Today, the markets are surging. Bitcoin jumped 5.15% to $7,150 and spot gold rose 0.2% to $1,618.90 per ounce. US stocks also rallied, with S&P 500 jumping 4.9% and Dow 5.1%. The upbeat start of the market came on the back of the growth rate of novel coronavirus infections slowing.
Looks like sustained rally all day across risk assets, mainly on the back of good COVID #s in Europe and mostly US.
Market ignored Japanese bad news (state of emergency) and focused on the good (fiscal package).
Awaiting tonight’s US #s to know if weekend was under-reported.
— Alex (@classicmacro) April 6, 2020
These gains came after on Friday the US Labor Department reported that the economy shed 701,000 jobs in March ending a streak of 113 weeks of employment growth.
Meanwhile, Jamie Dimon chief executive of America’s largest bank, JP Morgan says he expects “a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008.”
Retail Buyers Bought the Dip
In the last two weeks of March, a record of nearly 10 million people filed for unemployment benefits in the US. And the story across the globe is no different, with the countries on lockdown to try and stop the coronavirus spread.
However, the crypto industry has turned out to be an outlier. Exchanges like Kraken, Coinbase, and Binance have been on a hiring spree during this time.
Despite the price of bitcoin and cryptocurrency prices plunging, Kraken is looking to increase its workforce by 10%.
Binance is looking to add UX, UI designers, managers, product designers to its growing business. “Getting used to work from home, but hate your job? Good at what you do and passionate about crypto? You know what to do,” read Binance’s call for new hires.
All these businesses are hiring for remote positions as such not affected by the COVID-19 lockdowns.
The business has actually grown during these turbulent times as we reported, Binance CEO Changpeng Zhao recently shared that the numbers recorded by them are “phenomenal” about 5x the normal volume.
Kraken saw 83% more user sign-ups, Coinbase reported a 2x increase in new user sign-ups while Paxful’s doubled in the week following the violent sell-off.
MEW (MyEtherWallet) also saw its “buy” orders doubling and the amount of ETH purchased jumped 9x over the weekly average.
Institutions want to get in on the action as well
While the retail started buying the dip right after the prices tanked, institutions have started coming back up.
Both CME and Bakkt registered a significant decline in their volume after the sell-off, unlike spot exchanges that saw a huge rise. But volume has started picking up yet again.
On March 31st, Bakkt experienced a trading volume of just above $7 billion that increased to $20 million in April. Open interest also jumped from $4.6 million to $6.5 million.
On CME, March ended with a trading volume of $84 million and open interest of $127 million. On April 2nd, volume spiked to $347 million and open interest to $170 million, as per crypto data provider Skew.
Also, as per analytics platform IntoTheBlock, the volume of large Bitcoin transactions — those with a value over $100,000 has seen an uptick from $3.1 billion on March 29 to $5.65 billion on April 2nd.
Amidst this, as we reported, Galaxy Digital founder and CEO, Mike Novogratz recently shared, “I am seeing investors I never saw before, hedge fund investors, high net worth investors getting into Bitcoin for the first time.”
I haven’t seen this much organic new interest in bitcoin since early 2017 in my non-crypto circles. Got pinged by 3 separate old friends I haven’t spoken to in years about buying their first BTC yesterday.
— Ari Paul ⛓️ (@AriDavidPaul) April 2, 2020
Blockstream CEO Adam Back also reported the same as he said,
“Have referred and helped people buy > $1mil BTC last 2weeks. Good investors too, long term view, cold stored. New buyers mostly, who never dove in before but become interested due to the price window and asset class as an uncorrelated hedge, due uncertain economic backdrop.”
With investors jumping in to bitcoin while the central banks fire up their money printers, Bitcoin might have started to work as a safe haven against the first currency.