Category: Stock Market

The S&P/ASX 200 Index (ASX: XJO) has followed the lead of Wall Street and is racing higher. In afternoon trade, the benchmark index is up 2.6% to 7,145.9 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are rising:

Accent Group Ltd (ASX: AX1)

The Accent share price is up over 12% to $1.69. This morning this footwear retailer released a trading update and revealed a 52% increase in total group owned sales for the first 18 weeks of the financial year. Accent also reported a 570 basis points increase in its gross margin over the period.

Block Inc (ASX: SQ2)

The Block share price is up 12% to $101.49. This follows a very strong showing for the payment company’s NYSE listed shares on Thursday night. Block’s shares rose 18% on Wall Street after investors flooded back into the tech sector amid hopes that inflation could now be peaking. The market appears hopeful that this could lead to the US Federal Reserve slowing its interest rate hikes.

Nufarm Ltd (ASX: NUF)

The Nufarm share price is up 4% to $5.68. This appears to have been driven by a broker note out of Credit Suisse. According to the note, the broker has upgraded this agricultural chemicals company’s shares to an outperform rating with a $6.85 price target. This implies potential upside of 20% from current levels.

Zip Co Ltd (ASX: ZIP)

The Zip share price is up 20% to 75 cents. Investors have been buying Zip and other ASX tech shares today following the softer inflation reading in the United States. The gains have been so strong in the sector that the S&P/ASX All Technology Index has risen almost 5% today.

The post Why Accent, Block, Nufarm, and Zip shares are racing higher appeared first on The Motley Fool Australia.

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More reading

• Wowsers: Why the Zip share price is up 18% today
• 3 ASX 200 tech shares booming 10% or more on Friday
• ASX 200 tech shares jump 6%
• Why is this ASX All Ords retail share rocketing 13% higher today?
• Analysts say these ASX dividend shares are buys

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 ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended Accent Group. 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

Quarterly reports have given electric vehicle (EV) investors plenty to look at recently. Many stocks in the sector have been heading lower in recent weeks. Tesla (NASDAQ: TSLA) has led the way, perhaps for non-business-related reasons. Even with a bounce in the stock today, Tesla shares are down almost 17% just so far in November.

A jump in several stocks in the EV sector today may be due to more general economic news, but some of those are outperforming even the mammoth 6% gain the Nasdaq Composite index is seeing. As of 1:45 p.m. ET today, Tesla shares were up 6.1%. But Lucid Group (NASDAQ: LCID) and Fisker (NYSE: FSR) were higher by 7.1% and 21.6%, respectively. 

So what

Today’s Consumer Price Index (CPI) data showed that inflation slowed last month as the metric climbed at a 7.7% annual rate. That was below expectations and down from September’s 8.2% annual rate. Investors believe that’s a significant data point that could lead the Federal Reserve to slow or pause interest rate hikes. That resulted in today’s heavy buying of technology and growth stocks, including the EV sector.   

Now what

The move higher marks a reversal for Tesla shares, which have been on a slide recently. Investors found out on Tuesday that the downtrend was likely partially due to CEO Elon Musk selling almost $4 billion in his Tesla stock. Over a recent four-day span, Musk sold 19.5 million shares, raising about $3.95 billion. It’s still unclear if those sales were related to his Twitter purchase, since they occurred after that transaction closed. But it seems likely that it was in some way related. 

Lucid’s bounce today follows a 17% drop yesterday after the company reported its third-quarter results. Investors were not happy to see a decline in reservations for Lucid’s luxury EVs. But there were also positive takeaways from that report. The drop in reservations can be explained by the production delays that have plagued the company along with competitor vehicles entering the market. 

Lucid also told investors it was planning to raise another $1.5 billion through stock sales. Investors don’t want to see that dilution to existing shareholders, but Lucid had previously filed to potentially sell enough shares to raise up to $8 billion over three years. So it shouldn’t have come as a surprise, and the money will go toward growing the company’s international presence. 

Fisker hasn’t begun production yet, but it expects to just one week from now. That stock will likely remain volatile based on how its electric Ocean SUV is received, along with what the company says about production volumes.  

Today, these risky names got a boost from the macroeconomic news regarding inflation. Technology names in general will also likely continue to react to future data as it relates to where interest rates will head. Investors should be prepared for days like today — in either direction. 

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

The post Why Tesla Shares Jumped Today appeared first on The Motley Fool Australia.

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More reading

• Why Tesla stock is tumbling today
• Why did Elon Musk just sell $6 billion worth of Tesla shares?
• Why Tesla hit a new 52-week low today
• Why Tesla shares dropped below $200 on Monday
• Forget Dogecoin, this crypto could be the even bigger winner from Elon Musk’s Twitter takeover

Howard Smith has positions in Lucid Group, Inc. and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. 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.

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

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The United States just reported a softer-than-expected inflation number for October and the S&P/ASX 200 Index (ASX: XJO) sure is celebrating.

Most ASX investors’ portfolios and watchlists are a flood of green today. What a nice change, right?

At the time of writing, the ASX 200 is up 2.53% and the S&P/ASX All Ordinaries Index (ASX: XAO) is up 2.58%.

So, why is the Santos Ltd (ASX: STO) share price struggling?

Santos shares are currently flat at $7.52 per share but have spent much of the day in the red.

Why is Santos underperforming?

We’re possibly seeing a flow-on effect with the Santos share price today, following a major announcement on Tuesday.

Santos reduced its guidance for 2023 production and also revealed plans for a major restructure.

Santos will split its business into two divisions: Upstream Gas and Liquids and Santos Energy Solutions.

As reported by my Fool colleague Brooke, the Santos share price fell 5% on the day of the news. It hasn’t recovered since.

The only news from Santos today is another in a series of daily share buyback notices.

Overnight, the price of natural gas fell by 2.02% to US$6.11 MMBtu. The price is down 9.65% over the past month, according to Trading Economics.

Fundie says Santos share price is a sell

Benjamin Goodwin of Merlon Capital writes on Livewire that it’s time to cash in on ASX energy stocks.

His fund has taken profits on Santos shares as well as Woodside Energy Group Ltd (ASX: WDS) shares.

The fund has also sold down Ampol Ltd (ASX: ALD) and Viva Energy Group Ltd (ASX: VEA), as well as the ASX coal shares of New Hope Corporation Limited (ASX: NHC) and Whitehaven Coal Ltd (ASX: WHC).

Goodwin said:

Having previously identified and invested in the opportunities made available through prolonged underinvestment in traditional energy fuels and invested on the basis of the estimated risk/return trade-offs, we have been steadily reducing exposures as companies in this space have outperformed.

The post Why are Santos shares missing out on the ASX 200 party today? appeared first on The Motley Fool Australia.

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More reading

• Don’t panic! Here are 7 reasons we can avoid a recession: AMP
• 5 things to watch on the ASX 200 on Thursday
• Top brokers name 3 ASX shares to buy today
• Why did the Santos share price take a dive following the company’s investor briefing?
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Bronwyn Allen has positions in Woodside Petroleum Ltd. 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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Another week, another 52-week high for the AMP Ltd (ASX: AMP) share price.

The stock has been on a roll lately, hitting a 52-week high of $1.285 last Wednesday before matching it on Monday.

And it’s gone one further today, cementing an 18-month high of $1.295 in intraday trade on Friday. That marked a 2.37% gain on its previous close.

However, the AMP share price has since eased slightly. It’s currently trading at $1.29, 1.98% higher than it was at the end of Thursday’s session.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has risen 2.54% at the time of writing.

The ASX 200 is seemingly taking the lead from New York, as is the S&P/ASX 200 Financials Index (ASX: XFJ). The sector has gained 1.95% right now.

So, what might be helping to drive the AMP share price – and the broader market – higher today? Let’s take a look.

AMP share price inks new 52-week high

The AMP share price inked a new 52-week high today despite no news having been released by the embattled financials giant.

While the stock has had a good run through 2022 so far, it’s still nearly 75% lower than it was in November 2017.

Today’s gains come amid a broader market surge, apparently brought on by an even stronger session on Wall Street overnight.

While most of Australia slept, the Dow Jones Industrial Average Index (DJX: .DJI) rose 3.7% and the S&P 500 Index (SP: .INX) lifted 5.5%. In true 2022 fashion, the gains appeared to be spurred by softer-than-expected US inflation data.

The nation’s consumer price index rose 0.4% in October and 7.7% over the prior 12 months, according to data released on Thursday (US time). That seemingly bolstered hopes the US Federal Reserve might ease up on rate hikes.

Friday’s lift included, the AMP share price is 29% higher than it was at the start of 2022. It has also gained 12% since this time last year.

Comparatively, the ASX 200 has fallen 6% year to date and 3% over the last 12 months.

The post Why did the AMP share price just crack a new 52-week high today? appeared first on The Motley Fool Australia.

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More reading

• Why is the Fortescue share price launching 5% on Friday?
• Can this help A2 Milk pick up the pieces in China?
• Why have Minerals Resources shares hit two new all-time highs this week?
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today

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 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 Woodside Energy Group Ltd (ASX: WDS) share price is up 1.91% to $38.71, as the broader market enjoys a strong run following softer monthly inflation data from the United States.

Woodside has had an absolutely cracking year in 2022. The Woodside share price is currently up 71% in the year to date. This is largely due to energy supply constraints brought about by Russia’s invasion of Ukraine.

Just two years ago, Woodside shares were in a hole.

COVID-19 lockdowns meant global industrial activity and the use of vehicles declined significantly, reducing the need for fuel.

Woodside was a COVID-19 loser for sure. The Woodside share price dropped to about $16 in the market crash in March 2020. It then spent much of the following two years below $25 per share.

So, for those Woodside investors sitting on very healthy capital gains right now, is it time to sell?

Fundie says Woodside share price is a sell

Benjamin Goodwin of Merlon Capital thinks it’s time to cash in on the Woodside share price today.

Goodwin writes on Livewire that his fund has taken profits on a number of ASX energy stocks. These include Woodside, Ampol Ltd (ASX: ALD), Viva Energy Group Ltd (ASX: VEA), and Santos Ltd (ASX: STO).

The fund has also sold down the ASX coal shares of New Hope Corporation Limited (ASX: NHC) and Whitehaven Coal Ltd (ASX: WHC).

Goodwin said:

Having previously identified and invested in the opportunities made available through prolonged underinvestment in traditional energy fuels and invested on the basis of the estimated risk/return trade-offs, we have been steadily reducing exposures as companies in this space have outperformed.

The case to hold… or even buy?

Romano Sala Tenna, co-founder of Katana Asset Management, told my Fool colleague Bernd in a recent interview that he’s bullish on Woodside for dividend income purposes.

Right now, based on today’s Woodside share price, the oil and gas giant is offering a fully franked trailing dividend yield of 11.3%.

Back in September, Woodside declared its highest interim dividend since 2014 at 109 US cents per share.

This was due to a 400% profit surge, in part due to the merger with the petroleum business of BHP Group Ltd (ASX: BHP).

My colleague, Bruce Jackson, points out that Woodside is trading on trailing single-digit multiples.

For the record, the ASX website has Woodside sitting on a price-to-earnings (P/E) ratio of 8.1.

Bruce reckons Woodside has significant future falls in the oil price already reflected in its share price.  

The post This fund has been selling down its Woodside shares. Should you? appeared first on The Motley Fool Australia.

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More reading

• Why these 4 ASX dividend shares stand out from the crowd: fund manager
• 5 things to watch on the ASX 200 on Friday
• Amidst the ongoing tech stock wreck, value shares are everywhere. There’s just one catch…
• Don’t panic! Here are 7 reasons we can avoid a recession: AMP
• Why is the Woodside share price being whittled away today?

Motley Fool contributor Bronwyn Allen has positions in BHP Billiton Limited and Woodside Petroleum Ltd. 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 Fortescue Metals Group Limited (ASX: FMG) share price is leaping higher on Friday despite no fresh news from the iron ore giant. It’s roaring alongside the broader market in the wake of a ripper session on Wall Street.

The S&P/ASX 200 Index (ASX: XJO) is up 2.57% at the time of writing, while the S&P/ASX 200 Materials Index (ASX: XMJ) has lifted 3.52%.

The Fortescue share price is doing better than that, however. It’s surging 4.74% right now to trade at $17.58.

So, what’s going on with the market and one of its favourite mining stocks on Friday? Let’s take a look.

What’s going right for the Fortescue share price today?

The Fortescue share price is lifting alongside the broader market following the release of softer-than-expected US inflation data overnight and a moderate rise in the iron ore price.

Iron ore futures lifted 0.8% overnight to reach US$88.19 a tonne. Base metals also rose, with nickel leading the way, gaining 5.1%. That might be helping drive the iron ore favourite higher today.

Additionally, the US consumer price index was found to have lifted 0.4% in October and 7.7% over the 12 months prior. That drove gains across Wall Street amid hopes softening inflation could see the US Federal Reserve easing up on rate hikes.

Such international gains are being reflected right across the Aussie bourse today. Indeed, only two ASX 200 materials shares are in the red at the time of writing.

The Fortescue share price is also outperforming its major iron ore-focused peers today.

The Rio Tinto Limited (ASX: RIO) share price is gaining 3.71% right now to trade at $101.95, while that of BHP Group Ltd (ASX: BHP) is up 3.48% at $41.97.

Looking longer-term, however, the Fortescue share price has slipped 11.5% year to date. Though, it has gained 13.7% since this time last year.

Comparatively, Rio Tinto’s stock is up 2% year to date, and that of BHP is down nearly 1%. They’ve both gained around 14.5% over the last 12 months.

Meanwhile, the ASX 200 is down 6% year to date and 3% over the last 12 months.

The post Why is the Fortescue share price launching 5% on Friday? appeared first on The Motley Fool Australia.

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More reading

• Can this help A2 Milk pick up the pieces in China?
• Why have Minerals Resources shares hit two new all-time highs this week?
• 3 reasons I’m still bullish on Fortescue shares
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today

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 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 All Ordinaires Index (ASX: XAO) is having a cracker of a day today. At the time of writing, the All Ords is up an impressive 2.4% and is back over 7,300 points. But that is nothing compared to the performance of the Zip Co Ltd (ASX: ZIP) share price.

Zip shares have exploded today. The ASX’s largest buy now, pay later (BNPL) share is up an extraordinary 18.4% at the time of writing to 74 cents a share. This comes after Zip shares closed at 62 cents yesterday and opened at 69 cents each this morning.

So what on earth has happened to Zip that has invited this incredible revaluation from investors?

Why is the Zip share price rocketing 18% today?

Well, it’s nothing to do with anything out of Zip itself, it would seem. The company hasn’t released any ASX announcements since the results of its annual general meeting on 3 November. And investors reacted sceptically to the company’s investor presentation at the time.

However, we are seeing ASX tech shares boom in value across the market today. Block Inc (ASX: SQ2) shares are up more than 12%. Megaport Ltd (ASX: MP1) shares have enjoyed a 13% or so rise, and the WiseTech Global Ltd (ASX: WTC) share price is up more than 9%.

This comes after a stunning night on the US markets overnight. As my Fool colleague flagged this morning, the US S&P 500 Index rose by a stunning 4.7% during last night’s trading session. The NASDAQ 100 Index did even better, lifting by a jaw-dropping 7.5%.

These moves came after some better-than-expected inflation figures out from the US economy, which points to the possibility that interest rates might not rise as high as feared.

ASX shares, particularly tech shares, tend to be highly partial to the moves that their US counterparts make at any given time. So with such a strong showing stateside, the ASX was always going to have a good day. That is probably what is happening with the Zip share price this Friday.

Zip was probably in line for some of the best gains due to its miserable performance over 2022 thus far. Even after today’s incredible gains, the company remains down by a painful 82.9% over 2022 year to date.

So this might be why investors are in such a forgiving mood over the Zip share price today.

The post Wowsers: Why the Zip share price is up 18% today appeared first on The Motley Fool Australia.

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More reading

• Down 60% since late July, can Zip shares really ’emerge stronger from challenging times’?
• These 10 predictions could help you profit from the stock market regardless of inflation, interest rates or even another bear market
• Why is the Zip share price dropping today?
• Zip share price slides despite CEO pinpointing profit timeline
• What could this proposed regulation mean for Zip shares?

Motley Fool contributor Sebastian Bowen 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., MEGAPORT FPO, WiseTech Global, and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. and WiseTech Global. The Motley Fool Australia has recommended MEGAPORT FPO. 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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It has been another busy week for Australia’s top brokers. This has led to the release of a large number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Breville Group Ltd (ASX: BRG)

According to a note out of Goldman Sachs, its analysts have retained their buy rating and $24.70 price target on this appliance manufacturer’s shares. This follows the release of a trading update at the company’s annual general meeting. Goldman highlights that Breville continues to perform positively thanks to resilient demand for its products in the US and APAC regions. It also likes the company due to its strong position in the at-home coffee market. The Breville share price is trading at $21.28 on Friday.

Computershare Limited (ASX: CPU)

A note out of Morgans reveals that its analysts have retained their add rating and lifted their price target on this financial administration company’s shares to $33.52. Morgans was pleased with Computershare’s annual general meeting update. It notes that management has increased its earnings per share growth guidance for FY 2023 to 90% from 55% thanks to rising rates. This has led to Morgans lifting its earnings estimates by 20% for FY 2023 and 35% for FY 2024. The Computershare share price is fetching $26.16 this afternoon.

REA Group Limited (ASX: REA)

Analysts at Credit Suisse have retained their outperform rating but trimmed their price target on this property listings company’s shares to $140.80. Credit Suisse was pleased with REA’s performance during the first quarter. However, it has downgraded its earnings estimates to reflect a sharp drop in listings during October, which has been partly offset by lower costs guidance. The REA share price is trading at $119.86 on Friday afternoon.

The post Brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• 3 ASX 200 shares shooting the lights out on Thursday
• Goldman Sachs says these ASX growth shares are buys
• Why Magellan, News Corp, REA, and Whitehaven Coal shares are dropping today

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 recommended REA 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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The Brainchip Holdings Ltd (ASX: BRN) share price is up by 5.88% this afternoon amid a broader lift in Australian shares as well as US equities overnight.

Shares of the AI company are currently trading for 63 cents apiece.

ASX tech shares are on an absolute ripper on Friday, with the S&P/ASX 200 Info Technology Index (ASX: XIJ) among the best-performing sectors on the ASX. It’s currently up by 3.72%.

Given today’s market action, it should be no surprise that some of BrainChip’s tech peers are also surging higher. Here’s a snapshot of how they’re doing:

• Megaport Ltd (ASX: MP1) up 11.15%
• Novonix Ltd (ASX: NVX) up 9.24%
• Hansen Technologies Limited (ASX: HSN) up 6.25%
• Data#3 Limited (ASX: DTL) up 5.5%
• Nearmap Ltd (ASX: NEA) up 0.73%

Meanwhile, the broader S&P/ASX 200 Index (ASX: XJO) is gaining 2.43%.

So why are tech shares like BrainChip doing so well today? Let’s investigate what unfolded for US equities overnight to see if we can piece together the story.

What’s going on with BrainChip?

The Nasdaq Composite (NASDAQ: .IXIC), the S&P 500 Index (SP: .INX) and the Dow Jones Industrial Average Index (DJX: .DJI) all made record one-day gains in US trading overnight, CNBC reports.

The tech-heavy NASDAQ lept 7.35%, its best one-day gain since March 2020.

As my Fool colleagues in the US note, these indices jumped amid optimism that inflation could finally be cooling down by a significant degree.

The Consumer Price Index (CPI) made gains that came in below expectations. The index rose 0.4% from September and ended October 7.7% year over year.

The bigger picture is that with inflation falling, the Federal Reserve may be more inclined to be more dovish in regard to future interest rate hikes, which has an important implication for tech shares especially.

Tech shares like BrainChip are often hit the hardest when interest rates rise, as my Fool colleague Cathryn noted in September.

Rising interest rates reduce the valuation of these shares significantly because they are valued on their future growth prospects.

BrainChip share price snapshot

The BrainChip share price is down 7% year to date but up almost 29% over the past year.

Meanwhile, the ASX 200 is down 4% and 3% over the same timeframes.

The company’s market capitalisation is around $1.02 billion.

The post Why is the BrainChip share price booming 6% on Friday? appeared first on The Motley Fool Australia.

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More reading

• 5 reasons I would avoid BrainChip shares at all costs
• Why did the BrainChip share price pop then drop today?
• Why did the BrainChip share price lose a quarter of its value in October?
• These were the worst-performing ASX 200 shares in October
• Why Brainchip, Bubs, EML, and Fortescue shares are falling today

Motley Fool contributor Matthew Farley 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 Hansen Technologies, MEGAPORT FPO, and Nearmap Ltd. The Motley Fool Australia has recommended MEGAPORT FPO and Nearmap 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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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.

It’s hard to imagine that just a year ago, many notable cryptocurrencies like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) hit new all-time highs.

In November 2021, the most valuable cryptocurrency, Bitcoin, peaked at around $67,000. Meanwhile, the second-most valuable cryptocurrency, Ethereum, notched an all-time high just shy of $4,900.

That month, the market cap of the cryptocurrency asset class reached a collective value of over $2.8 trillion, a new record. But since then, Bitcoin and Ethereum are both down nearly 65% from their highs and the total crypto market cap sits at just over $1 trillion, a fraction of what it once was.

After this kind of obliteration, concerns are likely warranted. If you’re a new crypto investor, this is likely your first time witnessing a price decline of this magnitude. Welcome to crypto.

The overall trajectory of cryptocurrencies has climbed over the past decade. Still, it seemed all hope might just be lost in some brutal stretches. Let’s take a look at some of those rough patches to put the current one into a little better context. 

Seasons come and go

One of the first crypto bear markets occurred throughout most of 2014 and 2015. After the asset class hit a new market cap all-time high of more than $15.5 billion in December 2013, a slow descent ensued over the next two years and bottomed around $3.7 billion in May 2015, a 75% decrease.

During that same period, Bitcoin lost 80% of its value and went from around $1,100 to just a few hundred dollars.

Yet prices returned to new highs by January 2018. The total crypto market cap reached more than $827 billion and Bitcoin hit a price of almost $20,000, jumps of 22,000% and 9,400%, respectively. 

Those highs were short-lived, like many market tops, and a crypto winter gripped the market for all of 2018. After finding a bottom around January 2019, the crypto market cap had shed 80% of its value and fallen to just over $100 billion. In a similar fashion, Bitcoin lost more than three-quarters of its value. 

But by November 2021, those woes of 2018 were all but forgotten. In a matter of about two and a half years, the crypto asset class hit a new all-time high of around $2.8 trillion and Bitcoin reached more than $67,000. 

Crypto investors now find themselves in a similar situation to years past. Since that peak, the crypto market cap has lost more than half of its value, and Bitcoin is down nearly two-thirds from where it once was. 

The point is, crypto has been here and done that. Not just once, but three times. And each past decimation has been followed by a considerable rally. 

Lessons to be learned

Investors shouldn’t act with certainty and think that just because it happened once, it will happen again, but they can use data to make informed decisions.

And the data shows that historically, investors have the most to gain when crypto and Bitcoin lose around two-thirds of their value.

In addition, the data shows that the return to new highs is not an overnight process. Nor will it happen in a year. It usually takes about two to three years before new highs are made. This isn’t to give you a sense of false hope but rather serve as advice to keep a long-time horizon. 

Hindsight is always 20/20, but imagine if you invested at the absolute bottom of each one of these past bear markets.

A $1,000 investment in Bitcoin when it was worth just a few hundred dollars in 2015 would have been worth more than $90,000 by 2018. A similar $1,000 investment at the 2019 market bottom, when Bitcoin was worth just over $3,200, would have grown to around $20,000 by November 2021. 

Investors today need to keep a few things in mind when navigating these tumultuous times. First, maintain a broad time horizon. The true winners of this bear market will be the ones who plan on holding for at least three years and ideally even longer. 

Second, prioritizing cryptocurrencies with a solid track record is a proven strategy to minimize risk and maximize potential.

It isn’t unheard of for a cryptocurrency to be here today and not make it to tomorrow. Investing in “blue chip” cryptocurrencies like Bitcoin and Ethereum is most recommended since they account for more than half of the value in the entire crypto market. 

Finally, consistency is key. Ensuring that you continue to gain exposure by investing regardless of the price is the best way to maximize your potential profits should prices return to new highs. Ignore the day-to-day and week-to-week price fluctuations.

Remember, bull markets make you money, but taking advantage of bear markets can make you rich. 

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

The post If cryptocurrency prices continue to plummet, what should you do? appeared first on The Motley Fool Australia.

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More reading

• Why did the Bitcoin price just hit 2-year lows?
• Why Ethereum crashed today
• Why Bitcoin and Ethereum were down big on Tuesday morning
• This one trend could send Bitcoin even higher
• Ethereum and Bitcoin price crash spells the end for these Aussie crypto ETFs

RJ Fulton has positions in Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia has has positions in and has recommended Bitcoin and Ethereum. 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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