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Fed: Who wants to be the new president?

Fed: Who wants to be the new president?

The Fed changes face: in May, Chairman Jerome Powell will end his second term, and Donald Trump will have to choose his successor. Who will it be?

After eight years, the Fed, the US central bank, will be led by a new chair: Jerome Powell, who currently holds the top job, will have to make way for a new figure. It will be up to the US President to choose his successor. Let’s take a look at the most likely candidates.  

The Fed prepares for a new Chairman.n

In May 2026, the Fed will undergo a significant structural change: the current Chairman, Jerome Powell, will step down after eight years and be replaced. The person who will head the US central bank will be chosen directly by Donald Trump: after the nomination, however, the Fed Chairman candidate will also have to be approved by the US Senate. 

As we shall see, Treasury Secretary Scott Bessent has released a list of five names, at least three of whom are potentially very close to being nominated. The only spoiler we can give is that Jerome Powell is not on Bessent’s list. Why? For at least two reasons. 

No chance for Jerome Powell: dura lex, sed lex

The first is legal in nature: although the law in force in the US – the Federal Reserve Act – does not set a term limit for the Fed Chair, Powell will leave the central bank due to a rather curious coincidence of events. 

Jerome Powell took office as Governor in May 2012 to complete Frederic Mishkin’s unexpired term – much like the very Trumpian Stephen Miran, who was appointed Governor last July following the resignation of Governor Adriana Kugler.

Two years later, in June 2014, Powell was officially appointed Governor for a full 14-year term, expiring on 31 January 2028. In 2018, Donald Trump, during his first term, promoted Powell to the role of Chair (i.e., President) of the Federal Reserve. Four years later, at the legal end of his term, he was confirmed by Joe Biden, who was President of the United States at the time. This brings us to the present day: in 2026, it will be four years since Biden’s confirmation and, as a result, the word ‘End’ will appear. 

But then, if the law does not set a maximum term limit for the Fed Chair, why can’t Jerome Powell be re-elected to that role? Because the Federal Reserve Act has a fundamental rule: the Fed Chair must also be a member of the Board of Governors, i.e. the central bank’s governors. 

This rule cannot be applied in Powell’s case: even if he were re-elected to the top position at the Fed until 2030, his status as Governor would lapse in 2028, as he would have reached 14 years of service since 2014. At that point, he would automatically be removed from the Chair role.  

The Trump administration’s dislike of Powell is well known

Even if this rule did not exist, the situation would not change: the chances of Powell being included in Bessent’s list would be close to zero. And here we come to the second reason, which is more ‘relational’ in nature: Trump and company do not like the current Chair, to put it mildly. 

As we have reported on several occasions, the President of the United States has often used harsh tones towards Jerome Powell, especially during the summer FOMC meetings, when the much-coveted rate cut was slow in coming. Because of this ‘slowness’, Donald Trump began to nickname him Jerome ‘Too Late’ Powell and threatened to fire him on several occasions. 

With Powell now out of the running, let’s take a look at the names chosen by the US Treasury Secretary.

The most likely candidates

On Sunday, 26 October, while travelling on Air Force One to Tokyo, Scott Bessent told reporters that he had narrowed down the number of candidates to five following the first round of interviews, which is expected to be followed by a second round. 

The list includes Trump adviser Kevin Hassett, former Fed Governor Kevin Warsh, current Fed Governor Christopher Waller, Fed Vice Chair Michelle Bowman, and BlackRock executive Rick Rieder. Let’s take a look at them one by one.

Kevin Hassett

He is a loyal supporter of Donald Trump: he served alongside the US President during his first term as Chair of the Council of Economic Advisors and still holds a position in the administration as Director of the National Economic Council. In addition, between the two terms, he worked for the investment fund of Jared Kushner, Trump’s son-in-law. 

Given this background, it would be reasonable to assume that Hassett could be Trump’s first choice, as he is a politician who places great importance on loyalty. However, there are a couple of strategic considerations. 

Firstly, the markets’ reaction to his appointment could be particularly harmful, as a Fed led by Hassett would be perceived as firmly subordinate to the will of the POTUS (President of the United States). 

Secondly, if the Federal Reserve were to make decisions that Trump did not like, with equally unwelcome macroeconomic consequences, the latter would find it much more difficult to blame one of his loyalists: the rhetoric he is using against Powell would have less effect. 

Kevin Warsh

A former Fed governor, he was a member of the Board of Governors during the 2008 financial crisis, before resigning in 2011 following the US central bank’s shift towards quantitative easing (QE) – i.e. a more expansionary monetary policy. He has been an executive director and vice president at Morgan Stanley and is currently a visiting fellow at Stanford University.

His impressive CV rightly makes him a potential successor to Powell. Added to this are his connections with the American conservative establishment: like Hassett, he also worked for the White House as an economic adviser to George W. Bush (also known as Bush Jr.), who later appointed him Governor of the Fed. Furthermore, the family of his wife, billionaire Jane Lauder, granddaughter of Estée Lauder, founder of the cosmetics company of the same name, with a market cap of £32 billion, is on excellent terms with the Trump family. 

However, here too, there are a couple of strategic considerations, starting with his views on monetary policy. Warsh is considered a ‘hawk‘ because, according to reports, he is fixated on controlling inflation, which was the main reason for his resignation as Governor in 2011. A Fed led by Warsh would therefore be more inclined to implement a more restrictive, or at least less expansionary, economic policy. 

In short, a very different attitude from that of the POTUS, who has been imploring Powell to cut rates for months. 

Christopher Waller 

Currently serving as Governor of the Fed, appointed by Trump in 2020, Waller has spent his life between university classrooms and the corridors of the US central bank. 

He has taught as a professor at various universities in the United States – Indiana, Washington and Kentucky – and in Germany – Bonn University. In 2009, he joined the Fed’s St. Louis office as Vice President and Research Director, where he helped create FRED (Federal Reserve Economic Data), a massive free database of economic and financial data managed by the Fed. 

Waller is a crypto-enthusiast and views the cryptocurrency sector in a positive light: on 21 October, at the Fed in Washington, he chaired the Payments Innovations Conference, a meeting which, in his own words, aimed to “bring together ideas on how to improve the security and efficiency of payments, listening to those who are shaping the future of payment systems“. The conference was attended by, among others, Sergey Nazarov, Co-Founder & CEO of Chainlink; Heath Tarbert, President of Circle; and Cathie Wood, CEO of Ark Invest. 

There is one problem with all this: Christopher Waller’s long experience within the Federal Reserve circles. The future Chair chosen by Donald Trump will also have to be a new figure, capable of reforming the Fed’s structure and making it less decisive in terms of economic management. Waller, on the contrary, may have internalised the very dynamics that Trump intends to dismantle, thus making him unsuitable for the role. 

Michelle Bowman

Michelle ‘Miki’ Bowman is the first of the two outsiders, i.e., those with a background different from the three candidates just examined. However, like Waller, Bowman is also a sitting governor appointed by Trump in 2018. Trump himself promoted her to Vice Chair of the Fed in January 2025, a role that places her just one step below Jerome Powell.

Why is she an outsider? Because, while Hassett, Warsh and Waller have a purely economic or high-finance background, Bowman has a degree in Advertising and Journalism and a master’s degree in Law. 

Before moving on to the last candidate, a note about Michelle Bowman: she is known for being someone who fights tenaciously to advance her agenda and achieve her goals, despite political pressure. For example, she has repeatedly expressed dissent towards many of the Biden administration’s measures. In September 2024, hers was the first dissenting vote by a Fed governor after two decades of unanimous voting on monetary policy. She is a strong-willed woman who would undoubtedly appeal to The Donald.  

Rick Rieder

Rieder is an outsider not so much because of his academic background, but because he is not a member of the Fed’s Board of Governors. He is, in fact, a senior manager at BlackRock with a deep understanding of the bond market, which is his speciality. 

Rieder is therefore not entirely unfamiliar with the workings of the central bank and the political subplots in Washington. Still, he is very familiar with high finance and the bureaucracy that surrounds it. In this sense, he could be considered the antithesis of Waller. 

Finally, Rieder is known for his gruelling work schedule: he is said to get out of bed every day at 3:30 a.m. to get a few hours’ head start on his competitors.     

What are the odds for each of the candidates?

Well, we have examined Jerome Powell’s potential successors; now it’s time to take a look at the bookmakers, namely Polymarket. 

At the time of writing, the odds for each name are: 

  • Kevin Warsh: 15%
  • Kevin Hassett: 15%
  • Chris Waller: 14%
  • Scott Bessent: 5%
  • Rick Rieder: not even listed
  • No announcement before December: 53%

Why is Scott Bessent even on the list? Because Donald Trump, on his trip to Tokyo at the end of October, told reporters that he was considering him as Fed Chair, but that Bessent himself would refuse because ‘he likes working at the Treasury‘. A few minutes later, he backtracked, saying, ‘We’re not actually considering him. ‘ 

So, who will win the race for Fed chair? Or, to quote the article’s headline: who wants to be the new chair?

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Fed rates: Will the next FOMC meeting scare the markets?

Fed rates: Is the next FOMC meeting scaring the markets?

Rates, Fed undecided on next moves: the outcome of the December FOMC meeting is less predictable than those in September and October. What do analysts predict? 

Fed rates have a significant impact on financial markets: investors, aware of the importance of interest rates, try to anticipate the decisions of the FOMC (Federal Open Market Committee) to position themselves in the best possible way. Compared to the last two meetings, where the outcomes were practically a foregone conclusion, the December meeting presents numerous unknowns: what is the most likely outcome?  

What happened at the last FOMC meeting?

On 28-29 October, the Fed met at its headquarters in Washington to discuss the macroeconomic situation and decide what to do about interest rates: the Council, with ten votes in favour out of twelve, opted for a 25 basis point cut, lowering rates by 0.25% to a range between 3.75% and 4%. 

The outcome, as we anticipated, was widely expected and already discounted by the markets, which had been growing for weeks – except for the halt on 10 October, when Trump announced 100% tariffs on China.

But it was the press conference following the meeting that was the real key moment. Here, Federal Reserve Chairman Jerome Powell, in listing the reasons behind the cut, made a very significant statement: “A further cut in benchmark interest rates at the December meeting is not a foregone conclusion, quite the contrary.” Markets in chaos.

Since Powell uttered those words until now – that is, at the time of writing – the major stock indices have entered a phase of severe difficulty, but then they rebounded and are now flat.

The crypto market has also taken a hit, of course, with Bitcoin down 16.8 percentage points since 29 October and Ethereum down almost 20,6. Overall, since that fateful day, the total market cap has fallen by £600 billion, from £3.7 trillion to £3.11 trillion.

Fed, shutdown and block on the publication of macroeconomic data 

During that press conference, Powell responded to questions from journalists about the shutdown’s impact on federal activities. In particular, curiosity focused on the stance the Fed might take at the next FOMC meeting, in a context of almost total absence of data crucial for analysing the macroeconomic scenario.  

Powell himself had already mentioned the difficulties of the moment, stating that “although some important data has been delayed due to the shutdown, the public and private sector data that remains available suggests that the outlook for employment and inflation has not changed much since our September meeting“. 

On this issue, however, the most interesting response came from the Fed Chairman to Howard Schneider of the well-known Reuters news agency. The journalist rightly asked him whether the lack of key information, such as inflation or employment, could have led members of the US central bank to “make monetary policy based on anecdotes”, i.e. qualitative data – such as personal opinions – rather than economic models based on quantitative data. 

Powell initially stated that ‘this is a temporary situation’ and that ‘we will do our job‘. He then went on to say, ‘If you ask me whether it will affect the December meeting, I’m not saying it will, but yes, you can imagine… what do you do when you’re driving in fog? You slow down.

In short, the latest FOMC press conference presented us with a Jerome Powell who appeared even more cautious than the classic “we’ll wait and see” approach that characterised the first six months of 2025. A determined Jerome Powell, who wants to see his task through to the end, even though he will leave the top job in May 2026 to make way for the new Fed Chair.

Fed rates: what do analysts and prediction markets forecast?

Here too, the question is entirely open. The most authoritative voices are divided into two camps: a 25-basis-point cut versus no change (rates unchanged). There is, of course, no mention of a 50 basis point cut. 

The first faction, in favour of a quarter-point cut, is leveraging the weakness of the labour market, particularly the slowdown in hiring: in a Reuters poll of 105 economists, 84 bet on a quarter-point cut, while the remaining 21 chose the No Change option. 

In particular, Abigail Watt, an economist at UBS, justified her vote to Reuters by stating that ‘the general feeling is that the labour market still appears relatively weak, and this is one of the key reasons why we believe the FOMC will cut in December‘. Watt goes on to say that she would change her opinion if data were released that ‘contradicted this sense of weakness‘. 

The second faction, those in favour of unchanged rates, instead takes as its main argument Powell’s words quoted above: “the outlook for employment and inflation has not changed much since our September meeting“. 

For example, Susan Collins, head of the Boston Fed, is of this opinion and believes that a third consecutive cut could fuel inflation at a time when the impact of Trump’s tariffs remains unclear. Specifically, she told CNBC that “it will probably be appropriate to keep interest rates at their current level for some time to balance the risks to inflation and employment in this environment of high uncertainty“. 

Interest rates, according to the FedWatch Tool and Polymarket

FedWatch is a financial tool provided by the CME (Chicago Mercantile Exchange) that calculates the implied probabilities of future Federal Reserve interest rate decisions. Why ‘implied’? Because it deduces probabilities from the market prices of 30-day Federal Funds futures rather than from explicit opinions. 

In simple terms, FedWatch reports market expectations by looking at investors’ portfolios. If it says ‘80% probability of a cut’, it means that 80% of the money invested in the market today is betting on a cut. Currently, according to this tool, a 25 basis point cut is 89,6% likely, while No Change is 10,4%.

According to the most famous prediction market of the moment, Polymarket, the result is a 25 basis point cut at 97%, No Change at 3%, a 50 basis point cut at 1% and a 25 basis point increase at around 1% – if you are interested in knowing how it works, we have written an Academy article dedicated to Polymarket. 

What will the Federal Reserve do? 

As we have explained so far, the Fed will have to take a large number of variables into account before its Chairman leaves the room, approaches the microphone and utters the familiar ‘Good afternoon‘.

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Berachain: a new era for DeFi?

Berachain: Is this the future of DeFi?

Berachain is a blockchain implementing a consensus mechanism that could well revolutionise the world of DeFi: the Proof-of-Liquidity (PoL).

What’s all the fuss about?

Berachain is a Layer 1 blockchain that has garnered significant attention from many investors, both institutional and retail. This is primarily thanks to the consensus mechanism it’s built upon—the network’s own invention, Proof-of-Liquidity.

The fundamental idea, simplified to its bare bones, is to transform liquidity from a passive resource into an active engine for network security, thereby re-aligning security with the interests of the end-users.

What’s more, Berachain distinguishes itself through its extreme flexibility, being perfectly capable of hosting decentralised applications (dApps) developed initially on Ethereum.

Berachain: proof-of-liquidity and EVM identical

To embark on our journey to understand the Proof-of-Liquidity (PoL) consensus mechanism, we can start by defining it as an evolution of the more widely known Proof-of-Stake (PoS).

In a network utilising PoS, the security and integrity of the chain are upheld by validators, or nodes. They lock up tokens—or stake them—and in return, receive rewards when they successfully validate blocks. These rewards act as a powerful incentive for staking, fostering a virtuous cycle that secures the network.

However, this mechanism has a slight “flaw”: it isolates the validators—and their economic clout—from the broader ecosystem, meaning the Dapps and the users.

To simplify, we could (with a poetic licence) compare a PoS blockchain to a coal-powered train: just as validators secure the network by staking their tokens, the engineers ensure the train’s movement by shovelling coal into the furnace. However, the energy released “only” serves to make the train run.

The Proof-of-Liquidity consensus mechanism, by contrast, lays the groundwork for a system where the energy generated from the burning coal not only moves the train but simultaneously lights up the carriages, heats the water in the bathrooms, operates the window mechanisms, and so forth. It’s a game-changer.

How is this achieved? Through a two-token model that involves validators, dApps, and the community:

The latter has a particular feature: it is soulbound—similar to items in World of Warcraft—and cannot be bought, sold, or traded.

The virtuous cycle of PoL

  1. On one side, validators stake $BERA to ensure the chain’s security and receive $BGT in return.
  2. On the other side, users, via dApps like DEXs (Decentralised Exchanges), provide liquidity to pools and in exchange earn LP-tokens (Liquidity Provider Tokens). These “receipt tokens” certify the action and allow for the future redemption of the liquidity.
  3. These LP-tokens have a utility: they can be staked in Reward Vaults—smart contracts that then reward the user with $BGT for staking.
  4. Where do these $BGT tokens originate? They come from the validators. Validators receive them as a reward for staking $BERA and, thanks to PoL, are obliged to distribute the lion’s share to users who staked their LP tokens in the reward vaults.
  5. Validators are also motivated to direct $BGT to the Reward Vaults by the dApps themselves. This is done through a market of incentives (other tokens, stablecoins, etc.) offered by the protocols to increase the portion of $BGT for their end-users (liquidity providers).
  6. Users then delegate the $BGT tokens they obtained from locking LP-tokens in the Reward Vaults to validators, effectively “boosting” them. In return, users receive a share of the aforementioned incentives. A validator is ‘boosted’ when it receives more $BGT from users, increasing the amount of $BGT that can be directed to the Reward Vaults.

The circle is complete: validators, dApps, and users all collaborate in a self-sustaining ecosystem that rewards every component for its work. Though $BGT generates implicit value, it can always be exchanged for $BERA at a 1:1 ratio—jolly good stuff.

EVM identical

EVM stands for the Ethereum Virtual Machine. If we were to compare Ethereum to a global supercomputer, the EVM would be its operating system—the decentralised technological architecture necessary for executing smart contracts and transactions.

With its EVM Identical design, Berachain has reproduced an exact copy of the EVM on its own chain. This means Berachain is a blockchain that is 100% compatible with Ethereum’s EVM. The consequences are pretty obvious: the enormous number of developers working on Ethereum could easily “move” to Berachain without noticing any difference whatsoever.

The strategy is certainly intriguing: Berachain develops a potentially revolutionary consensus mechanism and says to programmers across the globe, “Look here, you code on Ethereum, but you’re curious about our PoL? No bother, we’ve created an execution environment that is totally identical to what you’re accustomed to, and it updates in sync with Ethereum“. In fact, by March 2025, just one month after its launch, Berachain had already amassed nearly $3 billion in Total Value Locked (TVL).

Berachain: team and funding

Not much is known about the team, as its members have opted to remain anonymous. The three co-founders have always presented themselves to the public under the pseudonyms Smokey the Bear, Homme the Bear, and Papa Bear.

This public anonymity, however, stands in stark contrast to the solid trust the project has earned in the institutional world. This is evidenced by the $100 million raised in a Series B funding round in April 2024.

Some of the world’s most prominent investment funds, which are also active in traditional finance, participated in this fundraising. The most noteworthy names include Brevan Howard Digital, the crypto arm of a behemoth with over $20 billion in assets under management. They were joined by Web3-specialised Venture Capital firms such as Framework Ventures, whose portfolio boasts projects like Aave (AAVE) and Chainlink (LINK), and Polychain Capital.

A dash of Italy in Berachain

We’ll conclude by sharing a piece of information that makes us rather proud: there’s a good bit of Italy in Berachain! Its European headquarters are in Milan, with a team that collaborates on research and development operations.

Perhaps this is what facilitated the recent partnership with Napoli—yes, the SSC Napoli coached by Antonio Conte. The collaboration isn’t directly with Berachain, but with KDA3, a platform that “develops innovative digital sports solutions”. KDA3 is built on Berachain, which invested directly in the platform in 2025. Furthermore, KDA3 is also in partnership with the Canadian Basketball Federation and will be launching other partnerships with international clubs in the coming months.

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Mercosur: The EU Gives the Green Light to the Agreement

Mercosur agreement: a new era for global trade?

After 25 years of negotiations, Mercosur and the European Union are closer than ever to finalising a strategic partnership. So, what does this actually mean?

Mercosur and the European Union may be on the verge of signing a trade agreement that the European Commission itself has called “the biggest free trade deal ever signed”. The EU-Mercosur agreement involves countries that account for approximately $20 trillion in GDP and 700 million consumers.

What Exactly Is Mercosur?

The Mercosur—or Mercado Común del Sur (Common Market of the South)—is an organisation established in 1991 by the Treaty of Asunción. Its purpose is to “promote a common space that generates business and investment opportunities through the competitive integration of national economies into the international market”. The full members are Brazil, Argentina, Paraguay, and Uruguay. Venezuela was also a full member but was suspended in 2016 due to anti-democratic practices. Bolivia is currently in the process of joining as the fifth full member.

Additionally, there are several associate members, who enjoy privileged status but are not part of the main bloc. These include Chile, Colombia, Ecuador, and Peru.

Mercosur is a common market with the goal of increasing the exchange of goods and services, as well as the free movement of people. This applies both regionally among South American countries and internationally through agreements with other blocs, such as the one with the European Union. To achieve this, member countries are working to mutually reduce customs barriers, thereby promoting economic integration.

In 2023, the Mercosur bloc generated $447 billion in exports and $357 billion in imports, which is equivalent to 10.9% of international trade. These figures include both internal trade among members and external trade with other countries.

What Does the EU-Mercosur Agreement Entail?

Negotiations between the EU and Mercosur have been ongoing for approximately 25 years, marked by periods of tension and détente. A breakthrough finally occurred on 6 December 2024 in Montevideo, Uruguay, when EU leaders reached an understanding with the South American bloc countries. This past Wednesday, the European Commission presented the treaties that will define the commercial agreement, representing another significant step towards its officialisation.

The agreement is a result of a shared desire to remove trade barriers, ensure a responsible and eco-friendly supply of raw materials—with a particular focus on addressing Amazon deforestation—and send a clear message in favour of regulated international trade and against all forms of protectionism.

Specifically, the agreement is based on a principle of reciprocity. European industries, primarily those in automotives, machinery, and spirits, will gain greater access to the Mercosur market. In return, Mercosur will be able to more easily export its agri-food products to Europe, including meat, sugar, coffee, and soy.

This latter point, in particular, has caused some concern among agri-food companies in France, Poland, and, to a certain extent, Italy. The primary fear is related to unfair competition. South American countries have less restrictive environmental and food regulations than the EU, allowing the use of antibiotics, pesticides, and hormones that are banned in Europe.

In any case, the agreement provides for a gradual easing of customs tariffs on 90% of goods traded between the two blocs. It also establishes preferential channels for both European and South American companies, giving them greater access to public tenders and investment opportunities.

According to the European Commission, the final result will be a 39% increase in EU exports to Mercosur and an estimated 440,000 new jobs created across Europe.

The Road Ahead

As anticipated, the EU-Mercosur agreement is not yet official. However, it represents a crucial phase in bringing the two blocs closer, especially as they seek protection from costly Trump-era tariffs.

This is an interim trade agreement, meaning it is provisional. As such, it does not require the approval of all 27 member states, but rather only the ratification of the qualified majority of the EU Council. This means at least 15 out of 27 countries (55%) that represent at least 65% of the population must vote in favour.

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Russia-Ukraine war: updates

Russia–Ukraine war: any updates?

It was a busy weekend for Donald Trump, who met with Putin, Zelensky, European leaders, and NATO representatives. What happened – and how did markets react?

It was an eventful and politically charged weekend: over the course of four days, a bold and unpredictable Donald Trump hosted Russian President Vladimir Putin, Ukrainian President Volodymyr Zelensky, six European heads of state, including Giorgia Meloni, and NATO Secretary General Mark Rutte in the United States. The aim? To seek a potential solution to a war that has now entered its fourth year, following Russia’s invasion of Ukraine.
Here’s a brief recap of what took place – and a final look at how the markets responded.

Trump and Putin: meeting in Alaska – 15 August

On 15 August, at a US military base near Anchorage, Alaska, US President Donald Trump met face-to-face with Russian President Vladimir Putin to discuss the ongoing war in Ukraine. The lead-up to the meeting attracted global attention, mainly due to Trump’s surprisingly warm demeanour towards Putin: red carpets, handshakes, pats on the back, and broad smiles.

But one detail, in particular, made headlines: the US President spontaneously offered his Russian counterpart a ride in the iconic, armoured presidential limousine – known as “The Beast” – away from cameras and microphones. What was said during that ten-minute ride remains unknown. What is certain, however, is that the two men were seen laughing and chatting amicably, like old friends.

As for the press conference that followed – the quotation marks are deliberate – very little of substance was shared. The two leaders answered virtually no questions, instead offering vague and formulaic statements.

Putin opened with praise for the atmosphere of “mutual respect”, going so far as to remind attendees that Alaska was once a Russian territory. He then shifted to the main topic: the war in Ukraine. Once again, the Russian leader insisted that peace talks could only begin if certain preconditions were met – namely, international recognition of Russia’s claims over disputed regions, Ukraine’s demilitarisation and neutrality, a ban on foreign military presence, and new Ukrainian elections.

Then it was Trump’s turn. Notably restrained, the US President – usually known for his long-winded statements – kept things brief. “There were many points on which we agreed”, “great progress”, and “an extremely productive meeting” were among the few phrases he offered. In essence, a lot of diplomatic smoke and mirrors, followed by the admission that no concrete agreement had been reached – but that “we have a very good chance of getting there”.

Trump, Zelensky, Europe and NATO meet in Washington, D.C.

Between Sunday and Monday, Donald Trump held talks with Ukrainian President Volodymyr Zelensky, before extending invitations to six European leaders – France’s Macron, Germany’s Mertz, Italy’s Meloni, Britain’s Starmer, Finland’s Stubb, and EU Commission President Ursula von der Leyen – as well as NATO Secretary General Mark Rutte.

The main topic on the agenda was clear: the security and territorial integrity of Ukraine. For months, Zelensky, alongside European and NATO officials, has been urging President Trump to provide firm guarantees that any peace deal must respect Ukraine’s sovereignty, and that future agreements must act as a deterrent against further Russian aggression. The proposal? To allow Kyiv to build a modern, specialised and well-equipped army that would discourage any future invasions.

The problem? As we saw earlier, Vladimir Putin is wholly opposed to this and has made very different demands.

What’s Next?

It’s difficult to predict, given Putin’s elusive nature and Trump’s unpredictability. That said, on August 19, Trump confirmed that Putin had agreed to a direct meeting with Zelensky, which would be followed by a trilateral summit involving the US, Russia, and Ukraine.

In a post on his Truth Social account, Trump wrote:
“At the end of the meetings, I called President Putin and began organising a meeting, at a location to be determined, between President Putin and President Zelensky. After this meeting takes place, we will have a trilateral meeting, which will include the two presidents and Mme”

UK Prime Minister Keir Starmer and German Chancellor Mertz also confirmed this announcement.

How did the markets react? 

The reaction from traditional financial markets was largely positive. The three major US indices – the Nasdaq, Dow Jones, and S&P 500 – initially rallied on news of the Trump–Putin summit in Alaska, before easing back slightly. Analysts suggest investors were hoping for more concrete results, rather than vague diplomatic gestures.

A similar trend was observed across European markets, particularly in Paris, Frankfurt, and London, which have all been performing strongly since early August.

The crypto market, however, told a slightly different story.

Between August 13 and 14, Bitcoin surged to a new all-time high of $124,000, before pulling back to around $115,600 after again failing to break through the resistance zone between $121,000 and $123,000.

Ethereum also came close to surpassing its own all-time high, missing it by just $100. It’s currently trading at around £4,300, with a renewed breakout attempt looking likely – especially now that the previous resistance at £4,100 seems to have become support.

As for the Total Market Cap, since the announcement on Thursday, 7 August, it has risen from $3.7 trillion to approximately $3.85 trillion – a gain of around 3.8% (roughly $150 billion).

Lastly, Bitcoin dominance continues to slide. Over the past 12 days, BTC’s market share has decreased by more than three percentage points, currently standing at 59.7% at the time of writing.

Is there a glimmer of hope?

So, can Donald Trump really bring Vladimir Putin and Volodymyr Zelensky to the same negotiating table? Are we genuinely moving towards peace, or is this just political theatre?

And what role will Europe play in the outcome?

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How the Stock Exchange works, explained simply

How does the stock market work?

NYSE, Nasdaq, LSE – what do these names mean? They refer to some of the world’s leading stock exchanges. But what exactly is a stock exchange, and how does it work?

The stock exchange, more commonly known as the stock market, is a financial marketplace where shares, bonds, and other securities are bought and sold. Once considered the domain of financial insiders, the stock market has now entered popular culture, thanks in part to numerous cult films that have graced cinema screens since the 1970s.

But what is the history of the stock exchange? What are its key components? And who are the leading players involved? Let’s take a closer look.

How and when was the stock exchange created?

The earliest recorded evidence of trading, lending, and deposit activities dates back to the second millennium BC, inscribed in the Babylonian Code of Hammurabi. Similar financial practices were also found among the ancient Greeks, Etruscans, and Romans.

However, these early forms of financial exchange cannot truly be considered a ‘stock market’ as we understand it today. The first genuine stock exchange was established in Amsterdam, in the Netherlands, around the 17th century.

The Middle Ages

In the late Middle Ages, the world of finance began to take on a more structured form with the emergence of the first banking institutions. Italy – particularly the cities of Genoa, Venice, and Siena – was, for many years, the central financial hub of Europe.

Around the 14th century, a new trading centre emerged that attracted merchants from across the continent, helping to shape a financial system that was still quite rudimentary. This was in Bruges, Belgium, specifically in the Ter Buerse Palace, built by the aristocratic Van der Bourse family. It was here, where merchants gathered to exchange goods and currencies, that the name ‘Borsa’ (stock exchange) originated.

Later, essential exchanges were established in Antwerp, Lyon, and Frankfurt, marking a shift from private to public management, with increasingly clear and stricter regulations.

The Modern Age

In the 17th century, the Amsterdam Stock Exchange became the most important in Europe – and likely in the world. This period also saw the creation of the first joint-stock companies, which significantly boosted the trading of securities, including government bonds and commodities.

The 18th century witnessed the rise of international trade, as well as the emergence of speculative bubbles. The most famous was the South Sea Bubble in England (1710–1720), when share prices soared before collapsing, causing heavy losses. It led to the Bubble Act, a law aimed at curbing speculation by limiting the formation of new companies.

Meanwhile, in New York, a group of merchants began meeting under a plane tree on Wall Street to trade securities – a humble beginning for what would become a future global financial centre.

The Industrial Revolution and the modern stock market

During this period, the stock market became crucial not only for company growth but also for the economic development of entire nations. London and Paris became key financial markets, funding industrial projects, infrastructure, and even colonial and military ventures.

In 1817, the New York Stock Exchange (NYSE) was officially established. Over time, it would grow to become the world’s largest stock exchange by market capitalisation.

The 20th century: successes and severe financial crises 

By 1900, the stock market had become the beating heart of the capitalist system. Economics and finance were now deeply interconnected. It was a century marked by sharp contrasts, alternating between periods of remarkable economic growth – such as the Roaring Twenties and the post-World War II boom – and severe financial crises, including the Great Depression of 1929 and Black Monday in 1987.

This volatility highlighted the need for regulation. Supervisory authorities such as the SEC (Securities and Exchange Commission) in the United States and Consob (National Commission for Companies and the Stock Exchange) in Italy were established to oversee financial markets, which were now dealing with enormous capital flows.

In 1971, the Nasdaq was founded, marking the beginning of the stock market’s transition from a physical trading floor, filled with shouting and hand signals, to an electronic system driven by computers and algorithms.

The digital age

Fast forward to today: the rise of the Internet has transformed how the stock market functions. It has brought greater accessibility, instantaneous transactions, unprecedented capital mobility, and the emergence of entirely new markets.

Now that we’ve explored its history, let’s take a closer look at how the stock market works today.

How does the stock market work?

To understand how the stock market works, it’s first essential to understand what it is. The stock market can be described as the financial engine that links the world of businesses with that of savers and investors. On one side, companies seek capital to fund their growth – whether by opening new branches, developing new products, or hiring staff. On the other hand, individuals look for opportunities to grow their savings. This is where the concepts of primary and secondary markets come into play.

The primary market is where shares are created. When a company lists on the stock exchange for the first time, it sells its shares directly to investors – a process known as an IPO (Initial Public Offering). Investors, by purchasing these shares, provide the company with the necessary funds to grow.

The secondary market, on the other hand, is the market in which existing shares are bought and sold between investors on a daily basis. Companies do not earn money from these transactions, but the market allows investors to profit from rising prices.

But shares are not the only financial instruments traded on the market. A large portion of investments also involves bonds. Understanding the difference between the two is fundamental.

What are shares?

As mentioned earlier, shares represent small units of ownership in a company. Investors buy them with the hope of selling them later at a higher price. Even by purchasing a single share, an investor becomes a partial owner of the company.

This ownership grants specific rights, such as receiving dividends (a portion of the company’s profits, although not always guaranteed) and participating in shareholder meetings.

However, buying shares comes with risks. Share prices are closely tied to the company’s performance. If the business thrives, the price typically increases. If it struggles, the cost can fall – sometimes dramatically. In extreme cases, shares can become worthless.

This is because share prices are determined by the balance of supply and demand. The more people want to buy a share – perhaps because the company has released a revolutionary product or reported record profits – the more its price rises. If demand drops, the price falls.

A helpful analogy: how much would you pay for a bottle of water in a city? Probably not much – it’s easy to find. But how much would you pay for that same bottle in the middle of the desert?

What are bonds?

Bonds differ fundamentally from shares. When an investor buys a bond, they do not become a shareholder; instead, they become a creditor. What does that mean in practice?

Put simply, a company issues bonds to raise capital, just as it does when issuing shares, but the mechanism is different. Buying a bond is similar to lending money to the company. The investor agrees to lend a specific amount, understanding that it will be repaid after a set period (e.g., five or ten years). In return, the company pays the investor regular interest payments, commonly referred to as coupons.

These coupons function like an interest rate, and the amount paid often reflects the company’s financial stability and trustworthiness. A well-established, transparent, and profitable company will typically offer a lower interest rate than a riskier, less stable one.

The same principle applies to government bonds, which a national government issues to finance public spending. For example, Italian government bonds tend to offer lower interest rates than Moldovan bonds, because Italy is generally considered more creditworthy and therefore less risky for investors.

Compared to shares, bonds are considered safer and more stable. However, this usually means they offer lower potential returns. As always, the general rule applies: higher risk, higher reward – lower risk, lower return.

What are indices?

This bonus section ties together both shares and bonds. So, what exactly is an index?

An index is simply a group or “basket” of listed companies (in the case of shares) or debt instruments (in the case of bonds), grouped according to specific criteria.

What kind of criteria? For example:

  • The S&P 500 includes the 500 largest publicly traded companies in the United States.
  • The NASDAQ-100 tracks the 100 largest non-financial companies listed on the NASDAQ.
  • The S&P Global Clean Energy Transition Index includes 100 companies worldwide that are involved in the clean energy sector.

For bonds, indices might group securities by maturity date, such as all government bonds with a 10-year or 30-year term.

These indices are useful benchmarks. They help investors assess overall market performance, track sectors, and compare their portfolios against broader trends.

Who operates on the market? The main players

Now that we’ve explored the tools and rules of the stock market, it’s time to understand who actually takes part.

Listed Companies

First of all, there are the listed companies themselves – without them, the stock market wouldn’t exist. As we’ve seen, these companies launch themselves into the financial markets to raise capital for expansion, innovation, or operations.

Investors: institutional and retail

Next, we have the investors, who buy shares and bonds in the hope of growing their capital. Investors can be categorised into two main groups: institutional investors and retail investors.

  • Institutional investors are the heavyweights of the financial system. They manage enormous sums of money and can influence the price trends of individual companies. This group includes mutual funds, pension funds, and insurance companies, which invest their clients’ money to generate returns and earn management fees in the process.
  • Retail investors, on the other hand, are individual savers who invest their own capital in the hope of earning a return on investment. If you’re reading this, chances are you already are – or soon will be – a retail investor. If so, we recommend checking out our blog for helpful content on avoiding common mistakes, understanding diversification, and overcoming cognitive biases in finance.

Financial intermediaries

Let’s now turn to the players who make investing possible: the financial intermediaries.

These operators form the essential bridge between those who issue shares and bonds and those who buy them. For various technical, legal, and security reasons, it’s not possible to trade directly on the stock exchange without going through these entities. In practical terms, we’re talking about banks and online brokers, which provide access to financial markets in exchange for commissions.

You might wonder, perhaps with mild irritation, “Why am I forced to go through an intermediary just to buy a share in Coca-Cola?” The answer is simple: for the same reason you need a driving licence to operate a car. You can’t just jump behind the wheel and press the pedals at random.

You might rightly argue that once you’ve got your licence, you can drive yourself. True – but can you build the car?

That’s the point. Building the “car” in this case means having ultra-secure IT systems, legal authorisations, direct exchange connections, and regulatory compliance. It’s a complex, expensive, and highly regulated activity – which is why supervisory authorities require only authorised intermediaries to operate in this space.

Supervisory authorities

Speaking of oversight, let’s talk about the supervisory authorities – the referees of the financial world. If the stock market were a football match, these are the officials ensuring that the game is played fairly and in accordance with the rules.

These authorities may be national, such as the SEC in the United States, CONSOB in Italy, or the FCA in the UK, or supranational, like ESMA (European Securities and Markets Authority) in the EU.

Their key responsibilities include:

  • Investor protection – ensuring that intermediaries act reasonably and responsibly towards consumers;
  • Market transparency – requiring listed companies to publish relevant information such as financial reports, quarterly results, and even executive changes;
  • Fair trading – monitoring markets to detect and sanction unfair practices like insider trading, where individuals trade using confidential or privileged information.

But you never stop learning.

In this article, we aim to provide an overview of the stock market, outlining its key components and how it operates. That said, what you’ve just read is likely just the tip of the iceberg.

Suppose you’ve landed here fresh from watching The Wolf of Wall Street, dreaming of sipping Martinis on a sun lounger in a luxury resort in the middle of the Pacific within a year, just like the next self-proclaimed guru. In that case, our advice is this: stay grounded and start learning seriously.

In the meantime, why not subscribe to our Telegram channel or even sign up directly to the Young Platform by clicking below? We regularly share guides, tips, and financial updates to help you stay informed and avoid being caught off guard.

See you next time!

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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.