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Decentrader Market Update for August 5, 2020

by · 4 months ago

Decentrader brings you the most timely and relevant updates on the financial, Bitcoin, and cryptocurrency markets.

Stock in Europe and US remain confident

The traditional markets are continuing to make an argument that they are “too big to fail.” Stocks in Europe are hitting a weekly high alongside a rise in the United States’ futures market. 

Driving the market in Europe are commodity producers, travel companies — apparently undeterred by fears of a second-wave of COVID-19 infections in the fall — and retailers. Optimism surrounding the euro zone’s positive economic data may be tempered, however, by deepening cuts into companies’ workforces.

Worth noting is that euro zone PMI reports are scheduled for today.

Meanwhile, stocks in the U.S. have been bolstered somewhat by progress towards another economic stimulus package. A deal is expected by the end of the week — if lawmakers are to be believed. Tensions between Washington and Beijing are still ever-present, however, and are rarely divorced from the market.

Gold surpasses $2,000 per ounce

Gold continues to reap the benefits of a weakening U.S. dollar, hitting prices above $2,000 per ounce for the first time as government stimulus continues to be priced in and ten-year Treasury yields remain low. 

The yellow metal is up roughly 30% this year. Increases are primarily being driven by economic uncertainty surrounding COVID-19, central bank printing, and geopolitical instability — all of which are also benefitting the prices of silver and other precious metals.

Bitcoin catching its breath as futures volume surges

The Bitcoin market remains relatively flat, as of the time of this writing — with the most notable development being Barstool Sports’ founder Dave Portnoy claiming that he “wants to buy all the bitcoins” in an invitation to have Cameron and Tyler Winklevoss explain the leading cryptocurrency to him. The Gemini-founding twins accepted the invitation.

More directly relevant to the markets is the fact that open interest in Bitcoin futures hit a new all-time high of $5.6 billion on Saturday, as per data sourced from skew. Aggregated daily volumes also remain high — though there has been a slight decline over recent days as the market catches its breath.

Chart illustrating aggregated daily trading volume for BTC futures. Source: skew