Crypto world shows signs of being rather bullish – TechCrunch

Crypto world shows signs of being rather bullish – TechCrunch

Welcome back to The Exchange. Today we’re doing something fun with crypto.

Sure, we could write more about how insurtech valuations are under fresh pressure after Hippo’s Q2 earnings report — we spoke to the company’s president yesterday; more to come — or the latest stock market movements in China. There are big rounds worth considering as well. Roblox reported earnings this week. And Monday.com’s earnings pushed its shares sharply higher yesterday. There’s lots of interesting news to chew on.

But instead of all that, we’re digging back into crypto. Why? Because there are some rather bullish trends that indicate the world of blockchain is maturing and creating a raft of winning players

The Exchange explores startups, markets and money.

Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.

Writing about crypto is always a little risky. Cybersecurity folks will complain that we’re abusing the phrase crypto, despite the fact that language always evolves. And Bitcoin maximalists aren’t going to find much below that underscores their core thesis that every coin not mentioned in Satoshi’s whitepaper is, in fact, a scam. Save your tweets, please.

But if you care more generally about the larger global cryptoeconomy, it’s time to imbibe some good news. Our goal is to highlight a few recent trends and then talk a little about what we might see coming from startups.

Sound good? Let’s get busy.

Encouraging news from your local distributed ledger

The Exchange finds rising NFT volumes bullish, and we have a new thesis for what the value proposition is for such digital assets. The rising tide of mega-rounds for crypto exchanges belies not only the worldwide demand for access to crypto, but also sets the stage for a global cohort of stable, well-funded and trustworthy on-ramps to the crypto world — and, of course, more exchanges imply lower fees over time.

Non-exchange crypto fees are also bullish. And then there’s a wrinkle to the stablecoin game and what sort of economics things like USDC may command in time. We have notes from an interview with Circle to help us there.

NFTs and the concept of joy

I don’t think anyone actually understands what the metaverse is. But the possibility that, in time, unique assets on particular chains — NFTs — will have a part to play in larger digital worlds seems like a reasonable conjecture. One can easily imagine life, as we all become Increasingly Online, leaning on human desires for scarcity as a method of showing status. NFTs will help meet that demand in certain digital ecosystems. Games, probably, though what we consider a game will also evolve as VR becomes more mainstream.

But that future is not here yet. So, what value are NFTs providing today that makes them potentially worthwhile? Joy.

Global wheat stocks-to-use ratio supports bullish prices outlook

The U.S. Department of Agriculture’s August 2021 World Supply & Demand Estimates report trimmed expected global wheat production, reduced the global wheat stocks-to-use ratio and created a supply shock market rally. USDA dropped total production to 777 million metric tons (MMT), 15.4 MMT less than its July forecast, citing major weather problems in Russia, Canada and the United States. Global wheat use forecast for 2021/22 is 787 MMT.

Wheat supply is of course a major variable in global price discovery and is related to the “stocks-to-use” ratio, representing the level of carryover stocks as a percentage of the total demand or use. These new USDA estimates reduced the global stocks-to-use forecast to 35%, which, if realized will be its lowest since 2016/17. If China’s massive wheat stocks are removed from the calculation (China exports very little wheat), the stocks-to-use estimate is 21.6%.

Global wheat stocks-to-use percentage has declined after an eight-year run-up. Source: USDA August 2021 WASDE and USW Supply and Demand Report

Guy Allen, senior economist at IGP Institute at Kansas State University, points out that an important consideration when looking at the wheat stocks-to-use ratio is to compare the ratio to corn as well. While wheat is primarily a food grain, it can compete with feed grains given relative prices or regional shortages. The current global stocks-to-use ratio forecast for corn is 24%, also lower than its ratio the past few years.

SUPPLY SHOCK SOURCE

How did the world get to this point? Global use continues to set records each year and ending stocks declined in 2020/21 and again this marketing year. It is major exporting countries taking the supply hit this year. In fact, Stratégie Grains, a French grains analyst, said that the stocks-to-use ratio for major exporting countries could fall to its second-lowest level on record after 2012/13.

USDA slashed Russia’s production forecast 12.5 MMT to 72.5 MMT. The Russian statistical agency, Rosstat, reduced the number of winter wheat acres harvested while the Ministry of Agriculture reported lower yields. In Canada, the Prairie Provinces saw production decline after persistent drought slashed yields by 24% compared to the five-year average. USDA reduced its Canadian production forecast by 32% compared to 2020/21 to 24.0 MMT. If realized, it will be the smallest Canadian wheat crop since 2010/11.

U.S. WHEAT BALANCE SHEET

USDA also lowered U.S. production 7% compared to last year as drought has affected several wheat-growing areas including the Northern Plains states and the Pacific Northwest. The total stocks-to-use ratio in the U.S. is forecast at 30% for 2021/22, down 10% from 2020/21’s total stocks-to-use ratio of 40%. This is not surprising considering that all wheat classes started with lower beginning stocks in 2021/22 and of the five wheat classes tracked by the USDA in its monthly report all wheat classes except for hard red winter (HRW) and soft red winter (SRW) are expected to have lower ending stocks. Even with the higher production in HRW and SRW, the stocks-to-use ratio is forecast lower for all wheat classes in 2021/22. U.S. white wheat, primarily soft white grown in the Pacific Northwest is the most affected with 16% stocks-to-use compared to 21% last year.

USDA now expects the 2021/22 stocks-to-use ratio for each major U.S. wheat class to decline. Source: USDA August 2021 WASDE and USW Supply and Demand Report

With harvest well underway for many classes (HRS, S.W.) and complete for HRW and SRW the market is getting a better indication of how accurate the USDA’s production number is. The September WASDE report will account for more known production in the United States and other major exporting countries. USDA will also publish its quarterly Grain Stocks report at the end of September that will also add to our understanding of how much wheat is available.

AMD Stock Pulls Back Into Bullish Pattern, Options Traders Bet On Bull Run

Pete Najarian noticed unusual options activity in Advanced Micro Devices, Inc. (NASDAQ: AMD) for this week’s $117-strike calls on Friday. On Wednesday, institutions continued to hammer call contracts of AMD despite the stock trading lower.

WCCF Tech reported AMD will become the Taiwan Semiconductor Manufacturing Co. Ltd.’s (NYSE: TSM) largest customer and there is a rumor TSMC may provide the chips needed for the Apple Inc (NASDAQ: AAPL) electric vehicle.

Immediately following the report AMD shot up over 1% higher before, giving all the gains back and trading toward its daily low.

Options traders weren’t deterred by the stock’s overall negative reaction to the news and continued to purchase bullish call contracts. Over the course of the day, traders bet more than $1.61 million AMD will see higher prices in the future.

The options traders may not care about the news and instead could be betting AMD will make a technical break up to a new all-time high.

AMD is trading in a bull flag pattern on the daily chart with the pole created between July 28 and Aug. 4 and a flag between Aug. 5 and Wednesday.

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays the market price for the call or put option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

See also: HOW TO BUY ADVANCED MICRO DEVICES (AMD) STOCK

The AMD Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:

At 10:03 a.m., a trader executed a call sweep near the ask of 1000 Advanced Micro Devices options with a strike price of $115 expiring on Aug. 27. The trade represented a $71,000 bullish bet for which the trader paid 71 cents per option contract.

At 10:09 a.m., a trader executed a call sweep near the ask of 245 Advanced Micro Devices options with a strike price of $106 expiring on Aug. 20. The trade represented a $45,325 bullish bet for which the trader paid $1.85 per option contract.

At 10:10 a.m., a trader executed a call sweep at the ask of 200 Advanced Micro Devices options with a strike price of $106 expiring on Aug. 20. The trade represented a $37,400 bullish bet for which the trader paid $1.87 per option contract.

At 11:29 a.m., a trader executed a call sweep at the ask of 200 Advanced Micro Devices options with a strike price of $106 expiring on Aug. 20. The trade represented a $28,800 bullish bet for which the trader paid $1.44 per option contract.

At 10:18 a.m., a trader executed a call sweep above the ask of 303 Advanced Micro Devices options with a strike price of $106 expiring on Aug. 20. The trade represented a $54,237 bullish bet for which the trader paid $1.79 per option contract.

At 10:30 a.m., a trader executed a call sweep at the ask of 200 Advanced Micro Devices options with a strike price of $105 expiring on Aug. 20. The trade represented a $46,000 bullish bet for which the trader paid $2.30 per option contract.

At 10:37 a.m., a trader executed a call sweep near the ask of 1167 Advanced Micro Devices options with a strike price of $110 expiring on Aug. 20. The trade represented a $56,016 bullish bet for which the trader paid 48 cents per option contract.

At 11:27 a.m., a trader executed a call sweep at the ask of 200 Advanced Micro Devices options with a strike price of $105 expiring on Aug. 20. The trade represented a $40,200 bullish bet for which the trader paid $2.01 per option contract.

At 11:30 a.m., a trader executed a call sweep at the ask of 481 Advanced Micro Devices options with a strike price of $150 expiring on Nov. 19. The trade represented a $96,681 bullish bet for which the trader paid $1.34 per option contract.

At 11:32 a.m., a trader executed a call sweep at the ask of 581 Advanced Micro Devices options with a strike price of $150 expiring on Nov. 19. The trade represented a $79,016 bullish bet for which the trader paid $1.36 per option contract.

At 11:32 a.m., a trader executed a call sweep at the ask of 329 Advanced Micro Devices options with a strike price of $150 expiring on Nov. 19. The trade represented a $44,744 bullish bet for which the trader paid $1.36 per option contract.

At 12 p.m., a trader executed a call sweep at the ask of 300 Advanced Micro Devices options with a strike price of $120 expiring on Sept. 17. The trade represented a $39,300 bullish bet for which the trader paid $1.31 per option contract.

At 12:16 p.m., a trader executed a call sweep at the ask of 1,200 Advanced Micro Devices options with a strike price of $102 expiring on Aug. 20. The trade represented a $372,000 bullish bet for which the trader paid $3.10 per option contract.

At 12:27 p.m., a trader executed a call sweep at the ask of 258 Advanced Micro Devices options with a strike price of $106 expiring on Aug. 20. The trade represented a $37,926 bullish bet for which the trader paid $1.47 per option contract.

At 12:28 p.m., a trader executed a call sweep at the ask of 253 Advanced Micro Devices options with a strike price of $106 expiring on Aug. 20. The trade represented a $39,721 bullish bet for which the trader paid $1.57 per option contract.

At 12:28 p.m., a trader executed a call sweep at the ask of 215 Advanced Micro Devices options with a strike price of $105 expiring on Aug. 20. The trade represented a $44,290 bullish bet for which the trader paid $2.06 per option contract.

At 12:28 p.m., a trader executed a call sweep at the ask of 441 Advanced Micro Devices options with a strike price of $110 expiring on Sept. 3. The trade represented a $102,753 bullish bet for which the trader paid $2.33 per option contract.

At 12:28 p.m., a trader executed a call sweep at the ask of 218 Advanced Micro Devices options with a strike price of $106 expiring on Aug. 20. The trade represented a $35,752 bullish bet for which the trader paid $1.64 per option contract.

At 12:28 p.m., a trader executed a call sweep at the ask of 505 Advanced Micro Devices options with a strike price of $109 expiring on Aug. 20. The trade represented a $37,370 bullish bet for which the trader paid 74 cents per option contract.

At 12:29 p.m., a trader executed a call sweep at the ask of 210 Advanced Micro Devices options with a strike price of $107 expiring on Aug. 20. The trade represented a $27,300 bullish bet for which the trader paid $1.30 per option contract.

At 12:29 p.m., a trader executed a call sweep at the ask of 200 Advanced Micro Devices options with a strike price of $110 expiring on Aug. 27. The trade represented a $31,400 bullish bet for which the trader paid $1.57 per option contract.

At 12:30 p.m., a trader executed a call sweep at the ask of 310 Advanced Micro Devices options with a strike price of $108 expiring on Aug. 20. The trade represented a $35,030 bullish bet for which the trader paid $1.13 per option contract.

At 12:30 p.m., a trader executed a call sweep at the ask of 490 Advanced Micro Devices options with a strike price of $115 expiring on Oct. 15. The trade represented a $210,700 bullish bet for which the trader paid $4.30 per option contract.

AMD Price Action: Advanced Micro Devices shares were trading down 3.83% at $103.44 at market close Wednesday.

Story continues

See more from Benzinga

© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.