I beg you, no more than five fingers on each hand!”. The process is iterative: you generate, observe the result, refine the prompt, regenerate, and so on, in a loop that can lead to the perfect image or to deciding that, perhaps, a hand-drawn picture was better. At first, it is easy to get digital abominations: that ‘cat on a bike’ might turn into a Lovecraftian tangle of fur and pedal metal. But with a little practice (and a lot of patience), you can begin to tame the algorithmic beast and start creating quality artificial intelligence (AI) images.

 Lights and shadows: the pros and cons of AI-generated images

Like any self-respecting technology, image-generative AI also brings with it a wealth of opportunities and a few skeletons in the cupboard. Here is a brief summary of what, at least in our opinion, are the pros and cons of this technological breakthrough.

Pros:

  • Democratisation of creativity: anyone, even someone who draws like a three-year-old, can give visual form to their ideas. Need a logo on the fly? An illustration for a post? An inspiration for a tattoo? Ask and (maybe) you’ll get it;
  • Speed and efficiency: for designers, creatives and marketers, it is a crazy tool for brainstorming, creating moodboards, concept art, and rapid prototypes. Hours of work condensed into a few minutes;
  • New aesthetic horizons: AI can mix styles, invent perspectives, create images that a human might not conceive, opening up unprecedented art forms;
  • Pure fun: let’s face it, asking the AI to draw absurd things is often hilarious;

Cons:

  • The six-finger nightmare (and other amenities): the infamous ‘uncanny valley’ is always lurking. Hands with too many or too few fingers, faces that melt like wax, seasick perspectives, objects that defy the laws of physics. Sometimes, the results are so surreal that they themselves become an unintentional art form.
  • The fair of the generic: with the ease of use, the risk is a rising tide of images that are aesthetically pleasing but devoid of soul, all a bit the same, a bit ‘Midjourney effect’. The world is now invaded by cyberpunk kittens with a variable (but hardly ever correct) number of legs.
  • The crisis of originality: if everyone uses the same tools and maybe even similar prompts, don’t we risk a stylistic flattening?
  • But is this art?: the debate is open and heated. If a machine ‘makes’ the work, is it still art? Who is the artist? Who writes the prompt, or the algorithm? My cousin, who until yesterday was only making memes of dubious quality, now calls himself ‘an international prompt artist’, complete with a portfolio on LinkedIn.

And from a philosophical point of view?

And here the matter gets serious, because the implications go far beyond the number of fingers. The first problem, which has long been central to the debate on artificial intelligence, not only when it is used to create images, is related to copyright and the question: whose image is generated? Of the user who wrote the prompt? Of the company that created the AI? Or is it a derivative of the myriad images used for training, many of which may be copyrighted? At the moment, it’s a legal Wild West. And what about the prompting ‘in the style of [famous living artist]’? Is it homage or theft?

Then there is the work-related issue. Will artificial intelligence destroy the market for illustrators, photographers, graphic designers, or just make it more productive? We like to be optimistic, imagining a world where AI is a powerful ‘creative assistant’, freeing humans from superficial tasks and allowing us to focus on the most valuable tasks.

Let us close with the two main ethical dilemmas. The first is frightening and concerns the ease with which false but realistic images can be created with intelligence. Photos of events that never happened, faces of people stuck on the bodies of others. The implications in terms of disinformation, manipulation of public opinion, and trust in sources are enormous. Distinguishing the true from the plausible will become an increasingly challenging task.

Finally, it must be emphasised that AIs are trained on data created by human beings. If this data contains prejudices (gender, ethnic, cultural), the AI will learn and replicate them, which may lead to the creation of stereotypical images or the exclusion of certain representations. The algorithm, in short, can be as racist or sexist as the societies that nurtured it.

In short, the possibility of creating images with artificial intelligence is certainly as revolutionary as the invention of photography or digital photo editing. As we are increasingly realising, AI is an incredibly powerful tool, capable of democratising creativity, accelerating production processes, but also raising profound questions about the nature of art, work and truth itself. Like any tool, its impact – beneficial or maleficent – will depend on how we choose to use it, adjust it and integrate it into our lives. It is neither a demon to be exorcised nor a magic wand that will solve every problem. It is, more prosaically, a powerful new set of digital crayons available to humanity. Get ready for a future where, in order to understand whether your friend’s holiday photo is real or ‘prompt’, you will need a trained eye, a second coffee and, perhaps, an honorary degree in the philosophy of perception. The good (and the bad) has just begun.

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Donald Trump and tariffs: the truth hurts you

donald trump

US President Donald Trump has supported the duties with often false or inaccurate statements. Here we will look at the most sensational ones. Enjoy!

US President Donald J. Trump based his campaign on the need to make America great again – Make America Great Again – and did so to the tune of slogans and catchphrases such as ‘America First!’ and ‘return to the Golden Age’. The trade tariffs, imposed, then lifted, and then reinstated, are the result of this strategy and are justified by blows of impressive statements. The problem is that many of these are unfounded. Off to fact-checking!

Donald Trump, when talking about the United States, tends to inflate the figure.s

Donald Trump is a proud American and, as such, is prone to magnifying everything about the United States of America, including numbers. Let us examine some sovereignist flare-ups: 

  • The Paris Climate Agreement cost the United States trillions of dollars that other countries were not paying. In Congress on 4 March 2025, Donald Trump justified his exit from the Paris Climate Agreement in this way: untrue, the United States has never earmarked even remotely similar sums for the Agreement. Joe Biden, when he took office, promised to allocate around $11 billion per year, a figure that was later scaled back. 
  • ‘Honda has just announced a new plant in Indiana, one of the largest in the world‘. Also at the Congress on 4 March 2025, the US President declared in a triumphant tone the construction of a new industrial hub by the Japanese giant: untrue, Honda had expressed its intention to build the latest Honda Civic in Indiana rather than Mexico, as reported by Reuters, without confirming this.  
  • ‘The US is collecting $2 billion a day from customs duties. ‘. Statement of 8 April 2025, during a speech to coal industry workers: false, the figure is in the hundreds of millions, not billions and, most importantly, the duties are borne by American importers, not foreign exporters.  
  • “We were losing $2 trillion a year on trade“—sentence uttered by Donald Trump on 22 April 2025 during an interview with Time in the White House. Here, the POTUS refers to the US trade deficit with the rest of the world before his arrival: false, in 2024 the imbalance amounted to some $918 billion, in 2023 to $773 billion, in 2022 to $945 billion, and so on. 
  • ‘I have signed 200 agreements. ‘. On 25 April 2025, in the same interview with the Times, when asked, ‘Not a single one (trade agreement, ed.) has been announced. When will you announce them?” Donald Trump replied with a dry “I have closed 200 deals”: untrue, there was – and is – no evidence to validate this claim.

Donald Trump and the European Union: not quite love at first sight

That the President of the United States of America has no excessive sympathy for the Old Continent is a well-known fact: just recently, he confirmed this ‘slight’ antipathy by raising tariffs to 50%. Let us see why: 

  • “They don’t buy our cars, they don’t buy our food. They don’t buy anything.” On Sunday, 6 April 2025, Donald Trump told reporters aboard the presidential plane Air Force One that the EU would take advantage of the US: untrue. In 2024 alone, the EU imported almost $650 billion worth of goods from the US. Not exactly chump change. 
  • “They don’t take our agricultural products“. Also on that 6 April, POTUS accused us of not buying goods and commodities for agriculture: untrue, as the US government itself reports, in 2024, the European Union spent almost $13 billion (+1% compared to 2023) on agricultural commodities. We like American dried (nuts) fruit.
  • “They put up barriers that make it impossible to sell a car. It’s not a question of money. It’s that they make everything so difficult: the standards, the tests. They drop a bowling ball on the roof of your car from 20 feet up. And if there’s a small dent, they tell you: ‘Sorry, your car is not suitable‘. This is beautiful. Monday, 7 April 2025, bilateral with Israeli Prime Minister Benjamin Netanyahu: untrue, there is no similar safety check in Europe, and most importantly, nowhere does it say that minor damage can cause the car to fail the test. 
  • ‘The European Union was created to exploit the United States of America‘: false. On 10 April 2025, Donald Trump is the protagonist of a tirade so vague that it is difficult to refute. In any case, numerous scholars – especially historians and economists – have been taken aback by this statement. John O’Brennan, a leading professor of European Integration, European Union Politics, and International Relations, said that this statement ‘could not be more wrong or inaccurate‘. And like many others.

From China with fury

That Americans and Chinese do not get along well is well known. US President Donald Trump, since his inauguration, has stepped up his game with a trade war based on extreme tariffs that was later suspended. Let us examine some of his recent mental gymnastics:

  • “We had massive deficits with China. Biden let the situation get out of hand. These are $1.1 trillion deficits; ridiculous, and it is simply an unfair relationship. It is 23 January 2025, and we are at the annual meeting of the World Economic Forum in Davos when these words come from the speakers: false. The fact checkers indicate that in 202,3 indeed the US trade deficit as a whole will be around that figure. Donald Trump, however, forgets one crucial detail: the $1.1 trillion deficit concerns the whole world, not just China, and only considers goods without including services in the calculation. 
  • ‘We have a deficit with China of more than a trillion dollars. ‘ This was stated by The Donald in an interview on Fox News Radio on 21 February 2025: false. As reported by the B.E.A. (Bureau of Economic Analysis), in 202,4 the trade deficit was around $263 billion; in 2023 the figure was close to $252 billion. In short, it was wrong by about $730 billion.
  • China has never paid even 10 cents to any other American president. Liberation Day, Wednesday 2 April 2025. Donald Trump announces tariffs for the first time and finds time to fire another propaganda bullet. By this, POTUS meant that before him, the Chinese were free to trade with the US for free: untrue. In 1792, Alexander Hamilton, then US Secretary of the Treasury, proposed the Tariff Act – also known as the Hamilton Tariff – to incentivise the consumption of domestically produced goods. 

For Donald Trump, the grass is always greener on the other side

We close this review of rhetorical acrobatics with the United States’ neighbours: Canada and Mexico. These three great nations have always had very close trade relations, formalised by various agreements including NAFTA (North American Free Trade Agreement) and the USMCA (United States Mexico Canada Agreement). 

  • The US has a ‘200 billion deficit with Canada. He emphasised this several times on 7 January 2025 at a press conference at his home in Mar-a-Lago: false. Again, the B.E.A. data tell us that in 2024 the imbalance between imports and exports with Canada amounted to $35.7 billion.
  • Canada is “ONE OF THE NATIONS WITH THE HIGHEST DUTIES IN THE WORLD“. All caps because Donald Trump, on Truth, often writes in caps lock. On 11 March 202,5, he published this statement: false, as also reported by the World Bank, which puts Canada in 102nd position out of 137 countries for weighted average tariff on all products. This indicator reflects the average import tax, calculated by taking into account the weight of different products imported.
  • “Canada does not allow American banks to do business in Canada, but their banks invade the American market. Oh, that sounds about right, doesn’t it?” he wrote in Truth on 4 March 2025: untrue, Canada does not ban foreign banks, much less American ones. They have recently tightened regulations, but banking institutions like Bank of America, Citigroup, and Wells Fargo have been operating in Canada for more than a hundred years.
  • “We have a $200 billion trade deficit with Mexico“. The US President said this on 9 February 2025, during an interview for Fox News: untrue. Again, the B.E.A.’s 2024 figures show a trade deficit of around $180 billion, half of what Trump said.

In short, we have only analysed one tenth of the falsehoods that the 48th President of the United States of America has been able to invent during these first five months in office. Knowing the data is very important and allows you to speak with full knowledge of the facts and avoid embarrassing and momentous blunders. 

For this reason, join Young Platform and get informed so that you will have safe arguments with your friends during the Thursday afternoon aperitif!

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The 4% Rule: Early Retirement Explained

Early Retirement Explained

How to retire early? Many people desire early retirement, and the 4% rule can provide assistance, despite its drawbacks. Let’s explore what it entails.

Early retirement is a dream for many working individuals, as it allows them to enjoy their savings while they still have the energy to do so. However, with the retirement age increasing almost every year, this opportunity often arrives later in life. The 4 % rule is one approach that can help people achieve their goal of early retirement. In this article, we will examine the 4% rule, including its benefits and drawbacks.

Early retirement and the 4% rule: the origins 

The 4% rule originated in the United States, a country guided by the Latin proverb “homo faber fortunae suae,” which means “man is the author of his own destiny.” This mindset encourages citizens to rely on their own abilities rather than depending heavily on the government. As a result, Americans often gain familiarity with investments from a young age, driven by the belief that their future largely depends on their personal actions. This mentality has led to the development of various financial theories related to savings and retirement, including the popular 52-week challenge and the 4% rule that we will discuss today.

William Bengen, an aerospace engineer born in 1947 in Brooklyn, New York, is the inventor of this principle. He earned a master’s degree in financial planning in 1993. The following year, he published an article titled “Calculating Withdrawal Rates Using Historical Data” in the Journal of Financial Planning. In this article, Bengen analysed extensive historical data on the U.S. market and discovered that it is possible to sustain oneself on savings for up to 30 years. His method involves withdrawing 4% of one’s investment portfolio each year and adjusting this amount for inflation starting in the second year.

It’s essential to recognise that the American pension system differs significantly from European systems and is structured around three primary pillars: social security, private pension funds, and personal investments, including Individual Retirement Accounts (IRAs) and 401(k) plans. A key aspect that helps us understand Bengen’s strategy is that the 4% rule is based on the idea that pensions are “dynamic” rather than static. This means that when Americans save for retirement, they typically invest their money in a variety of assets, including stocks, bonds, exchange-traded funds (ETFs), and mutual funds. As a result, their pensions tend to grow over time. The 4% rule is designed conservatively, suggesting that this withdrawal rate would generally provide enough income to live comfortably for roughly 30 years. 

To illustrate this point more clearly, let’s examine a concrete example.

How does the 4% rule work?

To determine how much capital you need for retirement, start by calculating your average annual expenses. Once you have this figure, divide it by the %age you plan to withdraw annually, which is typically 4% (or 0.04). 

For example, if you anticipate needing 15,000€ per year for expenses (which breaks down to 1,250€ per month for 12 months), you would divide this amount by 4%: 

15,000€ ÷ 0.04 = 375,000€. 

This means you should aim to have 375,000€ in investments. According to Bengen’s perspective, this capital would be invested in the stock market and would generate an annual return.

Great! You can stop working and enjoy your free time. In the first year, you withdraw 4% of your initial amount, which is €15,000. From the second year onward, you will adjust your withdrawal amount to account for inflation, specifically increasing it by 2%. This means you would withdraw €15,300 in the second year, and continue to adjust this amount annually based on inflation. Meanwhile, the invested capital is expected to generate enough profit to cover these withdrawals, allowing the portfolio to remain sustainable even during years when the market does not perform as well as expected. However, there are some caveats to consider.

Bengen’s early retirement fails to grasp some critical issues

First of all, it’s important to recognise that this is a purely theoretical rule and may not accurately reflect real-life situations. While calculating average annual expenses can be helpful, it doesn’t account for unique circumstances, such as wanting to take a trip to El Salvador or managing unexpected costs like car repairs. In these instances, you may need to reevaluate the amount you plan to withdraw to cover these unforeseen expenses—unless you have a dedicated emergency fund set aside.

Additionally, it’s crucial to consider the costs and fees associated with managing your investments. The Total Expense Ratio (TER) encompasses all operational expenses of a fund, including those related to mutual funds or ETFs. These fees can significantly impact your net investment return. If you decide to work with a financial advisor, their fees will also be factored in. For example, a gross return of 7% could ultimately result in a net return of only 5.5% after deducting these costs. Keep in mind that every euro spent on commissions is a euro that isn’t working toward your future. If you’re interested in experiencing life in a country that has adopted Bitcoin as legal tender, consider planning a trip to El Salvador. You can also explore clubs offering discounts through WeRoad. Furthermore, join the Young Platform to stay updated on relevant guides and news!

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ECB April 2025 meeting: results

Réunion de la BCE

The ECB met on 17 April to decide on monetary policies for the Eurozone: what happened to interest rates? Here the results

The European Central Bank meeting on Wednesday, 17 April 2025, saw the twenty-six members of the Governing Council meet to discuss, among other things, monetary policies in the Eurozone. On the table were decisions on cutting interest rates, complicated by Donald Trump’s recent announcements on tariffs. What are the results?

ECB meeting: What is the economic context?

The ECB’s third meeting in 2025 was held against a particularly challenging economic backdrop, further complicated by Donald Trump’s recent tariff announcement and subsequent pause on those tariffs. Markets are experiencing significant turbulence, and economic uncertainty is prevailing across Europe. The main discussion topics included economic growth, which is adversely affected by the tariffs, and the deflationary pressure they could cause. Let’s take a closer look at what was decided.

ECB cuts interest rates

Wednesday, 17 April, Frankfurt. The Governing Council of the European Central Bank announced its monetary policy decision for the euro area. As expected by most analysts, the ECB cut its three key interest rates. Accordingly, the rate on the primary refinancing operations falls to 2.40%, the rate on the marginal lending facility to 2.65% and the rate on deposits at the central bank to 2.25%, effective from 23 April 2025.

The motivations behind the choice

The ECB explained that the decision was guided by the fact that the disinflation process is in line with expectations: inflation in the euro area is expected to be around the Governing Council’s medium-term target of 2% on a sustained basis. The Eurozone economy has shown resilience against the recent shocks in the global market, although the future outlook has worsened due to the trade war and tariffs. 

Future Perspectives:

Reducing interest rates is an expansionary economic policy aimed at fostering growth by lowering the cost of borrowing. This allows companies to borrow more easily, increasing production and overall wealth creation, which benefits the economy. When borrowing money becomes cheaper, the stock markets also tend to thrive, as low rates encourage the flow of capital. Companies can more easily access funds for financial transactions, acquisitions, and expansions, which increases their potential earnings and enhances the likelihood of rising share prices.

Investors often shift from more stable but less profitable securities like bonds to riskier financial assets offering higher potential returns. This second category includes stocks and their indices, as well as cryptocurrencies.

With this meeting, the ECB confirms the trajectory

In April 2025, the European Central Bank (ECB) decided to cut interest rates by 25 basis points. This move reflects progress in the fight against inflation, and the central bank remains cautiously optimistic, confirming its future plans. The next few weeks will be critical in determining whether the data supports this outlook and the ECB’s next steps. The following monetary policy meeting is scheduled for June 4, 2025.

Stay informed on essential updates with Young Platform!

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How do interest rates work? Why does the ECB raise them, and what are the implications?

Hausse des taux d’intérêt

What are the consequences of the European Central Bank (ECB) raising interest rates? It might seem like a technical adjustment, but the impact of this policy is significant, affecting everyone—from businesses to individual savers. So, what actually happens when the ECB makes this decision during its monetary policy meetings?

Here is the full calendar of the European Central Bank’s meetings for 2025.

What Are Interest Rates?

Before exploring the consequences of an ECB interest rate hike, it’s essential to clarify a few basic concepts. Generally speaking, interest rates are percentages that indicate the cost of borrowing money—that is, what you pay the bank when you take out a loan. At the same time, they determine how much your savings earn—essentially, the return on money deposited in a bank.

For example, if you borrow €10,000 at an interest rate of 3%, you’ll need to repay the original amount plus 3%, which comes to €300.

On the other hand, if you deposit €10,000 at a 3% interest rate, you’ll earn €300 per year.

ECB interest rates, however, are more like “fees” that the institution charges commercial banks in the Eurozone when it lends them money. These rates act as a benchmark for the rates that banks then offer to their customers.

ECB Interest Rates: The Different Types

The ECB sets three main types of interest rates:

  • Main refinancing operations rate: This is the rate applied to banks borrowing money from Frankfurt for a period of one week.
  • Marginal lending facility rate: This applies to overnight loans—those that must be repaid by the next working day.
  • Deposit facility rate: This is the rate paid on money that banks deposit overnight with the central bank.

These are three distinct but interrelated rates, and the European Central Bank usually adjusts them simultaneously, either raising or lowering them together. You can follow this section each month to stay updated on forecasts and outcomes from the ECB’s monetary policy meetings.

Why Does the ECB Raise Interest Rates?

For the European Central Bank, interest rates are a key tool of monetary policy used to fulfil its main objective: maintaining price stability.

This stability is most commonly threatened by inflation, which drives prices up significantly. When inflation is high, the purchasing power of individuals falls—in other words, people can buy less with the same amount of money compared to periods of lower inflation.

To help restore purchasing power, the ECB resorts to raising interest rates. But how exactly are these two elements connected, and what are the consequences of such a monetary policy decision?

ECB Interest Rate Hikes: What Are the Consequences?

More Expensive Loans and Reduced Spending

One of the first consequences of a rise in interest rates is that borrowing becomes more expensive. As a result, people are encouraged to save rather than spend, and the amount of money in circulation decreases—since borrowing and investing money becomes less attractive.

Higher Returns for Savers

When the ECB raises interest rates, it becomes more expensive for banks to access funding. Consequently, it’s less favourable for customers to take out loans. Mortgages become less affordable, and it becomes harder for businesses to secure financing. However, savers benefit from higher returns on their deposits.

Currency Appreciation

Higher interest rates can attract foreign investment, strengthening the euro. This can make imports cheaper and contribute further to reducing inflation.

These are the most immediate effects of an ECB interest rate hike. However, the decision is part of a broader monetary strategy. Raising rates also helps to lower inflation expectations, which can ease pressure on wage demands—as workers are less likely to push for higher salaries. The European Central Bank also aims to avoid a wage-price spiral and protect the labour market.

Current Situation: 2025

Following a period of interest rate hikes aimed at curbing inflation, the ECB began cutting rates in 2025. On 17 April 2025, the Bank reduced interest rates by 25 basis points, bringing the deposit rate down to 2.25%, the main refinancing rate to 2.40%, and the marginal lending rate to 2.65%.

This decision was made against a backdrop of falling inflation and sluggish economic growth, with the goal of stimulating the Eurozone economy.

Impact on Mortgages

The rate cuts have had a positive effect on mortgages:

  • Variable-rate mortgages: Monthly payments have decreased; for instance, a typical 25-year mortgage of €126,000 has seen repayments fall by around €17.
  • Fixed-rate mortgages: These have become more attractive, with rates currently ranging between 2.19% and 3.85%.

Banks are adjusting their offers in line with the ECB’s policy shift, making this a favourable time for anyone looking to take out a mortgage.

The ECB’s next monetary policy meeting is scheduled for 5 June 2025, during which further rate cuts may be considered, depending on inflation trends and economic performance.

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MiCA: Our Journey Towards Full Regulatory Compliance

With the entry into force of Regulation (EU) 2023/1114 on Markets in Crypto-Assets (MiCA), the European Union has introduced a harmonised regulatory framework that will govern the issuance, public offering, and admission to trading of crypto-assets, as well as related services. This marks a significant step forward for the entire sector, aimed at ensuring greater transparency, consumer protection, and market stability.

We are fully committed to aligning ourselves responsibly and diligently with this new regulatory framework. This article aims to inform our users about the steps we have taken in compliance with Article 45, paragraph 5, of Legislative Decree No. 129/2024—the legislative decree aligning national regulations with the MiCA Regulation—while also reassuring them of the continuity of our services and the absence of any immediate changes to their experience.

What Article 45, Paragraph 5 of Legislative Decree 129/2024 Provides

Article 45, paragraph 1 of Legislative Decree No. 129/2024 establishes a transitional regime for entities already operating legally within the European Union before the Regulation comes into force, namely 30 December 2024.

In practical terms, this provision allows entities already active in the sector to continue providing their services without interruption until 30 June 2026, even if they have not yet obtained the new authorisation required by MiCA, provided that they submit their application for authorisation by 30 December 2026.

This rule aims to ensure a smooth transition to the new regime, thereby avoiding sudden disruptions for operators and inconvenience for end-users.

Our Commitment to Compliance

In compliance with the MiCA Regulation and Article 45, paragraph 5, of Legislative Decree No. 129/2024, we hereby announce our intention to fully align with the new European regulatory framework, particularly with the MiCA Regulation.

We have already initiated all the necessary activities to prepare our application for authorisation, which we will shortly submit to the competent Authority. This process includes adapting our internal procedures, organisational requirements, and risk management policies to the new regulatory framework.

Our legal and compliance teams are working diligently to ensure we meet all MiCA requirements, allowing us to operate lawfully and continue providing our clients with secure, reliable, and transparent services.

Initiating the Authorisation Process

We can confirm that the Company is working to submit the application for authorisation in accordance with the requirements set out by MiCA.

We will forward the necessary documentation to the competent authority in the coming weeks. This marks a crucial step in our compliance journey and reflects our dedication to operating in complete regulatory alignment, not only out of obligation but as a commitment to our users.

We would like to clarify that, pending the issuance of the authorisation, the activities carried out concerning clients will continue to be governed by the applicable legislation for providers of services related to the use of virtual currencies and digital wallet services, and are not yet subject to the provisions of the MiCA Regulation.

Service Continuity for Our Clients

We wish to reassure all our users that our services will remain fully operational throughout the entire transitional period provided for in Article 45.

There will be no disruptions to the services you are accustomed to or unilateral changes to existing contractual terms. Operational continuity is our top priority, and we will continue to uphold the quality, reliability, and security that define our service.

No Immediate Impact on User Experience

As of today, and until further notice, no substantial changes are expected in how you interact with our platform. The features, services, and terms of use will remain unchanged.

This means you can continue using our tools as usual, without taking any specific action. Any future changes will be communicated in advance and with complete transparency.

Our Commitment to Transparency and Ongoing Updates

We believe in maintaining open and transparent communication with you. That’s why we are committed to regularly informing you about the progress of our authorisation process and any regulatory developments that may affect our services.

Should any significant updates arise, you will be the first to know via our official communication channels. Our customer support team is always here to help if you have any questions or concerns.