Month: May 2022

The Galileo Mining Ltd (ASX: GAL) share price fell heavily in early morning trade, reaching an intraday low of 52 cents — down 18.75% on yesterday’s close — shortly after the open.

The ASX mining share has since recovered and is now up 2.36% to 65 cents at lunchtime.

There’s been no price-sensitive news out of Galileo’s camp today. However, its share price is coming off a near-220% gain in yesterday’s session.

What’s up with the Galileo Mining share price?

ASX investors rallied behind Galileo yesterday following the release of a company announcement.

The company announced it had intersected significant palladium, platinum, copper, gold, and nickel mineralisations at its 100%-owned Norseman project in WA.

The project contains “278km2 of prospective ground at the southern end of the prolific Norseman-Wiluna greenstone belt”. The tenements are reportedly prospective for several minerals such as nickel sulphide, gold, lithium, and nickel-cobalt.

As we reported yesterday: “The 33 metre intersection is within a broader 55 metre disseminated sulphide zone. Galileo said this shows the potential for a large mineralised system.”

Meanwhile, the company mentioned that it remains fully funded with $8.2 million available for this quarter in order to “continue aggressive exploration programs at all [its] projects”.

The Galileo Mining share price exploded on the news, hitting an all-time high of 66 cents. It closed the session at 63.5 cents.

Trading volume was extremely high yesterday and that momentum has continued today. At the time of writing, the number of Galileo shares already swapped today is 196% of Galileo’s four-week average.

The company followed up today with an investor presentation and webinar. They outline the value proposition and investment opportunity of the discovery, in addition to news on other joint ventures and assets.

Specifically, Galileo Mining mentioned it is a “[w]ell funded and supported junior exploration company …[with] highly prospective Norseman & Fraser Range projects … “.

Galileo Mining share price snapshot

In the past 12 months, the Galileo Mining share price has soared by more than 150%. It is up 185% for the year to date.

The post Why did the Galileo Mining share price tumble 18% in early trading on Thursday? appeared first on The Motley Fool Australia.

More reading

• Galileo Mining share price explodes 150% on major discovery

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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At lunch on Thursday, the S&P/ASX 200 Index (ASX: XJO) has followed Wall Street’s lead and tumbled lower. The benchmark index is currently down 0.75% to 7,010.7 points.

Here’s what is happening on the ASX 200 today:

CBA Q3 update impresses

The Commonwealth Bank of Australia (ASX: CBA) share price is pushing higher today. This follows the release of a third-quarter update that came in ahead of expectations. For the three months ended 31 March, compared to the quarterly average during the first half, CBA reported a 1% decline in operating income to $6,103 million and flat cash earnings of $2,400 million. The latter was 6% ahead of the Citi’s expectations and 9% ahead of the analyst consensus estimate.

Xero full-year results disappoint

The Xero Limited (ASX: XRO) share price has crashed to a new 52-week low on Thursday after the cloud accounting platform provider’s full-year results disappointed. Xero reported a 29% increase in revenue to NZ$1.1 billion and an 11% lift in earnings before interest, tax, depreciation and amortisation (EBITDA) to NZ$212.7 million. This was underpinned by a 19% increase in total subscribers to 3.3 million. However, according to Goldman Sachs, Xero’s missed on revenue, EBITDA, and subs growth.

Tech shares pummelled

The main drag on the ASX 200 on Thursday has been the tech sector. A selloff on the tech-focused Nasdaq index on Wednesday night has led to the S&P/ASX All Technology Index falling 5.2% today. Among the worst performers are Xero and Block Inc (ASX: SQ2). The latter is down 15% following a similar sharp decline by its NYSE listed shares on Wall Street overnight.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Thursday has been the Orica Ltd (ASX: ORI) share price with a 7% gain. This follows the release of the commercial explosives company’s half-year results. Going the other way, the Block share price is the worst performer with a 15% decline.

The post ASX 200 midday update: CBA’s Q3 update impresses, Xero and Block crash appeared first on The Motley Fool Australia.

More reading

• CBA share price pushes higher on consensus-beating quarterly update
• Zip share price tumbles 5% to another multi-year low
• How much further can ASX 200 tech shares tumble? Macquarie weighs in
• Xero share price sinks 10% to 52-week low following FY22 results miss
• Orica share price spikes amid 25% jump in sales revenue

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. and Xero. The Motley Fool Australia has positions in and has recommended Block, Inc. and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Rhythm Biosciences Ltd (ASX: RHY) share price is on a rollercoaster ride today following the company’s latest release.

It surged 11.57% at market open today before falling to $1.18 — 2.5% lower than its previous close. However, the medical device company’s shares have since bounced back and are now swapping hands for $1.27 — a 4.96% gain on the day.

For context, the All Ordinaries Index (ASX: XAO) is currently down 0.84%.

What did Rhythm announce?

The Rhythm Biosciences share price is bouncing around today after the company advised it has filed with the Australian Therapeutic Goods Administration (TGA) for the listing of ColoSTAT on the Australian Register of Therapeutic Goods (ARTG).

An experimental test kit, ColoSTAT is being developed as a low-cost, easy-to-use blood test to detect colorectal cancer.

The regulatory milestone would pave the way for the company to market and sell ColoSTAT within Australia.

Rhythm noted that the lifesaving cancer detection technology can potentially make a meaningful difference to millions of people around the world. 

With filing now completed, the TGA will assess Rhythm’s ARTG listing submission and hopefully provide final approval to begin commercial activities.

The company anticipates the review process will be finalised within the next three to six months.

In the interim, Rhythm is focusing on executing across a number of key technical, administrative, and logistical activities for ColoSTAT. This includes supporting the pathway to market entry, both domestically and internationally, later this year.

Commenting on the news that appears to be driving the Rhythm Biosciences share price today, CEO and managing director Glenn Gilbert said:

This is an exciting time for all Rhythm stakeholders and indeed global cancer diagnostics markets. The team continues to diligently execute on our plans as we target ColoSTAT revenues in late CY22.

We are very close to being in a unique position to transform and revolutionise the colorectal diagnostics market with our lifesaving cancer detection technology.

Rhythm Biosciences share price snapshot

The Rhythm Biosciences share price has accelerated by 46% in the past 12 months, reflecting positive investor sentiment. The company’s shares reached an all-time high of $2.08 in November, before treading lower.

At today’s prices, Rhythm presides a market capitalisation of roughly $256.89 million, with approximately 214.08 million shares on issue.

The post Rhythm Biosciences share price lifts 5% on TGA news appeared first on The Motley Fool Australia.

More reading

• CBA share price pushes higher on consensus-beating quarterly update
• Own APA shares? Here’s the latest on the company’s ‘ground breaking’ green hydrogen project
• CSL share price cracks under Vifor Pharma acquisition delay
• Bitcoin price plunges below US$30,000. What’s going on?
• Zip share price tumbles 5% to another multi-year low

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Commonwealth Bank of Australia (ASX: CBA) share price is rising on Thursday.

In morning trade, the banking giant’s shares are up 0.7% to $102.19.

This compares favourably to a decline of 0.8% by the ASX 200 index.

Why is the CBA share price rising?

Investors have been bidding the CBA share price higher today after responding positively to the bank’s third-quarter update.

For the three months ended 31 March, compared to the quarterly average during the first half, Australia’s largest bank reported a 1% decline in operating income to $6,103 million and flat cash earnings of $2,400 million.

This reflects 3% volume growth and higher non-interest income, which helped offset continued margin pressure from elevated swap rates, mix effects, and competition.

How does this compare to expectations?

As you might have guessed with the CBA share price outperformance today, this result was better than the market was expecting.

For example, the team at Goldman Sachs note that the bank’s quarterly cash earnings are run rating 10% ahead of its second half forecasts. It said:

Cash profit from continuing operations in 3Q22 of c.A$2.4 bn was flat on the 1H22 quarterly average but run-rating c.10% ahead of what is implied by our 2H22E forecasts.

And while the broker acknowledges that a bad and doubtful debts (BDDs) benefit helped drive the stronger than expected result, it highlights that its pre-provisioning operating profit (PPOP) was still ahead of expectations. Goldman said:

The better-than-expected cash earnings result was largely due to lower-than-expected BDDs (benefit of A$48 mn), but PPOP was also run-rating c.4% above our implied 2H22E forecasts on better performance on costs (NIMs and revenues largely in line with GSe).

CBA smashes consensus estimates

CBA also outperformed Citi’s estimates, which were already sitting 3% ahead of consensus forecasts. The bank’s cash profit was 6% ahead of the broker’s expectations and 9% ahead of the analyst consensus estimate.

Another positive was CBA’s net interest margin (NIM). While the bank didn’t reveal what its NIM was, Goldman Sachs estimates that it was 1.87%. Although this is down from 1.92% during the first half, it is ahead of Goldman’s second half estimate of 1.86%.

All in all, CBA has been given the tick of approval for its third quarter. However, at this stage, both Citi and Goldman don’t see enough value in the CBA share price to recommend it as a buy.

They continue with their sell ratings. Though, that could change once they have updated their financial models.

The post CBA share price pushes higher on consensus-beating quarterly update appeared first on The Motley Fool Australia.

More reading

• CBA share price on watch following $2.4bn Q3 cash profit
• 5 things to watch on the ASX 200 on Thursday
• Why is the CBA share price outpacing the ASX 200 in 2022?
• What’s the outlook for ASX 200 bank shares amid rising interest rates?
• Is it too late to buy big bank ASX shares?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Owners of APA Group (ASX: APA) shares rejoice! The company’s plan to convert a gas pipeline into a green hydrogen transmission network has received a new breath of life.

APA has partnered with Wesfarmers Ltd (ASX: WES)’s Wesfarmers Chemicals, Energy, and Fertilisers (WesCEF). The pair are exploring the possibility of using APA’s Parmelia Gas Pipeline to supply renewable hydrogen to WesCEF’s production facilities.

At the time of writing, the APA share price is $11.12, 0.09% lower than its previous close. For context, the S&P/ASX 200 Index (ASX: XJO) has slipped 0.79%.

Let’s take a closer look at the latest green hydrogen news from the ASX 200 gas pipeline operator.

APA’s latest step towards green hydrogen

APA announced it had entered a memorandum of understanding with WesCEF last week. The pair will work together to conduct a pre-feasibility study into producing and transporting the zero-carbon energy source via a section of the Parmelia Gas Pipeline.

The ASX 200 giants will jointly fund the study. If it’s successful, green hydrogen could help produce green ammonia and other sustainable chemicals.

APA previously found a 43-kilometre section of the pipeline can house 100% hydrogen without reducing its operating pressure.

“We are pleased to be working with WesCEF in this ground breaking project,” APA CEO and managing director Rob Wheals said.

“This study could be a game-changer for the transportation of green hydrogen by supporting Australia’s first potential conversion of a natural gas transmission pipeline to 100% hydrogen-ready.”

Wheals continued:

Hydrogen won’t be delivered at scale through trucks and trains – we will need large scale interconnected networks which can bring the benefit of resources to our industry hubs, cities and homes …

Existing gas infrastructure is not just essential to powering the nation today, but it will also be essential to the delivery of clean molecules which are likely to be critical additions to our future energy mix.

APA will continue with its second phase of pressurised hydrogen testing over the coming year.

APA share price snapshot

This year so far has been a good one for the APA share price. It has gained 9% since the start of 2022. Meanwhile, the ASX 200 has slipped 7.6%.

The stock has also risen 15% over the past 12 months while the index has traded relatively flat.

The post Own APA shares? Here’s the latest on the company’s ‘ground breaking’ green hydrogen project appeared first on The Motley Fool Australia.

More reading

• 2 ASX dividend shares that keep giving investors pay rises
• Here’s why the APA share price is in the green today
• How big is the APA dividend yield going to be in 2022?
• Own the Vanguard Australian Shares High Yield ETF? Here’s what you’re invested in
• 3 ASX companies that can raise prices whenever they want

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended APA Group and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The CSL Limited (ASX: CSL) share price is being bled on Thursday amid delays to its big A$17.2 billion Vifor acquisition.

Shares in Australia’s third-largest listed company are coming under pressure as investors absorb the latest information.

At the time of writing, CSL shares are trading 2% lower at $270.63 apiece. For context, the S&P/ASX 200 Index (ASX: XJO) is off the mark by 0.79% this morning.

Slower than first thought

When initially announced to shareholders in December last year, CSL expected the acquisition of Swiss therapeutics giant, Vifor Pharma, to be completed by June. However, as per today’s announcement, this has fallen off track — pressuring the CSL share price.

According to the release, the original completion date will be pushed back due to the regulatory approval process. While no specific details were shared, the biotech behemoth now expects the process will take a few more months.

In the Vifor Pharma acquisition presentation provided in December, CSL outlined ‘completion risk’ as a key risk. This is where the company noted the deal requires foreign direct investment and other regulatory filings and approvals in certain key jurisdictions.

It appears some investors are cautious of the deal falling through. In turn, the CSL share price is weakening on the news today.

However, today CSL mentioned it remains confident in the deal being done.

CSL remains confident of completing its acquisition of Vifor Pharma AG and looks forward to expanding its presence in the rapidly growing nephrology market, as well as leveraging the companies’ combined expertise to continue to deliver innovative solutions to rare and serious illness.

How has the CSL share price fared?

While the CSL share price has held up much better than some of its healthcare peers, the returns so far this year aren’t exactly astounding.

Since the beginning of 2022, CSL shares have tumbled 8.5%. Although, this is far better than the 40% fall exhibited by Fisher & Paykel Healthcare Corp Ltd (ASX: FPH). Likewise, it is a welcomed return compared to the 20% dent to Ansell Limited (ASX: ANN).

The post CSL share price cracks under Vifor Pharma acquisition delay appeared first on The Motley Fool Australia.

More reading

• Why CSL, Dicker Data, Lifestyle Communities, and Money3 shares are rising today
• What is driving the CSL share price higher today?
• 2 ASX shares at ‘appealing’ buy prices right now
• How did the CSL share price escape the carnage today?
• Macquarie picks ASX 200 shares to buy in this volatile environment

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. The Motley Fool Australia has recommended Ansell Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Bitcoin (CRYPTO: BTC) price has fallen below the key psychological level of US$30,00.

At the time of writing Bitcoin is trading for US$29,830, down 4.8% since this time yesterday. Over the past 24 hours, the token traded as low as US$28,170, according to data from CoinMarketCap.

That puts the world’s top crypto by market cap down 25% over the past week and down 40% year-to-date. Crypto investors who bought at the record high Bitcoin price on 10 November will be nursing losses of 57%.

Why are cryptos selling off?

Ordinarily, it’s the Bitcoin price that sets the tone in crypto markets, with most altcoins following in their big siblings’ virtual footsteps.

But that doesn’t appear to be the case with the latest round of selling.

Much of the pressure facing the Bitcoin price looks to be connected to the woes plaguing TerraUSD (CRYPTO: UST). (Details here.)

UST, as you may be aware, is intended to be pegged to the US dollar. But last night the stablecoin was anything by stable, plunging from its intended peg of US$1 to 30 US cents.

That in turn saw Terra (CRYPTO: LUNA) fall by a gut wrenching 97% over the past 24 hours. LUNA is meant to hold the price of UST right at US$1, with investors holding UST able to swap it for US$1 worth of LUNA at any stage.

So, what does this have to do with the Bitcoin price?

Bitcoin price falls amid US$3 billion sale

As if the 3.2% overnight fall in the Nasdaq didn’t throw up enough tailwinds for the Bitcoin price, the world’s original token came under additional pressure from the Luna Foundation Guard. In an effort to revive the UST US dollar peg, the Foundation reported it will sell it US$3 billion of Bitcoin reserves.

According to Jaime Baeza, CEO of crypto hedge fund ANB Investments (quoted by Forbes), “This accelerated the selloff of the broader crypto market as panic spread, and a more black swan systemic-risk event loomed closer.”

Baeza added:

Crypto markets have been under pressure given macro events – tighter monetary policy, surging inflation, Russia’s invasion of Ukraine – and the correlation between Bitcoin and global equities is high. However, the most recent fall in crypto prices is more due to the de-peg of the UST.

With the leading global stablecoin now showing even more volatility than the Bitcoin price, proceed with care.

The post Bitcoin price plunges below US$30,000. What’s going on? appeared first on The Motley Fool Australia.

More reading

• Why should I buy Bitcoin ETF shares instead of just buying Bitcoin?
• ‘Slow motion meltdown’: How low will the Bitcoin price sink?
• Bitcoin just fell 10% in a day: Time to strike?
• First-ever Aussie Bitcoin and Ethereum ETFs finally launch this week
• Bitcoin price slumps to 4-month lows. Now what?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin and Luna. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

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The Zip Co Ltd (ASX: ZIP) share price crashed to a near four-year low this morning as the ASX tech sector came under intense selling pressure.

The S&P/ASX All Technology Index (ASX: XTX) shed almost 6% shortly after the open following a poor lead from its US counterparts. This makes the tech sector the worst performer so far today.

Inflation fears pressuring the Zip share price

The higher-than-expected inflation reading from the world’s largest economy is stoking the fires of fear. Overnight it was revealed that US inflation is currently at 8.3%, which remains close to the 40-year high of 8.5% recorded in March. Investors are worried that the US Federal Reserve will have to aggressively raise interest rates to cool rising prices.

Higher rates are bad news for risk assets, particularly growth shares which typically trade at a premium with little to no profits.

Given how globalised markets are, rising US rates could also put more pressure on the Reserve Bank of Australia to lift rates here.

More bad news

Little wonder the Zip share price has lost a further 5% to hit 95.5 cents at the time of writing. It was only two days ago that the buy now, pay later (BNPL) share crashed under $1 due to much to the same headwinds.

But there could be more bad news for long-suffering Zip shareholders. Charities and consumer groups are calling for tighter regulation on the BNPL sector – no matter who wins government this month.

The surging cost of living is pushing more vulnerable consumers to use BNPL services to pay for daily essentials, according to these groups.

How the Zip share price is performing

Zip isn’t the only ASX tech share feeling the pain from the wider tech sell-off this morning. Shortly after open, the Block Inc (ASX: SQ2) share price crashed 15.8% to a new 52-week low of $102. The Splitit Ltd (ASX: SPT) share price lost 7.1% to 26 cents and Humm Group Ltd (ASX: HUM) shed 2.7% to 72 cents.

However, over the past year, the Zip share price has been the laggard within the group. Zip shares have collapsed 85%. The Block share price is down 41% and the Splitit share price has lost 60%. The Humm share price is faring better with a more modest 17% decline.

The post Zip share price tumbles 5% to another multi-year low appeared first on The Motley Fool Australia.

More reading

• How much further can ASX 200 tech shares tumble? Macquarie weighs in
• Why AUB, Block, BrainChip, and Pushpay shares are sinking
• ASX 200 tech shares are staging a remarkable recovery today
• Technophobia? Why ASX 200 tech shares are getting hammered again
• It’s happened: Zip share price tumbles below $1 for first time since 2018

Motley Fool contributor Brendon Lau has positions in Block, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended Humm Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Shares in Orica Ltd (ASX: ORI) are lifting from the open today amid the release of its half yearly report and set of accounts.

At the time of writing, the Orica share price is resting at $16.38 after pushing more than 4% higher on the day.

In wider market moves, the S&P/ASX 200 Materials Index (ASX: XMJ) is flat from the open, currently resting at 16,722.

Orica grows earnings per share 94%

• Sales revenue of $3,277 million during the half, up $2,623 million the same time last year
• Statutory net loss after tax (NLAT) of $85 million down from statutory Net Profit After Tax (NPAT) of $79 million in the prior corresponding period (pcp).
• Underlying EBIT of $245 million, up 58% on the pcp
• Ammonium nitrate (AN) volumes of 2.0 million tonnes up 5% on the pcp
• Underlying earnings per share (EPS) of 36.1 cents, up 94% on the pcp
• Net debt of $1.6 billion and gearing at 38.3%, apparently within target range
• Unfranked interim dividend of 13.0 cents per ordinary share, representing a payout ratio of 41%

What else happened this period for Orica?

Orica printed sales revenue for the half of $3,277 million, a 25% jump on the same period last year. This carried through to a NLAT of $85 million, well down on the pcp’s $79 million net profit.

Part of the loss was underscored by a $61 million tax payment and a net loss on sale of Minova after tax of circa $91 million.

Total capital expenditure (CAPEX) was apparently in line with expectations for the first half. On this, Orica expects its full year CAPEX to remain in line with forecasts of $340 million–$360 million.

Meanwhile, underlying EBIT came in at $245 million which represented a circa. 60% gain on the year. Even with the half-year loss, Orica managed to declare a 13 cents per share dividend on a 41% payout ratio.

Shareholders can expect the payment into their brokerage accounts on 8 July 2022, per the company’s release.

Orica also mentioned its gearing remains at around 38% which is within the target range of 30–40%.

Management commentary

Speaking on the results, Orica Managing Director and CEO Sanjeev Gandhi said:

Our first half result reflects the relentless efforts of our team in improving performance, in line with our refreshed strategy that we outlined in November 2021. Focusing on three value drivers that aligns with Orica’s strengths, the refreshed strategy aims to deliver solutions and technology that drive productivity and innovation for customers and provide enduring value to shareholders and other stakeholders.

What’s next for Orica?

Orica mentioned that it expects performance to continue into H2 FY22.

Regarding its forecasts, Gandhi said:

We expect steady commodity growth, particularly in gold, copper and quarry and construction in the second half which will continue to drive demand for our products and services.

We expect the momentum in earnings from the underlying businesses to continue, despite the planned exit from our operations in Russia, the supply chain challenges associated with Russia-Ukraine, and the divestment of Minova.

Orica share price snapshot

In the last 12 months, the Orica share price has gained 22% after climbing another 20% this year to date.

The post Orica share price spikes amid 25% jump in sales revenue appeared first on The Motley Fool Australia.

More reading

• Gambling & explosives: fund reveals 2 ASX shares to buy right now

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened 

The news in the crypto market continued to get worse after Tuesday’s de-peg of TerraUSD (CRYPTO: UST) from the U.S. dollar, as well as the drop in Bitcoin (CRYPTO: BTC). This has effectively caused a cascade of selling and has led to outright panic in some circles. And even the most useful crypto assets are down big Wednesday. 

At noon ET, the value of Ethereum (CRYPTO: ETH) had fallen 3.6% in the prior 24 hours, Solana (CRYPTO: SOL) had dropped 19.9%, and Cardano (CRYPTO: ADA) was down 13.2%. 

So what 

The biggest news of the day was that the TerraUSD stablecoin lost its peg to the dollar. That token’s value fell to as little as $0.30 or so, and as of late Wednesday afternoon, was still only at $0.63. This crisis in what was viewed previously as a safe asset has created a cascade of impacts and drops in the prices of nearly all major tokens. According to Coinglass.com, $859 million worth of cryptocurrency positions have been liquidated in the last 24 hours alone, and if prices continue to fall, that number will likely go higher.

When such big tumbles occur, broad panic can set in. That’s what we’re seeing Wednesday with relatively smaller market cap tokens, like Solana and Cardano. Selling leads to more selling, and because those tokens have no tangible assets to fall back on, there’s no clear floor underneath their prices.

Ethereum, which is a top token for use in smart contracts, was actually holding up relatively well, which shows some of the strength in leading cryptocurrencies on a relative basis. 

It doesn’t help that the stock market is also dropping this week. The quarterly earnings reports that companies have been delivering haven’t been as strong as some investors expected, and that’s leading to a further “risk off” trade in the market. Cryptocurrencies are highly risky, so in this environment, there are naturally going to be a lot of sellers. 

Now what 

It certainly looks like all-out panic is setting into the crypto market. Investors are getting liquidated in some cases, and some of the investment theses behind cryptocurrencies are falling apart. 

What’s special about Ethereum, Solana, and Cardano is that they’re all utility tokens, allowing developers to build applications on top of their blockchains. And billions of dollars are flowing into the cryptocurrency development ecosystem, which will lead to innovations over the next decade or more. In time, that should drive values higher, although we don’t know when those upsides might be seen. 

I think we’re starting to see the panic in the market reach a peak, and similar moments have typically been buying opportunities for great long-term assets. In cryptocurrency, I think the lasting tokens and blockchains will be those that developers use most to provide digital or real-world utility for users. These three cryptocurrencies are on the top of that list.

That said, there’s likely to be more volatility ahead, and this may not be the bottom. So, investors buying now should be prepared, because these are long-term investments, and in the near term, trading in crypto can be unpredictable, as was demonstrated again this week. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Ethereum, Solana, and Cardano all plunged today appeared first on The Motley Fool Australia.

More reading

• Why should I buy Bitcoin ETF shares instead of just buying Bitcoin?
• The Ethereum price just got smashed. What’s going on?
• First-ever Aussie Bitcoin and Ethereum ETFs finally launch this week
• Why Ethereum, Dogecoin, and The Sandbox dropped today
• Why Cardano is rising today

Travis Hoium has positions in Ethereum and Solana. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin, Ethereum, and Solana. The Motley Fool Australia owns and has recommended Bitcoin, Ethereum and Solana. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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