Key highlights:

• Trump’s tariff decision: A 25 per cent tariff on steel and aluminium imports, including from Mexico and Canada, raises trade war concerns
• Market reactions: US equities remain resilient due to strong corporate earnings, while gold and the US dollar rise amid uncertainty
• Bond and energy markets: Treasury yields show mixed signals; Brent crude oil prices rise due to geopolitical tensions
• Asia’s response: Mixed market reactions, with optimism driven by DeepSeek’s AI model despite trade concerns
• Japan’s crypto regulation shift: Possible reclassification of cryptocurrencies as securities, impacting investments and tax policies
• Bitcoin accumulation by strategy: Strategy (formerly MicroStrategy) purchases 7,633 BTC, reinforcing institutional confidence in crypto

The financial landscape is navigating an ever-shifting environment, with risk sentiment holding steady despite significant macroeconomic developments on 11 February 2025.

One of the most notable events in recent days has been President Donald Trump’s decision to impose a 25 per cent tariff on all steel and aluminium imports, a move that includes key trading partners like Mexico and Canada without any exemptions. This policy, enacted under Section 232 of the Trade Expansion Act, has sent shockwaves through global markets, raising fears of potential trade conflicts and their broader economic fallout.

Trump has also hinted at the possibility of further increasing these tariffs and suggested the introduction of reciprocal tariffs, which could be announced as early as today or Wednesday. These developments have heightened market uncertainty as investors and analysts closely monitor whether these threats will materialise and how they might reshape global trade dynamics.

At the same time, the US corporate earnings season has provided a stabilising force, with strong performances from American companies reinforcing confidence in the economy’s underlying health.

However, the interplay between these macroeconomic and microeconomic factors, alongside other global trends such as Japan’s potential reclassification of cryptocurrencies and significant Bitcoin acquisitions by firms like Strategy (formerly MicroStrategy), paints a multifaceted picture of the current financial environment.

In this article, I will explore these developments in detail, analyse their potential impacts, and offer my perspective on how they shape the global risk sentiment.

Tariffs and market reactions

Let’s start with the tariff announcement, which has dominated financial news and market discussions in recent days. President Trump’s decision to impose a 25 per cent tariff on steel and aluminium imports under Section 232—a provision that allows the president to restrict imports deemed a threat to national security—marks a significant escalation in US trade policy.

Unlike previous tariff actions, which often included exemptions for key allies, this move explicitly excludes Mexico and Canada, two of the United States’ largest trading partners. This lack of exemptions has raised concerns, as it signals a more aggressive and unilateral approach to trade policy. Trump’s comments over the weekend and his warning that tariffs could “go higher” have added to the uncertainty, with market participants now bracing for the possibility of reciprocal tariffs.

Reciprocal tariffs, if implemented, would involve matching the tariff rates of other countries on US exports, potentially triggering retaliatory measures from affected nations. The timing of these potential announcements—possibly today or Wednesday—has kept markets on edge, as investors weigh the risks of a broader trade conflict.

Also Read: AI, personalisation, and 5 marketing activities you should be doing

From a market perspective, the immediate reaction to the tariff news has been varied. US equity indices, as measured by the MSCI US Index, rose by 0.7 per cent on Monday, with strong performances in the energy sector (+2.2 per cent) and information technology (+1.5 per cent). This resilience suggests that, for now, investors are focusing on the positive fundamentals of American companies rather than the potential negative impacts of tariffs.

The US earnings season has been particularly strong, with many companies surpassing expectations despite what analysts had considered a high bar. This strength in corporate fundamentals has provided a buffer against the macro uncertainties, supporting risk sentiment in the short term.

However, the longer-term implications of tariffs cannot be ignored. Tariffs on steel and aluminium could increase input costs for industries such as manufacturing, construction, and automotive, potentially squeezing profit margins and stoking inflation. If reciprocal tariffs are introduced, US exporters could face higher costs in foreign markets, further complicating the economic outlook.

Turning to the bond market, US Treasury yields ended Monday’s session with mixed results. Shorter-term yields, such as the two year and seven year, edged lower, reflecting some caution among investors about the near-term economic impact of tariffs.

Conversely, longer-term yields, including the 10-year (+0.2 basis points to 4.497 per cent) and 30-year (+1.4 basis points to 4.707 per cent), inched higher, suggesting that investors expect inflationary pressures from tariffs to persist over the longer term. This divergence in yield movements highlights the uncertainty surrounding the Federal Reserve’s next moves. Tariffs, by increasing costs and potentially delaying rate cuts, could complicate the Fed’s efforts to balance inflation and growth.

The US Dollar Index, meanwhile, rose by 0.3 per cent, reflecting safe-haven demand amid the tariff-related uncertainty. Gold, a traditional safe-haven asset, surged by 1.7 per cent to a fresh record high, underscoring investor concerns about geopolitical and economic risks. In the energy market, Brent crude oil prices rose by 1.6 per cent, supported by signs of a tighter market and geopolitical tensions, including Russia’s failure to meet its OPEC+ quota and rising natural gas prices in Europe.

Asian markets and crypto regulations

In Asia, the HSCEI index rose by 2.1 per cent for the third consecutive day, driven by optimism surrounding DeepSeek’s AI model and a perception that tariff tensions might be less severe than feared. However, early trading sessions on Tuesday showed mixed results for Asian equity indices, with US equity futures pointing to a lower open. This divergence highlights the uneven impact of tariff-related developments across regions.

While US markets have been buoyed by strong earnings, Asian markets remain more exposed to trade risks, given their reliance on exports. The resilience of risk sentiment in Asia, particularly in China, can also be attributed to positive developments in the AI sector, with companies like DeepSeek demonstrating resilience despite trade tensions. However, the broader implications of tariffs on global supply chains and economic growth remain a concern, particularly for export-dependent economies.

Also Read: How marketers can connect with APAC’s 450 million young gamers

Shifting focus to other global developments, Japan’s Financial Services Agency (FSA) is considering a significant regulatory change that could reclassify cryptocurrencies as securities. This potential shift, which could take effect by 2026, would have far-reaching implications for retail investors and the broader financial ecosystem. By classifying crypto as securities, Japan aims to strengthen investor protections, lower taxes on crypto investments, and enable domestic funds to invest in tokens.

This move could also pave the way for the approval of crypto exchange-traded funds (ETFs), including spot Bitcoin ETFs, which would attract institutional capital and boost market liquidity. Posts on X have highlighted the FSA’s plans, with some users speculating on the potential for tax cuts and ETF approvals.

However, these reports remain inconclusive, and the FSA’s final decision will depend on a comprehensive review of existing regulations. If implemented, this reclassification could position Japan as a leader in the global crypto market, potentially offsetting some of the negative sentiment surrounding tariffs.

Another notable development in the crypto space is the recent acquisition by Strategy (formerly MicroStrategy) of 7,633 Bitcoin for US$742 million between February 3 and February 9, at an average price of US$97,255 per Bitcoin. The firm now holds 478,740 Bitcoin, worth over US$46 billion, with an average purchase price of US$65,033 per Bitcoin.

This acquisition, representing 2.2 per cent of Bitcoin’s total supply, underscores the growing institutional interest in cryptocurrencies as a store of value and hedge against inflation. Strategy’s aggressive Bitcoin strategy has been closely watched by investors, with some viewing it as a bullish signal for the crypto market.

However, the timing of this acquisition, amid tariff-related uncertainty and rising gold prices, raises questions about the firm’s risk management approach. While Bitcoin has historically been seen as a safe-haven asset, its volatility and correlation with risk assets like equities could complicate its role in a tariff-driven market environment.

Balancing risk and optimism

From my perspective, the current global risk sentiment is a delicate balance between optimism and caution. On one hand, the strength of US corporate earnings and positive developments in sectors like AI and crypto provide a foundation for resilience. The MSCI US Index’s gains, driven by energy and tech, reflect confidence in the underlying fundamentals of the economy.

Similarly, Japan’s potential reclassification of crypto and Strategy’s Bitcoin acquisition signal growing institutional acceptance of digital assets, which could support risk sentiment in the longer term. On the other hand, the tariff announcement and the threat of reciprocal tariffs introduce significant uncertainty.

Also Read: Embracing global entrepreneurship: Redefining startup success beyond Silicon Valley

Tariffs, by increasing costs and disrupting supply chains, could stoke inflation and weigh on economic growth. The mixed performance of US Treasury yields, the surge in gold prices, and the rise in Brent crude oil all point to heightened concerns about the macroeconomic outlook.

In my view, the key question for markets is whether the positive microeconomic factors—such as strong earnings and innovation in AI and crypto—can continue to offset the negative macroeconomic risks posed by tariffs. While US markets have shown resilience so far, the potential for retaliatory measures from trading partners like China, Mexico, and Canada could escalate tensions and disrupt global trade.

For Asia, the optimism surrounding DeepSeek’s AI model and less severe tariff fears may provide temporary relief, but the region’s exposure to trade risks remains a concern. Japan’s potential crypto reclassification, if implemented, could be a game-changer, attracting capital and boosting sentiment. However, the success of this move will depend on the FSA’s ability to balance investor protections with market growth. Strategy’s Bitcoin acquisition, while bullish for crypto, also highlights the challenges of navigating a volatile market environment.

In conclusion, the global risk sentiment is supported by a combination of strong corporate fundamentals and positive developments in AI and crypto, but it remains vulnerable to tariff-related uncertainties. President Trump’s tariff announcement, under Section 232, has introduced significant risks, with the potential for reciprocal tariffs adding to the complexity. While US markets have been buoyed by earnings, the longer-term implications of tariffs on inflation, growth, and trade dynamics cannot be ignored.

In Asia, optimism surrounding AI and crypto provides a counterbalance, but the region’s exposure to trade risks remains a concern. Japan’s potential crypto reclassification and Strategy’s Bitcoin acquisition are positive signals, but their impact will depend on broader market conditions. As markets navigate this busy macro news backdrop, the interplay between microeconomic resilience and macroeconomic risks will shape the trajectory of global risk sentiment in the coming weeks and months.

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B Capital, a global multi-stage investment firm, has taken a significant step to strengthen its foothold in tech and AI investments by appointing Yan-David (“Yanda”) Erlich as General Partner.

Announced in January, this strategic move underscores the firm’s commitment to backing transformative AI-driven companies across early-stage and growth investments. With a track record of scaling tech ventures and investing in high-impact AI innovations, Erlich’s leadership is expected to further elevate B Capital’s presence in this rapidly evolving sector.

A seasoned entrepreneur, operator, and investor, Erlich brings a wealth of experience to his new role. Prior to joining B Capital, he served as COO and CRO at Weights & Biases, a leading AI developer platform, and held investment roles at Coatue Management.

His entrepreneurial background includes founding and scaling multiple venture-backed startups, including ChoiceVendor, which LinkedIn acquired. With this blend of hands-on operational experience and deep investment acumen, Erlich is poised to drive B Capital’s AI strategy forward.

Speaking about his vision for the firm’s AI investments, Erlich highlights B Capital’s strong foundation of entrepreneurs, operators, and investors as a key advantage.

Also Read: Global risk sentiment holds steady amid tariffs, AI optimism, and crypto shifts

“B Capital already brings together an experienced team; it was a key reason I chose to join. Our strategic partnership with BCG is also a differentiating competitive advantage, as they have a unique vantage point on the AI transformation,” he shares.

In an email interview, Erlich shares his insights about AI and how B Capital is approaching investment in the space.

The following is an edited excerpt of the conversation.

AI is rapidly evolving. What criteria or signals do you prioritise when evaluating potential investments in AI startups? Are there any red flags you watch out for in this space?

When things change quickly, I find it useful to go back to basics. What is true for (most) successful businesses: they are started by founders who care deeply about their customer base and market.

They have a compelling product that is deeply loved and actively used by their customer base. Especially at first, it is better to have fewer, more avid customers than many lukewarm ones.

They move fast: build, ship, learn from the market, iterate. One of my most durable insights has been, “A startup is not a company: it is an experiment to see if a company deserves to exist. Until product-market fit, the speed of hypothesis testing trumps everything. Startups die when they spend faster than they learn.”

They are hyper-focused: startups are better suited to solving a small set of very hard problems than many semi-hard ones.

Also Read: AI agents redefine art: Unlocking boundless creative possibilities in a new digital era

They are talent magnets: great people love to work with other great people.

They think about the whole problem: not just what product to build but also how to take it to market, price it, and market it.

The red flags I watch out for are when folks claim that it is “because of AI”. These axioms of what makes a high-quality startup no longer apply.

As an investor in both early-stage startups and growth-stage companies, how do you balance the inherent risks of nascent technologies with the need for scalability and long-term impact?

The quick answer is that it is not easy. On one hand, I am a huge believer in technology’s positive transformational impact: improving lives and human productivity and creating new category-defining winners. When betting on a company, I always ask myself why now: what new disruption permits this company to win?

On the other hand, business fundamentals apply. You need a great product with high engagement, operate in a large (or, ideally, quickly growing TAM), constantly build and defend your moats, maintain quality as you grow your teams, and more.

Balancing building for the future and “solving the problems of today, today; the problems of tomorrow, tomorrow” is part of the difficulty (and the fun).

It is important to be diligent in what we can: at the earliest stages, that is, the founders and technology, and whether they solve an acute pain in a large or growing market. Later, operational execution and market positioning matter. It is always important to see if the company is a great magnet for top talent across both tech and GTM.

It is also key to help where we can: through my personal network, the whole B Capital network, BCG, and many more. Making the investment is the beginning of the adventure.

Also Read: What we can tell about AI investment in SEA this year

From your perspective, what are the most promising trends in AI today? Conversely, what do you see as the biggest challenges for AI startups in gaining traction or achieving product-market fit?

AI is going to reshape every aspect of the economy. I am particularly excited to invest in startups helping to usher in the era of AI co-workers: intelligent agents working alongside humans in all aspects of work, from functional roles including marketing (B Capital is an investor in Writer), engineering (Poolside), and legal (EvenUp) to verticals across robotics (Apptronik), climate (Overstory), and healthcare (Atomwise).

To achieve this, we will also see more advances at the foundation model layer, including in advanced reasoning, personalisation, context, memory, and the ability to take and act on feedback. We will also see new infrastructure solutions, new security models, and ways to “onboard” agents into your organisation and have them collaborate with humans. Each of these allows for one or more very interesting companies.

The challenge that is top-of-mind right now is how to bridge the gap between the high-quality AI demo and the AI application or agent the organisation feels safe to deploy to production. I am confident this will be solved, but it will not be a silver bullet. It will be achieved through a combination of model advancements, developer tooling, continuous evaluations, guardrails and other safety mechanisms, and novel tech and UX, including better feedback mechanisms, at the application layer.

Are there specific industries or verticals where you see the most transformative potential for AI technologies, and how does B Capital aim to support innovation in these areas?

I will use the opportunity to reinforce that I’m grateful to be part of a team that has both a global purview and where I get to work alongside climate and healthcare investment experts. Our combined and global subject-matter expertise feels uniquely competitive.

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Image Credit: B Capital

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Life Science Incubator (LSI) has unveiled its largest co-working laboratory in Singapore at Elementum, located in JTC’s one-north business park.

As per a press statement, LSI offers flexible lab and office solutions to meet the diverse needs of life science companies. The facility includes open lab spaces and private suites with dedicated tissue culture rooms.

Tenants can also customise their spaces, with options to design bespoke wet lab and office areas.

The co-working lab offers flexible contract arrangements and full-service support, catering to startups and established companies. The facility also fosters a vibrant and innovative community, facilitating tenant collaboration.

Also Read: The future of medtech in Singapore: Innovation amid regulatory challenges

With the expansion, Life Science Incubator has tripled its laboratory space. LSI also plans to expand into the broader Asia Pacific region, with Australia as its next key market. LSI has been actively engaged in the Australian life sciences ecosystem for three years and is in discussions to potentially launch its first Australian location later this year.

LSI provides fully equipped, agile, and reliable lab spaces for biotech, medtech, and foodtech companies. It works closely with local accelerators, universities, and polytechnics to stimulate entrepreneurship and provide external resources to support spin-offs and new ventures.

“Our mission at LSI is to remove barriers for life sciences startups and innovators by providing the critical infrastructure they need to accelerate breakthroughs,” said Zeïna Henni, Director of Life Science Incubator.

Singapore’s life sciences sector has seen strong investor confidence, with 14 companies raising SGD92.4 (US$68) million in 2024, making it the top destination in Southeast Asia for biotech investment. The country’s commitment to the sector is reinforced by significant investments under the Research, Innovation and Enterprise 2025 plan (RIE2025), which allocated approximately SGD28 (US$21) billion in 2024 to key sectors, including life sciences.

Furthermore, Singapore’s regulatory framework and intellectual property protections attract leading biotech and medtech firms.

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This is how eFishery went from agritech hotshot to a total PR disaster.

Once the poster child of Indonesia’s agritech industry, eFishery’s reputation is officially in crisis mode. The narrative is being written for them, fuelled by media coverage and rumours (or media coverage written based on rumours). Without an authoritative source, proactive engagement, and transparency, the company is spiralling further into crisis instead of taking control of their story.

How the story unfolded

It all started when DSA broke the story from a whistleblower tip that eFishery had been falsifying transactions, inflating financial reporting, and creating shell companies. The company reported a US$16 million profit, but investigations uncovered a US$35.4 million loss. This was then followed by extensive coverage from Bloomberg News, The Jakarta Post, and Tech in Asia.

And eFishery? Instead of owning the narrative, they issued the following response:

“We are fully aware of the gravity of the market speculation and we take this matter with the utmost seriousness,” eFishery said in an emailed statement. “We remain dedicated to upholding the highest standards of corporate governance and ethics in all of eFishery’s operations.”

This is the equivalent of watching a house burn down and saying, “We are aware of the fire and take fires very seriously.” This is saying something without saying anything.

By most accounts, eFishery’s technology and product are legitimate. And yet, one of the brightest moments in eFishery’s comms wasn’t even from the company itself – it came from a product manager’s LinkedIn post.

A LinkedIn post from an eFishery product manager helped restore some credibility by publicly confirming the authenticity of its technology, including IoT-powered feeders and water sensors. Yet, the company’s leadership should have been at the forefront of the response.

Also Read: Ecosystem Roundup: eFishery faces fraud allegations | Indonesia’s tech funding hits a 3-year low | iMotorbike raises US$10M

The real people behind this scandal

Outside of the 50+ page investigation reports and financial audits, this crisis involves real people – over 1,000 employees, investors, partners, and customers who deserve clear, honest communication. In most situations and also likely in this case – 99.9 per cent of the 1,000+ employees were not responsible and have probably spent countless hours post-leak trying to fix the issue.

At this stage, from a communications perspective, it is important for leadership to articulate a clear path forward and a strategy to rebuild trust.

How eFishery can salvage at this point and takeaways for founders

• Issue a formal, transparent statement: Avoid the vague, generic PR responses and provide real answers.
• Put a human face to the response: Start using a credible, human face to address concerns head on.
• Proactively engage with stakeholders: Internal memos, town halls, direct investor communications. Silence breeds speculation.
• Commit to real governance reforms: Appoint independent auditors, strengthen compliance, and communicate changes regularly.
• Create a long-term communications plan, and execute it.

eFishery can still be salvaged but only if they are proactive in their communications. At this inflection point, leadership has two choices: take control of the narrative and move forward or continue letting others define their story.

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For years, the AI landscape was dominated by a few tech giants—Google, OpenAI, Meta—driven by the belief that training Large Language Models (LLMs) was an exclusive domain of companies with billions of dollars in computing resources. DeepSeek has just shattered that notion.

The historical parallel: When AI was considered untrainable

Neural networks were once considered impractical due to their training complexity. In the early days, before multi-layer perceptrons gained traction, single-layer networks struggled with even basic tasks. The introduction of backpropagation in the 1980s, pioneered by Geoffrey Hinton and his colleagues, was a turning point—it showed that deep networks could be trained effectively, giving birth to what we now call deep learning. Suddenly, what was once considered an untrainable, niche research field became the dominant paradigm in AI.

A similar shift is happening today. Previously, the assumption was that only trillion-dollar companies could afford to train LLMs. But DeepSeek has proven that with the right architectural optimisations and efficiency techniques, smaller players can break through.

The DeepSeek disruption: Smart moves over raw power

DeepSeek has demonstrated that AI isn’t just about brute-force computation—it’s about architectural intelligence. By leveraging techniques like:

• Mixture of Experts (MoE): Only activating necessary parts of the model to reduce computational overhead.
• Distillation: Training smaller models to mimic the performance of larger ones.
• Smarter resource utilisation: Running LLMs at a fraction of the cost of GPT-4.

DeepSeek has built a competitive model with just US$6 million in training costs, compared to OpenAI’s rumoured US$100 million for GPT-4. This is a fundamental shift, proving that AI dominance is not solely a function of computational power, but also of innovation in model design.

The market reaction: Nvidia’s dip and the reality of AI economics

Following DeepSeek’s announcement, Nvidia’s stock saw a temporary decline—an overreaction by the market, mistaking this development as a sign of declining GPU demand. In reality, it’s part of AI’s natural evolution: as architectures become more efficient, the focus shifts from sheer hardware reliance to algorithmic ingenuity.

This is a reminder that AI is not just a hardware race—it is an intellectual one. The best AI systems will not necessarily come from those who spend the most money but from those who think the most creatively.

Also Read: DeepSeeking the future: The ripple effect on tech, crypto, and global markets

China’s play: From hard work to smart work

China has long been perceived as a country that achieves success through relentless execution. DeepSeek challenges that stereotype, showing that Chinese AI research is not just about scaling hardware, but about making smart strategic moves. By proving that efficient models can rival state-of-the-art LLMs, DeepSeek has redefined the AI playing field, making it clear that the next AI breakthroughs may come from outside the traditional Silicon Valley elite.

The future: A democratised AI ecosystem

DeepSeek’s approach signals a new era—where smaller companies, startups, and research institutions can meaningfully compete in LLM development. This democratisation of AI will lead to:

• More innovation in architectures and training methodologies.
• Cost-efficient models that can be deployed widely.
• Increased competition, driving AI forward at an even faster pace.

In the same way that backpropagation unlocked deep learning’s potential, DeepSeek’s cost-efficient breakthroughs are making high-performance LLMs accessible beyond the corporate elite. The AI revolution is no longer about who has the most GPUs—it’s about who has the smartest approach.

DeepSeek has sent a clear message: The AI race is far from over, and the winners will be those who innovate, not just those who spend.

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.

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