August’s Bitcoin Rally Led to Record Crypto Derivative Volumes
In today’s edition of Overbit News, we jump right into headlines surrounding Bitcoin’s rally in August. According to Coindesk, trading volumes for derivatives in the cryptocurrency market soared to record levels, thanks in large part to Bitcoin’s rise to $12,000. One market data provider, CryptoCompare, stated that crypto derivative volume rose to more than $710 billion in August. This figure is a new all-time high, far surpassing the $602 billion in volume that was recording in May. It seems this massive spike in volume was not limited to derivative products, either. Spot markets also saw a significant rise, hitting nearly $820 billion - nearly double what the figures were in the month before. These rises in volume for both spot markets and derivative markets were also linked to a massive spike in volatility for the cryptocurrency market. One would assume as much - linking volume with volatility - but confirmation in these regards reaffirms the story we’ve been preaching for weeks: investor interest in cryptocurrency markets continues to surge with each passing month.
In our second story of this edition of Overbit News, we try to zoom out and focus on the major underpinning of today’s financial world: the American dollar. Looking back to the end of last week, we can see the US Dollar closed the week gaining against most of its major rivals, despite losing a few points before the weekly close. On a fundamental level, these gains seem to stem from the promising figures being released from the United States government. Although US employment figures were mixed in August, the unemployment rate was quite clear. Unemployment in the US dropped from 10.2% to 8.4%, whilst the Labor Force Participation Rate increased by nearly 60%. With a strong performance from the US labour force, as well as the US dollar, the underlying sentiment seems to be moving towards a “risk-off” market. However, in times like these, good news is never without bad news.
The Global Times recently reported that China may gradually cut its holdings of US Treasury Bonds due to continuing tensions from the two countries. Much of this report is speculation for now, but any news confirming such a move will certainly weigh on the market as the week opens back up. Gold and Oil both closed in the red to end last week, indicating that investors are indeed moving away from the low-risk markets. Downside continuation for either of these markets could signal that this talk from China is nothing more than conjecture, but it is too early to tell. Either way, watching USD’s performance will continue to shed insight into the broader market situation.
Closing out this edition of Overbit News, we’re going to cover precious metals, more specifically XAU/USD (Gold). What we’re continuing to see is a paradigm shift in markets around the world driven by lax monetary policies at central banks. Recently we saw XAU/USD break $2000.00 briefly, before consolidating back in the mid $1900s. This sharp increase in Gold prices from $1400 earlier this year to $2000 is a dramatic move for any asset, but especially for XAU/USD, which has long been considered a relatively stable asset.
With all the market chaos around the world this year, investors flocked into Gold, strengthening its narrative as the ultimate safe-haven asset as it rallied to all-time highs. But, if bad monetary decisions and inflation around the world continue to happen, we could see it breaking a new all-time high in the coming years, and as always, you can trade XAU/USD on Overbit.com.
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