Critical Hours for Brexit As the clock ticks for Brexit, Brussels and London seem to be working harder than before on their differences for a last-minute Brexit deal. The headlines in the past 48 hours have renewed optimism that the UK and European Union may secure a deal. However, even though the negotiations appear to be moving in the right direction and the related parties are keen to get a deal done, there is still some scepticism on the pace of developments ahead of the EU meeting.
Last- Minute Deal If there are enough concessions to allow for a deal, Prime Minister Boris Johson will have a deal to put through to Parliament in a special sitting on Saturday, the 19 th of October. The circumstances to call for a Saturday meeting are still not clear and are based on how the negotiations unfold. The recent flexibility on both sides is so far paving the way to the UK Prime Minister bringing a deal back from the EU to table in a special meeting on Saturday.
Deal or No Deal The Prime Minister will be forced to ask for a delay - deal or no deal. In the case of a deal this week, it will be a race against time trying to finalise an agreement and arrange for the draft to pass through the votes to exit the European Union on the 31 st of October. But the delay will be mostly to complete the formalities of a deal and will probably not dampen the recent optimism.
In the likelihood, that a deal with the EU is stalled or the deal that the Prime Minister negotiated with the EU is blocked in Parliament, the Prime Minister will be forced to seek for an extension under the Act of Parliament to the Brexit withdrawal data unless he finds a way around the Act. Markets Reactions Brexit hopes have steered risk sentiment in the European markets as the three-year-long Brexit saga seems to be coming to an end. It could be exhaustion that has caused both the EU and UK to be more flexible in allowing Brexit to happen.
European indices rose higher while the FTSE 100 closed slightly in the red due to a resurgent pound. Global equities rallied across the board despite growth forecasts from the IMF. According to the IMF, the global economy is growing at its slowest pace since the financial crisis and would hit only 3% this year.
The UK is expected to grow at 1.2% in 2019 compared to 1.4% last year due to Brexit-related uncertainties. Source: Bloomberg Terminal The British Pound As the UK appears to be on the point of a breakthrough on a Brexit deal, the Pound is soaring and the Sterling has room for more upside movement if Brexit hurdles are cleared. However, in anticipation of more clarity this Wednesday, the GBPUSD pair is in the consolidation phase just below the 1.28 level.
GBPUSD (3 Day-Chart) Source: Bloomberg Terminal We expect the Sterling pairs to remain volatile ahead of the summit! All in all, the path of the Pound in either direction would be sharp and volatile. A deal with the EU backed by parliament could send the pair rallying to 1.40 level while a disruptive no-deal outcome could see the pair plummeting to the lowest level seen in 2016.
By
GO Markets
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On February 28, 2026, as the joint US and Israeli attack began, the numbers on the screens started moving in ways that felt clinical, even as the reality on the ground with the tragic deaths of civilian casualties in Iran, felt anything but. Markets, as they say, do not have a moral compass, rather they have a weighing machine and right now, they are weighing the transition of the entire global economy from a "just-in-time" model to a "just-in-case" cycle.
What markets were signalling
On March 2, the index tape stayed cautious while defence rose. Historically, conflicts can speed up restocking and orders but how big it gets (and how fast) still depends on budgets, approvals and delivery bottlenecks.
The Winners
1. Hanwha Aerospace (012450.KS)
Hanwha is one of the more actively traded names linked to the “K-Defence” theme, a company markets increasingly view as a scalable supplier into a tightening global artillery and munitions cycle. Capacity and delivery credibility.
When replenishment becomes urgent, the ability to produce at scale often matters as much as the platform itself. Export demand tied to systems like the K9 Thunder and Chunmoo has reinforced the narrative of durable order flow even when outcomes still hinge on budgets, approvals and delivery timelines.
Key things that can move sentiment: order-book updates, production cadence, and any follow-on export announcements.
2. Northrop Grumman (NOC)
Northrop moved into focus as investors repriced exposure to strategic modernisation and large, long-running programs. Defence markets often seen as mission-critical can persist across cycles. It’s less about one quarter and more about whether momentum stays steady if modernisation priorities remain in place (and whether timelines shift if they don’t).
Key variables that can move sentiment: Procurement pace, contract timing, and program-related funding language.
3. RTX Corporation (RTX)
RTX returned to the centre of the tape as investors priced an interceptor replenishment cycle and the economics of high-tempo air defence. Attrition is expensive and when usage rates rise, governments typically have to replenish inventories and, in many cases, fund production expansion which can extend backlog and lift revenue visibility.
Key variables that can move sentiment: Replenishment orders, manufacturing expansion indicators, and delivery throughput.
4. Lockheed Martin (LMT)
Lockheed drew attention as markets focused on missile-defence demand and the question every procurement desk faces in a high-tempo environment: how fast can inventories be rebuilt? If utilisation stays elevated, the winners tend to be the contractors best positioned to scale production and deliver reliably. Lockheed’s missile defence exposure keeps it closely tied to that replenishment narrative.
Key variables that can move sentiment: production ramp signals, unit economics, and budget-driven order cadence.
5. BAE Systems (BA.L)
With an £83.6 billion backlog and a central role in the AUKUS submarine program, BAE moved into focus as parts of Europe signalled higher defence spending ambitions. The stock rose 6.11% to a 52-week high amid a “risk-off” rotation, with traders watching AUKUS milestones and European air and missile defence procurement, including “Sky Shield”.
Key variables that can move sentiment: A potential catalyst is any clear step-up in German spending that lifts order flow across BAE’s European units, while key risks include a sharp spike in UK gilt yields, renewed pound sterling volatility, or “threat of peace” profit-taking.
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The Losers: not every ‘war stock’ rises
6. AeroVironment (AVAV)
AeroVironment surged 18% at the open before falling 17% intraday after reports that the US Space Force was reopening a US$1.4 billion contract. The move highlights how procurement processes and contract risk can drive volatility, even in supportive thematic environments.
7. Kratos Defence (KTOS)
Kratos sits in the drone and loitering munition theme that gained attention as the Middle East conflict intensified. The stock still sold off after earnings, highlighting a common defence-sector risk. Kratos announced a large follow-on equity offering in the US$1.2 billion to US$1.4 billion range, the move strengthens the balance sheet and can support future program investment.
For traders focused on short-term “conflict premium” narratives, dilution can quickly change the setup. Even when demand conditions appear supportive, the market may reprice the stock if each shareholder ultimately owns a smaller portion of the business.
8. Intuitive Machines (LUNR)
Some speculative space-tech names lagged as investors appeared to favour companies with more established defence-linked revenue.
9. Boeing (BA)
Boeing was down around 2.5% on the session. While its defence division is meaningful, its commercial business can be more sensitive to aviation demand, airspace disruptions and oil-price moves.
10. Spirit AeroSystems (SPR)
Spirit AeroSystems remains closely tied to the global aircraft production cycle as a major aerostructures supplier.Recent results showed widening losses despite higher sales, reflecting ongoing production cost increases on major aircraft programs. These pressures have weighed on investor confidence in the near-term outlook. The planned acquisition by Boeing may ultimately reshape the company’s position in the supply chain, but execution risk and production stability remain central to how the market prices the stock.
What to watch next
Escalation vs de-escalation: A shift toward diplomacy or ceasefire discussions can quickly change sentiment around defence stocks.
Oil and shipping: Energy spikes can tighten financial conditions and pressure cyclical sectors.
Budgets and awards: Price moves can sometimes precede contract decisions, with clarity arriving when awards are finalised.
Production capacity: Companies with proven production and delivery track records often attract the most investor attention.
Supply chain constraints: Rare earths, propulsion and electronics remain potential bottlenecks that can limit how quickly production scales.
The longer term lens
The 2026 Iran conflict is first and foremost a human tragedy. For markets, it may also represent a shift in how national security spending is prioritised within fiscal frameworks. If defence spending remains elevated over a multi year horizon, companies with scalable manufacturing capacity and integrated technology stacks could attract sustained investor attention. That said, markets move in cycles. Structural themes can persist, but they can also reprice quickly when assumptions change. Staying analytical and risk aware remains critical.
References to specific companies, sectors or market movements are provided for general market commentary only and do not constitute a recommendation, offer or solicitation to buy or sell any financial product.Market reactions to geopolitical or macroeconomic events can be volatile and unpredictable, and outcomes may differ materially from expectations.
Before the charts start talking, the region does. Over the weekend, the Middle East moved from tense to kinetic. Joint US and Israeli strikes hit targets inside Iran, and multiple outlets reported Iran’s Supreme Leader Ayatollah Ali Khamenei was killed. That single fact changes the whole market sentence structure and it is not just geopolitics, it is risk premia being re-priced in real time, across energy, volatility and the global growth outlook.
Markets do not trade tragedy, rather they trade uncertainty. When the uncertainty sits on top of global energy arteries, price discovery gets loud.
At a glance
What happened: Multiple major outlets reported that Iran’s Supreme Leader Ayatollah Ali Khamenei was killed following joint US and Israeli strikes inside Iran, with Iranian state media cited as confirming his death.
What markets may focus on now: A fast-moving repricing of geopolitical risk premia, led by crude and refined products, plus cross-asset volatility as headlines drive liquidity, correlations and intraday ranges.
What is not happening yet: Markets may be pricing more of a headline risk premium than a fully evidenced, sustained physical supply disruption.
Next 24 to 72 hours: Focus is likely to stay on escalation signals and second-order constraints, including any impact on Gulf shipping routes and the policy and diplomatic track, including any UN Security Council dynamics.
Australia and Asia hook: Flight and airspace disruptions are already spilling beyond the region. For markets, Asia-facing sensitivities can show up through refinery margins and shipping and insurance costs, while AUD can behave as a risk barometer when global risk appetite is unstable.
Oil is the transmission mechanism
Brent crude spiked by as much as 13% in early trade on Monday 2 March, touching around US$82 per barrel in reporting, as the Strait of Hormuz risk moved from theoretical to immediate. The Strait matters because roughly one-fifth of global oil and gas shipments pass through it and when tankers hesitate, insurers re-price, and routes get re-written, energy becomes a volatility product.
Base case: partial disruption and higher “risk premium” in crude, with big intraday swings. Upside risk: a sustained shipping slowdown or direct infrastructurehits, which some analysts warn could push crude materially higher. Downside risk: de-escalation headlines, emergency supply responses, orclearer shipping protection that compresses the risk premium.
The VIX does not move in a vacuum, and this spike in uncertainty is already spilling into other asset classes in a fairly ‘textbook’ way. As volatility reprices, the market’s first instinct has been a flight to safety, alongside a scramble for commodities most exposed to the conflict.
Monday saw Asia opened with that tone: Japan’s Nikkei 225 was reported down around 2.4%, and Australia’s ASX 200 dipped before stabilising. At the same time, defensive positioning showed up in classic safe havens. Gold futures gapped higher by roughly 3% over the weekend, while traditional refuge currencies, led by the Swiss franc, attracted immediate inflows against both the euro and the US dollar.
Equity risk, by contrast, took the hit. US index futures, including the Dow and S&P 500, opened lower as desks moved to price in the twin threat of a wider regional conflict and the inflationary drag that can follow a sharp jump in energy costs.
Gold rallied as the market reached for insurance. Reporting had gold up close to 3% in the same Monday session that oil surged. Worth noting for Aussie and Asia traders: when oil jumps and gold jumps together, the market is often telling you it is worried about both inflation and growth. That is a messy mix for central banks, including the RBA, because petrol-driven inflation can rise even as demand softens.
What this could mean for CFD risk management
Focus 1: map the event risk calendar
In headline-driven markets, prices can move faster than liquidity. The risk is not just being wrong; it can also be timing and execution risk in volatile conditions.
Some traders monitor which developments might change market sentiment (for example, official statements or verified operational updates). If you choose to trade, it may be worth understanding how price gaps and volatility could affect your position, including around session opens and major announcements.
Markets can gap or move quickly, and order execution (including stop orders, if used) may not occur at expected levels, especially in fast conditions or low liquidity. Features and outcomes depend on the product terms and market conditions.
Focus 2: watch the energy to inflation pathway
If crude remains elevated, markets may watch whether inflation expectations shift. If that occurs, it could influence rates, equities and FX and although outcomes depend on multiple factors and can change quickly.
That may be reflected in:
Global bond yields, as rates markets adjust.
Equity valuation sensitivity, particularly in long-duration and growth-heavy areas.
FX moves, including across the Australian dollar, Japanese yen, and some commodity-linked currencies.
Volatility headlines can encourage rushed decisions and for leveraged products like CFDs, acting without a plan can increase the risk of losses. During times like this, a pattern does emerge.
This isn’t about being “wrong” so much as it’s about skipping the emotional reaction between headline and trade idea.
Translation: The headline isn’t your signal. Your process is.
Middle East flare-ups, sanctions, shipping disruptions, regional security shocks? This is your general checklist for assessing how geopolitical developments may affect markets.
Note: This article provides general information only and is not financial advice. It does not take into account your objectives, financial situation or needs. CFDs are complex, leveraged products and carry a high risk of loss. Consider whether trading CFDs is appropriate for you and refer to the relevant disclosure documents before trading.
Step 1. Identify the driver
Here’s the trap: “Iran” is not the driver. “Conflict” is not the driver. Those are categories useful for cable news but too broad for a risk-defined CFD trade. What moves markets is the mechanism that got worse today than it was yesterday. Separate the headline from the specific mechanism.
Key energy shipping chokepoints (including the Strait of Hormuz and the Suez Canal) are often monitored during periods of heightened tension.
Driver A: Energy risk
This is the Strait of Hormuz, shipping lanes, insurance and rerouting story. In Iran flare-ups, markets care because the threat isn’t just “war,” it’s friction in oil logistics including tankers avoiding routes, insurance premiums surging and temporarily suspended transits. When Hormuz risk gets priced, oil prices may react quickly where markets perceive increased shipping or supply risk, which can influence inflation expectations.
Driver B: Supply risk
This is not “ships are nervous.” This is about production outages, infrastructure hits, refinery disruptions and export constraints. This driver tends to matter more when the headline implies physical damage or credible near-term capacity loss.
Driver C: Funding stress
This is the under-discussed engine of ugly CFD outcomes: the “who needs dollars right now?” problem. This is not “risk-off vibes,” this is liquidity tightening, the kind that makes markets move together and can coincide with wider spreads, slippage and faster price moves, which may affect execution.
In an Iran flare-up, funding stress shows up when participants stop debating the headline and start doing the mechanical work of de-risking: broad USD demand, carry trades unwinding and correlated selling across risk assets. And here’s the key filter that stops you from overreacting: the USD tends to strengthen persistently and broadly mainly during severe funding stress, not every routine fear spike.
Driver D: Policy amplification
This is not about tensions rising so much as the rules changing, the kind of change that outlives the headline cycle and forces real repricing because it alters incentives, access, or flows. The Iran conflict headlines won’t stay local if policy escalates them through sanctions (supply, payments, shipping, insurance), changes to retaliation rules, or shifts in central bank reaction functions as oil risk feeds into inflation risk. That can harden rate expectations.
This is where “geopolitics” stops being narrative and becomes policy constraint and policy constraints tend to create follow-through because they change what market participants can do, not just what they think.
Before acting on a headline
If you choose to monitor breaking news, consider pausing before trading and checking whether the development is new, whether there are observable real-world constraints, and how markets are reacting. Don’t ask ‘is this bullish for gold?’. Instead, consider:
Is this a flow story, a barrel story, a funding story, or a policy story?
Is it new information or a remix of what markets already knew?
Is there evidence of real-world constraint (shipping behaviour, insurance, official measures), or just rhetoric?”
Step 2. Identify the key markets
Some traders stick to a small set of markets they know well, especially when headlines hit. Liquidity and spreads can change fast. If you try to watch everything, you may end up trading your own adrenaline rather than the market.
1) Oil (WTI or Brent proxy)
If the driver is energy flow risk or supply risk, oil is usually the first and cleanest repricing channel—risk premium, inflation impulse, and global growth expectations all run through here.
2) USD conditions (DXY proxy or your most tradable USD pairs)
Not because the USD is always “safe haven,” but because it’s the funding layer under everything. In true stress, you’ll see broad USD strength; in “headline stress,” you often won’t.
3) Gold
Gold is not “up on fear” by default, its fear filtered through USD and real yields. If USD funding stress ramps up, gold can be pulled in different directions and this is why traders get whipsawed: they trade the story, not the cross-currents.
4) A volatility gauge (execution risk, not ideology)
This can help gauge whether conditions may lead to wider spreads, slippage or faster moves.
5) The instrument you actually trade
For a lot of CFD traders, this is where the Iran shock becomes your problem in the form of local markets and local positioning and USD pairs.
Don’t map by habit, map by driver
Energy flow risk? Oil first, then risk indices, then FX linked to risk/commodities.
Funding stress? USD conditions first, then JPY crosses, then equities.
Policy shock? Watch oil + USD together—policy can tighten both simultaneously.
Translation: For some traders, focus comes from watching fewer markets that are most relevant to the driver they’re assessing.
Step 3. Check the charts that matter
Before considering any trade setup, some traders do a quick ‘triage’ check. The aim isn’t prediction, it’s checking whether fast markets could mean wider spreads, slippage or sharper moves in leveraged products like CFDs.
Chart A: Oil
What you’re checking: Is the market pricing real disruption risk, or just reacting? In Iran-related flare-ups, “Hormuz risk” narratives tend to show up as a risk premium conversation in oil, often faster than it shows up in equities or FX.
Examples of chart features some traders look at include
Is price breaking and holding above a prior structure level? (Not just spiking).
Did it gap and then fill? (Often means headline heat > real constraint).
Is the move continuing during liquid sessions, or only during thin hours? (Thin-hours moves are where CFD spreads can punish you the most).
Translation: Oil indicates whether the Iran story may become an inflation/flow story or just a screen-flash.
Chart B: USD
What you’re checking: Is this turning into a funding event? The USD doesn’t “safe-haven” on schedule. In some episodes of severe global funding stress, the USD has strengthened broadly and persistently, although this isn’t consistent across all headline-driven spikes.
Practical CFD filters:
Broad USD strength across multiple pairs (not just one cross doing something weird).
Commodity FX vs USD (AUD, CAD proxies) behaving like risk is truly tightening.
JPY crosses as a stress indicator (carry unwind tells the truth quickly).
If USD is not confirming, that’s information. It often means: headline risk is loud, but global liquidity isn’t actually panicking.
Translation: USD indicates whether the Iran headline is “market stress”… or “market noise with wider spreads and higher execution risk.”
Chart C: Volatility
What you’re checking: How dangerous normal sizing has become.
Use a sizing governor that forces honesty:
Normal ranges → normal size
~1.5× typical range expansion → consider half size
~2× range expansion → quarter size or stand aside
Some traders reduce position size or choose not to trade when ranges expand materially versus usual conditions. Any sizing approach depends on individual circumstances and risk tolerance.
Because in CFDs, volatility doesn’t just change directionality, it changes execution quality, stop distance, and how fast a loss becomes a margin problem.
Translation: Volatility is your permission slip or your stop sign.
Daily volatility chart | Source: Google Finance
Step 4. Choose a setup type
Geopolitics creates volatility but it doesm't guarantee trend.
Pick structure, not opinion
Breakout: after the market forms a post-headline range.
Pullback: once trend is established and liquidity steadies.
Mean reversion: only if the spike stalls and structure confirms.
Common mistake: picking direction first, then hunting confirmation.
Translation: The setup is the response to price behaviour, not your worldview.
Step 5. Define risk
From a general risk-management perspective, traders often define that a trade idea is not complete until it has
Entry condition: what must happen for you to participate
Invalidation: where you are wrong
Position size: based on dollars-at-risk, not conviction
Session max loss: daily or weekly cap (protects you from spiral trading)
For CFDs specifically, regulators emphasise how leverage can accelerate losses, and why protections such as margin close-out arrangements, leverage limits and negative balance protection (where applicable) exist.
US inflation data on Wednesday is the week's centrepiece, but with oil nearing seven-month highs, Bitcoin (BTC) sentiment shifting, and the Australian dollar at three-year highs, traders have plenty to navigate in the week ahead.
Quick Facts
US inflation rate (February) is the key binary event for rate cut pricing and equity direction.
Brent crude is trading around US$82–84/bbl, near seven-month highs, with a $4–$10 geopolitical risk premium baked in from Iran/Hormuz tensions.
Bitcoin is trading above US$70,000 as of 6 March, a potential trend change if it holds through the week.
United States: inflation in focus
Last month’s US inflation reading showed prices rising 2.4% year-on-year, still well above the Fed's 2% target.
February's inflation rate, due Wednesday, will be scrutinised for signs that tariff pass-through or rising energy costs are pushing prices back up, or whether the slow grind lower is still intact.
The March FOMC meeting on 17–18 March is now priced at only an 4.7% probability of a cut. A higher-than-expected inflation print this week could potentially push rate cut expectations further out.
A softer read opens the door to renewed cut pricing and potential relief across risk assets.
Key Dates
US Inflation Rate (February CPI): Wednesday 11 March, 12:30 am (AEDT)
Monitor
Core vs. headline inflation divergence as evidence of tariff pass-through in goods prices.
2-year and 10-year treasury yield sensitivity to the print.
USD direction and FedWatch repricing in the lead up to the 18 March FOMC decision.
Target rate probabilities for 18 March FOMC meeting | CME
Oil: elevated and event-sensitive
Brent is currently trading around US$83–85 per barrel, with a 52-week range spanning $58.40 to $85.12, reflecting the dramatic move triggered by the Middle East conflict.
Analysts estimate the geopolitical risk premium already baked into oil at US$4–$10 per barrel, and average 2026 Brent forecasts have been lifted to US$63.85/bbl, up from US$62.02 in January.
The EIA's Short-Term Energy Outlook forecasts Brent to average $58/bbl in 2026, well below the current spot price.
The gap between spot and the forecast baseline could be a useful frame for traders this week: any de-escalation signal from the Middle East could rapidly close that gap.
Monitor
Strait of Hormuz developments and any diplomatic signals from Iran nuclear talks.
EIA weekly oil inventory data.
Oil's knock-on to inflation expectations and whether it shifts central bank posture.
Energy sector equity performance relative to the broader market.
BTC has been attempting to stabilise after a brutal 53% correction over the past 17 weeks, fuelled by escalating geopolitical tensions and renewed tariff concerns.
However, yesterday saw a 8% jump back above $72,000, and the crypto “fear and greed index” jumped up to 29 (fear), up from below 20 (extreme fear), where it has been sitting for over a month, indicating a potential sentiment shift.
A cooler-than-expected US inflation print on Wednesday could provide further fuel for the breakout; a hot print risks potentially pulling BTC back below the US$70,000 level it has just reclaimed.
Monitor
Inflation print reaction on Wednesday as the primary macro catalyst for the move.
Any rotation into altcoins following BTC strength.
ETF inflow/outflow data as confirmation of institutional participation.
The Aussie is trading near more than three-year highs and heading for its fourth consecutive monthly gain, up more than 6% year-to-date, making it the top-performing G10 currency in 2026.
The driver is a clear policy divergence. RBA Governor Michele Bullock signalled the March policy meeting is "live" for a possible rate increase, and warned that an oil price shock from Iran tensions could reignite domestic inflationary pressures.
Market pricing now suggests around a 28% chance of a 25bp hike at the upcoming meeting, while fully pricing in tightening through May, and around a 75% chance of another increase to 4.35% by year-end.
This hawkish read, set against a Fed on hold and facing dovish political pressure, creates a potential structural tailwind for the Aussie.
Monitor
AUD/USD reaction to Wednesday's US inflation data.
RBA rate hike probability repricing through the week.
Iron ore and commodity prices as secondary AUD drivers.
China demand signals, given Australia's export exposure.
Latin America (LATAM) saw over $730 billion in crypto volume in 2025, a 60% year-on-year surge that made the region responsible for roughly 10% of global crypto activity.
In 2026, institutional players are starting to take the region seriously, regulation is crystallising, and the structural drivers from 2025 show no sign of fading. But the region is not a single story, and 2026 will test whether the current momentum is built on solid fundamentals or speculative optimism.
Quick facts
LATAM monthly active crypto users grew 18% year-on-year (YoY), three times faster than the US.
Argentina reached 12% monthly active user penetration, accounting for over a quarter of the region's crypto activity.
Over 90% of Brazilian crypto flows are now stablecoin-related.
Three LATAM countries rank in the global top 20: Brazil (5th), Venezuela (18th), Argentina (20th).
Peru's crypto app downloads grew 50% in 2025, with 2.9 million downloads.
From survival tool to financial infrastructure
Latin America did not embrace cryptocurrency because of speculation. It embraced it because traditional financial systems repeatedly failed ordinary people. Over the past 15 years, average annual inflation across the region's five largest economies ran at 13%, compared to just 2.3% in the US over the same period.
In Venezuela, it reached 65,000% in a single year. In Argentina, it exceeded 220% in 2024. For millions of people, holding savings in local currency was a slow act of self-destruction. Stablecoins became the natural response. Digital assets pegged to the US dollar offered a reliable store of value, borderless transferability, and access without a bank account.
Unlike in the West, where crypto is seen more as a speculative instrument, in LATAM it has become a necessary financial tool. However, adoption drivers are not entirely uniform across the region. Brazil and Mexico are institutional stories, driven by regulated market participation and established financial players.
Argentina and Venezuela remain store-of-value plays, with crypto serving as a direct hedge against fiat collapse. And Peru and Colombia are more yield-seeking markets, where crypto offers returns that traditional savings accounts cannot match.
How fast is LATAM adopting crypto?
LATAM’s on-chain crypto volume rose 60% year-on-year in 2025. The region has recorded nearly $1.5 trillion in cumulative volume since mid-2022, peaking at a record $87.7 billion in a single month in December 2024.
Monthly active crypto users across LATAM also grew 18% in 2025, three times faster than the US.
Stablecoins are the primary vehicle driving this adoption. Of the $730 billion received in 2025, $324 billion moved through stablecoin transactions, an 89% year-on-year surge. In Brazil, over 90% of all crypto flows are stablecoin-related, and in Argentina, stablecoins account for over 60% of activity.
Looking ahead, the Latin America cryptocurrency market is forecast to reach $442.6 billion by 2033, growing at a compound annual rate of 10.93% from 2025, according to IMARC Group.
For traders, the speed of adoption matters less as a headline than what is driving it: a region of 650 million people building parallel financial infrastructure in real time, with stablecoins as the foundation.
LATAM Crypto — By The Numbers
LATAM crypto by the numbers
Total on-chain volume
$730B
Total on-chain crypto volume received across LATAM in 2025 (~10% of global total)
+60% year-on-year
Stablecoin transaction volume
$324B
LATAM stablecoin transaction volume in 2025, reflecting surging demand for dollar-pegged assets
+89% year-on-year
Brazil's share of LATAM volume
~33%
Of all LATAM on-chain volume received by Brazil in 2025, making it the region's dominant crypto market
~250% annual growth
Annual remittance market
$142B
Annual remittance flows across Latin America, with an increasingly large share now settled in stablecoins
Stablecoin-settled
The institutional turn
For most of LATAM’s crypto history, adoption was bottom-up. Unbanked or underbanked retail users drove volumes through local exchanges. That picture is now changing at the top end of the market.
In February 2026, Crypto Finance Group, part of the leading global exchange operator Deutsche Börse Group, announced its expansion into Latin America, targeting banks, asset managers, and financial intermediaries seeking institutional-grade custody and trading infrastructure.
Traditional banks and fintechs are following suit. Nubank now rewards customers for holding USDC. Brazil's B3 exchange approved the world's first spot XRP and SOL ETFs, ahead of the US, in 2025. Centralised exchanges, including Mercado Bitcoin, NovaDAX, and Binance, have collectively listed over 200 new BRL-denominated trading pairs since early 2024.
In March 2025, Brazilian fintech Meliuz became the first publicly traded company in the country to launch a Bitcoin accumulation strategy, now holding 320 BTC.
“Crypto adoption in LatAm is already global-scale. What the market needs now is institutional-grade governance, and that’s exactly why we’re here,” — Stijn Vander Straeten, CEO of Crypto Finance Group
Crypto remittance use case
Latin America receives hundreds of billions of dollars annually from workers abroad, making remittances one of the most concrete and measurable crypto use cases in the region. Traditional transfer services charge an average of 6.2% per transaction. On a US$300 transfer, that is roughly US$20 in fees.
Blockchain-based infrastructure more broadly offers dramatic fee reductions. Bitcoin brings costs to around US$3.12 per US$100 transferred. While cheaper alternatives like XRP or Ethereum layer-2 infrastructure can reduce that to less than US$0.01.
For a migrant worker sending US$1,500 home to Peru, switching from a legacy bank saves more than the average Peruvian weekly wage in fees alone.
LATAM’s crypto regulatory environment
The variable that will most determine whether LATAM lives up to its 2026 potential is crypto regulation. And here, the picture is genuinely mixed.
Brazil leads the region with its Virtual Assets Law, which covers asset segregation, VASP licensing, AML/KYC requirements, and capital standards. It also implemented the Travel Rule for domestic VASP transfers, which came into force in February 2026. However, some more controversial proposals, including a US$100,000 cap on cross-border stablecoin transactions and a ban on self-custody wallet transfers, remain under active consultation.
Mexico's 2018 Fintech Law remains one of the world's earliest formal recognitions of virtual assets. Chile's 2023 Fintech Law established licences for exchanges, wallets, and stablecoin issuers, formally recognising digital assets as 'digital money.'
Bolivia reversed a decade-long crypto ban in June 2024 by authorising regulated digital asset transactions. Argentina introduced mandatory exchange registration in 2025. And El Salvador continues to expand tokenised economic initiatives despite removing Bitcoin's legal tender status.
Ten countries across the region now have formal crypto frameworks of some kind. But for traders, regulatory divergence remains a live risk, and given Brazil receiving nearly one-third of all LATAM crypto volume, any significant policy reversal there could have outsized consequences.
Brazil's institutional momentum is the most significant structural trend. With $318.8 billion in on-chain volume in 2025, Brazil effectively is the LATAM market.
The outcome of the Brazil stablecoin consultation could have a big influence. A restriction on foreign stablecoins in domestic payments would directly impact the most traded asset class in the region's dominant market.
Argentina is the volatility play. Monthly active user penetration of 12% and 5.4 million crypto app downloads in 2025 signal deep and growing retail engagement.
Colombia is an early-warning market to watch. The peso's 5.3% depreciation in 2025 and deepening fiscal crisis are driving stablecoin inflows in a pattern that mirrors Argentina's trajectory in earlier years. If Colombia's macro situation deteriorates further, crypto adoption could accelerate.
There is also an exchange concentration risk at play. Binance crypto exchange is the primary exchange for over 50% of LATAM crypto users. If the exchange faces any regulatory action, operational disruption, or competitive shock, it could have an outsized market impact.
Bottom line
Latin America's crypto market has entered a new phase. The structural drivers that caused initial crypto-demand in the region have not gone away: inflation, remittances, financial exclusion, and currency instability are all still at play.
What has changed is the layer being built on top of them. Institutional infrastructure, regulatory frameworks, corporate treasury adoption, and global exchange capital flowing into a region that was, until recently, largely self-contained.
Brazil's near-250% volume growth in 2025 and its position receiving nearly one-third of all LATAM crypto are the defining market developments. Its regulatory trajectory, stablecoin policy decisions, and ETF pipeline will effectively set the tone for the region in 2026.
For traders, the headline growth figures are real, but so are the concentration risks, regulatory uncertainties, and country-level divergences that sit beneath them.
On February 28, 2026, as the joint US and Israeli attack began, the numbers on the screens started moving in ways that felt clinical, even as the reality on the ground with the tragic deaths of civilian casualties in Iran, felt anything but. Markets, as they say, do not have a moral compass, rather they have a weighing machine and right now, they are weighing the transition of the entire global economy from a "just-in-time" model to a "just-in-case" cycle.
What markets were signalling
On March 2, the index tape stayed cautious while defence rose. Historically, conflicts can speed up restocking and orders but how big it gets (and how fast) still depends on budgets, approvals and delivery bottlenecks.
The Winners
1. Hanwha Aerospace (012450.KS)
Hanwha is one of the more actively traded names linked to the “K-Defence” theme, a company markets increasingly view as a scalable supplier into a tightening global artillery and munitions cycle. Capacity and delivery credibility.
When replenishment becomes urgent, the ability to produce at scale often matters as much as the platform itself. Export demand tied to systems like the K9 Thunder and Chunmoo has reinforced the narrative of durable order flow even when outcomes still hinge on budgets, approvals and delivery timelines.
Key things that can move sentiment: order-book updates, production cadence, and any follow-on export announcements.
2. Northrop Grumman (NOC)
Northrop moved into focus as investors repriced exposure to strategic modernisation and large, long-running programs. Defence markets often seen as mission-critical can persist across cycles. It’s less about one quarter and more about whether momentum stays steady if modernisation priorities remain in place (and whether timelines shift if they don’t).
Key variables that can move sentiment: Procurement pace, contract timing, and program-related funding language.
3. RTX Corporation (RTX)
RTX returned to the centre of the tape as investors priced an interceptor replenishment cycle and the economics of high-tempo air defence. Attrition is expensive and when usage rates rise, governments typically have to replenish inventories and, in many cases, fund production expansion which can extend backlog and lift revenue visibility.
Key variables that can move sentiment: Replenishment orders, manufacturing expansion indicators, and delivery throughput.
4. Lockheed Martin (LMT)
Lockheed drew attention as markets focused on missile-defence demand and the question every procurement desk faces in a high-tempo environment: how fast can inventories be rebuilt? If utilisation stays elevated, the winners tend to be the contractors best positioned to scale production and deliver reliably. Lockheed’s missile defence exposure keeps it closely tied to that replenishment narrative.
Key variables that can move sentiment: production ramp signals, unit economics, and budget-driven order cadence.
5. BAE Systems (BA.L)
With an £83.6 billion backlog and a central role in the AUKUS submarine program, BAE moved into focus as parts of Europe signalled higher defence spending ambitions. The stock rose 6.11% to a 52-week high amid a “risk-off” rotation, with traders watching AUKUS milestones and European air and missile defence procurement, including “Sky Shield”.
Key variables that can move sentiment: A potential catalyst is any clear step-up in German spending that lifts order flow across BAE’s European units, while key risks include a sharp spike in UK gilt yields, renewed pound sterling volatility, or “threat of peace” profit-taking.
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The Losers: not every ‘war stock’ rises
6. AeroVironment (AVAV)
AeroVironment surged 18% at the open before falling 17% intraday after reports that the US Space Force was reopening a US$1.4 billion contract. The move highlights how procurement processes and contract risk can drive volatility, even in supportive thematic environments.
7. Kratos Defence (KTOS)
Kratos sits in the drone and loitering munition theme that gained attention as the Middle East conflict intensified. The stock still sold off after earnings, highlighting a common defence-sector risk. Kratos announced a large follow-on equity offering in the US$1.2 billion to US$1.4 billion range, the move strengthens the balance sheet and can support future program investment.
For traders focused on short-term “conflict premium” narratives, dilution can quickly change the setup. Even when demand conditions appear supportive, the market may reprice the stock if each shareholder ultimately owns a smaller portion of the business.
8. Intuitive Machines (LUNR)
Some speculative space-tech names lagged as investors appeared to favour companies with more established defence-linked revenue.
9. Boeing (BA)
Boeing was down around 2.5% on the session. While its defence division is meaningful, its commercial business can be more sensitive to aviation demand, airspace disruptions and oil-price moves.
10. Spirit AeroSystems (SPR)
Spirit AeroSystems remains closely tied to the global aircraft production cycle as a major aerostructures supplier.Recent results showed widening losses despite higher sales, reflecting ongoing production cost increases on major aircraft programs. These pressures have weighed on investor confidence in the near-term outlook. The planned acquisition by Boeing may ultimately reshape the company’s position in the supply chain, but execution risk and production stability remain central to how the market prices the stock.
What to watch next
Escalation vs de-escalation: A shift toward diplomacy or ceasefire discussions can quickly change sentiment around defence stocks.
Oil and shipping: Energy spikes can tighten financial conditions and pressure cyclical sectors.
Budgets and awards: Price moves can sometimes precede contract decisions, with clarity arriving when awards are finalised.
Production capacity: Companies with proven production and delivery track records often attract the most investor attention.
Supply chain constraints: Rare earths, propulsion and electronics remain potential bottlenecks that can limit how quickly production scales.
The longer term lens
The 2026 Iran conflict is first and foremost a human tragedy. For markets, it may also represent a shift in how national security spending is prioritised within fiscal frameworks. If defence spending remains elevated over a multi year horizon, companies with scalable manufacturing capacity and integrated technology stacks could attract sustained investor attention. That said, markets move in cycles. Structural themes can persist, but they can also reprice quickly when assumptions change. Staying analytical and risk aware remains critical.
References to specific companies, sectors or market movements are provided for general market commentary only and do not constitute a recommendation, offer or solicitation to buy or sell any financial product.Market reactions to geopolitical or macroeconomic events can be volatile and unpredictable, and outcomes may differ materially from expectations.
