Morning Markets: Cryptocurrencies are back on the bounce, and tech IPOs are hot. And it’s nearly time to check in on the global venture world.
The second quarter is racing to a close. Amazingly, we’ll soon dive into July and the third three-month period of the year. That means earnings seasons (good!), summer (good!), and your partner taking you on hikes (bad!).
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But what matters for us this morning is momentum. More simply, in what sort of shape is tech dragging itself across the Q2 finish line?
To my surprise, it feels like the tech world is wrapping the first half of 2019 strongly. Let’s take a peek at some secondary signals that could give us a rough proxy for where tech is heading.
With the quarter nearly over, the Crunchbase News team is prepping our regular set of venture capital reports. We’ll have those turned in and hitting the presses right after the Fourth of July. But that’s to come, today we’re hunting around the edges.
We’re looking at three types of value today. We’ll start with the most exotic, move to the largest in terms of worth, and then examine the highest velocity.
Let’s start with cryptocurrencies. Now, you’ve stopped thinking about them after the great bitcoin crash that started as 2017 came to a close and effectively turned what had been a sure thing into, once again, a joke.
Things then got worse for the world of digital currencies and distributed ledgers as 2018 slumped in 2019. The value of a single bitcoin slipped under $4,000. The situation turned around in April of this year as bitcoin began to rally. And it’s kept going, recently cresting the $9,000 mark. All its friends added in, and the cryptocurrency market is worth just under $288 billion today, according to CoinMarketCap.
That’s up around 2.5x the figure’s lows. Recovery? Dead cat bounce? I don’t know, but watching bitcoin go full Lazarus is not a bearish sign.
Next, the stock market from two angles. First, incumbents. Second, upstarts.
Did you know that Facebook is up around 50 percent from its 52-week lows? Facebook’s lowest point in the last year was $123.02 as 2018 finished. The company’s share price has recovered in 2019, up to over $180 as of the time of writing. Sure, Facebook is still about $40 per share off highs, but the company’s sins have largely been forgiven by the market.
The techlash is more a media and Washington phenomenon than it is Wall Street fear, at least when it comes to the biggest tech shops. Facebook is worth $517 billion. Microsoft is still worth north of $1 trillion. Apple is worth $886.8 billion, Amazon $920.5 billion, and Alphabet $753.4 billion.
So, at the top of the market, everything looks good. Sure, there’s some rustling for a new regulatory regime. But as one party is concerned about phantom bans centered around a caricature of their own political belief, and the other is led by animus for hard-to-regulate platform power, it seems unlikely that the Capitol will be able to get off its own hands and do anything.
The big companies are going to be fine.
From three angles, then, the tech world is chugging along. The old money is doing well. The giants are healthy and fat and rich. The new money is doing well too, with new offerings finding rapturous reception from public investors. And the putatively next money is doing well, too.
It’s a go from all three sides. The money in the middle of the three — venture capital — will give us a final look at the sector’s health. But if we use external signals to guess, I suspect the Q2 venture numbers will be just fine.
Illustration: Li-Anne Dias.