Welcome to another edition of Qume Market Mondays!
Crypto markets have been on an upwards trend since last week.
Bitcoin crossed the $11,400 mark on 27 July and closed the monthly candle around the same price level. This rally is good news for bitcoin miners and mining revenues are up by 7% as this rally induced more transaction activity picking up higher network fees.
This is also justified by the ratio of bitcoin miner revenue to the number of transactions which tells us the average cost per transaction. It has increased amid this bull run although miners are still being forced to sell their bitcoin as soon as they get it.
Volumes have also grown by more than 8x on some futures exchanges and open interest on Bitcoin futures is just shy of $6bn.
Amidst this rally however came yesterday’s crash where the price of Bitcoin and Ether plunged by 13% and 21%, respectively, within minutes. The move liquidated more than $1 billion worth of futures contracts as BTC/USD dropped from around $12,000 to as low as $10,550.
Due to increased activity in DeFi platforms, trading volumes on DeFi exchanges are at an all-time high of $4.5bn.
Due to the Defi boom in July and now with the rallying crypto markets, the open interest on Ether futures has surged to cross the $1bn mark for the first time.
Open interest in futures and options markets have been steadily increasing during this rally in both BTC and Ether derivatives markets. CME’s open interests in futures markets is among top-five in the crypto industry and professionals seem constructive on the price if they have switched from shorts to long positions in the market.
Apple’s stock split
Apple announced late Thursday that it would have a 4:1 stock split, meaning that Apple will quadruple its number of shares outstanding without changing the valuation of the company. A stock split is attractive to investors as the price of each share becomes 1/4th of before the split stock price and that relaxes those who worry that the price of a share might be too high. Apple stocks rose 10% after the news broke out as is seen in the short term after a stock split is announced.
Big tech giants report mixed earnings
Amazon, Apple, Google and Facebook reported their quarterly earnings last week and the market received mixed signal from these reports:
1. Apple’s quarterly revenue has increased to around $59.68bn bn of which around $11bn is in profits. Apparently, the work from home products by apple has increased their sale amid the pandemic.
2. Amazon revenue surged 40% as shoppers redefine their shopping habits due to lockdowns and stay at home guidelines. Its revenue now stands at $88.9 bn.
3. Facebook and Google’s major source of revenue is through their ads and as it seems the digital marketing business is down as these two are hurting. Google’s corporate parent alphabet reported a 2% decline in revenue. Facebook, although, doubled its profits from last year, this quarter registered their slowest growth ever since the company went public.
NASDAQ composite rallied and closed at weekly gains after earnings reports.
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Other data sourced from skew.com