🌳 Apple Announces Largest Ever $110B Stock Buyback Plan; Block Inc. To Purchase Bitcoin With 10% Of Bitcoin Products Profit

GM Treehouser 🌳

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Our Daily View

What We Are Covering Today

• Apple announces largest ever stock buyback plan; Oil prices set for largest weekly drop since February (More in Macro & TradFi)
• Jack Dorsey’s Block to purchase Bitcoin every month with 10% of Bitcoin profit; MoonPay expands crypto options with PayPal integration (More in DeFi & CeFi)
• Bitcoin market consolidates at lower levels; ETF record outflows signal shifting investor sentiment and caution (More in On-Chain)
• Derivatives market shows increasingly bullish sentiment after Blackrock’s statement on Pension and Sovereign Wealth Funds entering BTC Spot ETFs (More in Crypto Derivatives)
• BTC hovers below the resistance level; ETH successfully retests the crucial $3K level (More in Crypto Technical Analysis)

Macro & TradFi

Apple's shares rose following a better-than-expected quarterly revenue report of $90.75 billion, slightly down from last year but surpassing estimates, bolstered by resilient sales and a promising outlook despite challenges, including a downturn in China and the broader market. The company also announced a $110 billion share buyback and dividend increase, signaling confidence in future growth driven by new product launches and AI innovations amidst regulatory pressures and competitive market dynamics.

Meanwhile, oil prices are poised for their largest weekly decline since February, influenced by weakening demand and anticipation that OPEC+ may extend its production cuts. Brent crude is trading below $84 per barrel, reflecting a weekly loss exceeding 6%, while West Texas Intermediate hovers around $79 per barrel. This downturn is compounded by recent geopolitical tensions and a surprising increase in U.S. crude inventories, which have heightened concerns about global oil demand, particularly from China, and the performance of fuel markets like diesel and gasoline. Market analysts largely expect OPEC+ to maintain its restrictive output policies during their upcoming meeting on June 1, as easing these measures could risk pushing the oil market back into surplus amidst slowing demand.

U.S. stock indices ended Thursday’s trading session higher, reflecting optimism in the financial markets. The Dow Jones Industrial Average rose 0.85%, the S&P 500 increased by 0.91%, and the Nasdaq Composite gained significantly by 1.51%. The upbeat sentiment was largely driven by Qualcomm’s strong quarterly performance, which saw its stock surge by 9.8% due to higher-than-expected sales and profits, particularly boosting the tech sector. Carvana's stock jumped 33.8% following an optimistic profit forecast, contrasting sharply with DoorDash, which saw its shares tumble by 10.3% due to disappointing profit guidance. The Yen rallied to its strongest level in over 2 weeks around 152.91, as Treasury yields fell yesterday following 2 suspected interventions this week by Japanese officials to support the currency. Amidst these varied performances, investors will be looking out for Nonfarm Payrolls, Average Hourly Earnings, and Unemployment Rate data due tonight at 20:30 SGT.

CeFi & DeFi

• Jack Dorsey’s Block to purchase Bitcoin every month with 10% of Bitcoin profit
• MoonPay expands crypto options with PayPal integration
• Terraform claims SEC offered ‘no evidence’ for $4.7B in disgorgement
• Chainalysis will help Tether monitor the secondary market for illicit activity

Jack Dorsey, co-founder of Block, Inc., announced a Bitcoin purchase plan to the company's shareholders. He plans to allocate 10% of the gross profit generated from their Bitcoin products to purchase Bitcoin every month, rationalizing it as an 'investment in a future where economic empowerment is the norm'. Block's earnings report revealed that its Bitcoin gross profit from Cash App sales for Q1 2024 surged nearly 60% year-over-year, reaching $80.1M. This growth suggests an increase in customer demand for Bitcoin through Cash App. Based on this information and the current price of Bitcoin around $59.2K, the $80.1M profit could theoretically be used to acquire roughly 1,350 BTC. Announcing their plan towards building a “full Bitcoin mining system”, Block’s services could help drive the adoption of Digital Assets and provide consistent buying pressure of Bitcoin with their purchase plan.

In other news, cryptocurrency infrastructure firm Moonpay continues to expand the options to transact with crypto by integrating PayPal transactions, enabling Moonpay users in the US to buy and sell 110 different cryptocurrencies using PayPal transfers via wallet, bank transfers, or debit cards. Compared to other platforms that limit users to buying only Ethereum or PayPal USD stablecoin, Moonpay claims to be the first on-ramp and off-ramp provider to integrate PayPal to offer this superior experience. With a user base of over 20 million verified users, PayPal integration will commence with MoonPay’s direct-to-consumer products but will later be extended to their partners. MoonPay will implement the integration in phases. Initially, it will be accessible to fifty percent (50%) of its customer base. Subsequently, the company plans for a broader rollout encompassing additional jurisdictions within the United Kingdom and the European Union. This allows for greater accessibility to fiat and Digital Assets for traders and investors, reducing the barrier to entry.

On-Chain

Glassnode's report reveals that the Bitcoin market has been consolidating around the lower $60K range since peaking at $73K in mid-March, suggesting a tendency towards distribution rather than accumulation. This assessment follows an examination of investor behavior utilizing the Accumulation Trend Score, a metric that gauges investor influence on price movements post-FTX crash. The analysis, incorporating a detailed evaluation by wallet size, identifies a noticeable rise in net outflows for all categories in April, indicating strong sell-side pressure. Despite the consolidation, the presence of "Bull Local Distribution" in their charts—periods of selling within a generally bullish market—points to potentially positive long-term market prospects.

On May 1, 2024, Bitcoin ETFs tracked by Spotonchain recorded their largest single-day net outflow, totaling $564 million. This affected all 10 funds, including the BlackRock iShares Bitcoin Trust ($IBIT), which experienced its first ever outflow. This substantial withdrawal contributed to a six-day streak of negative net inflows—the longest recorded—and was a primary factor in Bitcoin's price drop to $57K that day. Therefore, the movements of the ETFs significantly impacted Bitcoin's price volatility.

Crypto Derivatives

• Funding rates remained positive for BTC and ETH.
• Deribit Implied Volatility Index (DVOL) for BTC and ETH dropped to 56.76% and 64.30%, respectively.
• The 30-day 25-delta skew (C-P) for BTC and ETH rose to -1.94% and -7.09%, respectively.
• The futures market witnessed $121.30M in liquidations, with longs representing 50% of the total.

Top 3 USDT Perpetual Funding Rate Arbitrage Opportunities

The ATM implied volatility (IV) has sustained its downward trajectory as the market gradually rebounds from the recent sell-off. Presently, both the 7-day and 30-day IVs are approaching the monthly low, signaling a heightened certainty in the crypto major's future price potential.

BTC's term structure corroborates this trend, with marked IVs decreasing across the curve. The decline is particularly noticeable in the longer-dated options, possibly influenced by Blackrock’s statement indicating potential interest from Sovereign Wealth Funds and Pension Funds in BTC ETFs.

BTC C-P skews have also witnessed an uptick in both the 7-day and 30-day skews, with the 30-day skews nearly returning to neutral territory from a put premium. This suggests that the bearish sentiments prevailing in the market over the last few days are diminishing, with investors anticipating an increasingly bullish trend in the near future.

Lastly, @Paradigm reported an upward trend in the US and EU trading hours. Notable BTC trades include the sale of 150x  +1.00 28-Mar-25  70K Call/-2.00 27-Sep-24  100K Call custom BTC structure and 100x  27-Sep-24  110K Put. On the ETH side, we have seen the purchase of 4800x 17-May-24 3.3K/24-May-24 3.3K Call Calendar and 4175x 17-May-24 3.15K/24-May-24 3.2K.

Crypto Technical Analysis

Moving on to Technical Analysis, BTC’s price is hovering below the resistance level of $59.8K, with BTC currently trading around $59.3K. If BTC price were to break past this resistance level, it could face subsequent resistance at the $66.5K level, a 12.1% increase from current levels. Should BTC price decline further, the next significant support level is at $52.4K, representing a potential drawdown of 11.6%. The RSI is positioned at 42, showing a slight uptrend in momentum but still under the midpoint of 50, which traditionally suggests a bearish sentiment.

On the other hand, ETH successfully retested the crucial $3K level. Observing the price behavior, Ethereum has rebounded modestly from this area, indicating a potential stabilization after previous declines. Should Ethereum manage to sustain above $3K, it could pave the way for an attempt to retest the upper resistance at approximately $3.2K. This resistance zone has historically acted as a significant barrier, halting previous upward movements. Conversely, if the $3K support fails, there's an evident downside risk with the next major support level positioned around $2.8K, implying a potential decline of around 7% from the current price levels. RSI stands at 39, which underscores a bearish sentiment but also hints at a possible relief from oversold conditions if the index rises above the 40-50 range, suggesting an increasing bullish momentum.

Access institutional-grade commentary on TradFi × Crypto markets

By Treehouse Research

Daily Readings

TradFi

• Apple announces largest-ever $110 billion share buyback as iPhone sales drop 10%.

• Powell Keeps Rate Cuts on Table But Leaves Timing Less Certain

• Hamas leader says examining Gaza ceasefire proposal in ‘positive spirit’

• China has a 'fake gold' problem — locals are getting scammed into buying artificial jewelry.

• A Trump SEC would aim to reverse climate rule and revive ESG fight, sources say

• Democratic senator aims at Amazon labor practices with first federal bill regulating quotas

• Sony, Apollo express interest in $26 billion Paramount buyout amid Skydance bid

• FTC accuses ex-Pioneer CEO of colluding with OPEC, blocks him from Exxon board

• Gazprom plunges to worst loss in decades as sales to Europe collapse

• SocGen trader fired for ‘unauthorised’ bets blames ‘risk team and bosses’

• US Labor Costs Rise by Most in a Year as Productivity Cools

• Canada Unexpectedly Flips to Deepest Trade Deficit Since June

• Hong Kong launches insider trading prosecution of Segantii Capital

• Point72’s Drossos Says Japan Disrupting One-Way Bets Against Yen

• Microsoft pours $2.2B into Malaysia for cloud, AI expansion

Crypto

• Eigen Foundation to distribute extra $1,000 in EIGEN to token holders, following airdrop backlash

• Crypto-friendly Reps. Nickel and Flood urge SEC to give the green light to options on spot bitcoin ETFs

• Jack Dorsey’s Block to use 10% of Bitcoin profit to buy BTC every month

• Terraform claims SEC offered ‘no evidence’ for $4.7B in disgorgement

• Coinbase posts $1.2B net income in Q1, surpasses entire 2023 earnings

• Chainalysis will help Tether monitor secondary market for illicit activity

• Pantera invests in TON with high expectations for Telegram’s future

• World’s first meme summit launches to great success in Dubai during Token2049 week

• MoonPay expands crypto options with PayPal integration

• Stacks active accounts reach record high amid growing interest in Bitcoin DeFi

• Friend​.tech v2 airdrop could introduce nontransferable token

• Hundred Finance hacker moves stolen assets a year after $7M exploit

• ZkSNACKs to sunset coinjoin anonymizing service amid US coin mixer crackdown

• Synethix founder Kain Warwick targets mid-May launch for Infinex DEX

• Polyhedra Network Breaks Zero-Knowledge Proof Speed Record with New Open-Source Prover

• BlackRock Sees Sovereign Wealth Funds, Pensions Coming to Bitcoin ETFs

Deal Flow

• Paragraph raises $5 million from USV and Coinbase Ventures, takes over web3 blogging platform Mirror

Yours sincerely,
Treehouse Research 🌳