Category: Stock Market

The Mineral Resources Limited (ASX: MIN) share price has been a strong performer over the last couple of months.

During this time, the mining and mining services company’s shares have risen an impressive 28% to $58.71.

This has been driven largely by its exposure to lithium, which continues to command sky high prices thanks to its use in electric vehicles and renewable energy.

Can the Mineral Resources share price keep rising?

According to a note out of Goldman Sachs, its analysts believe the Mineral Resources share price can rise further from current levels.

The note reveals that its analysts have retained their buy rating with an improved price target of $69.50.

Based on the current Mineral Resources share price, this implies potential upside of just over 18% for investors over the next 12 months.

In addition, the broker is forecasting a ~3% dividend yield in FY 2023, which stretches the total potential return to approximately 21%.

What did Goldman say?

Although Goldman Sachs wasn’t blown away by either Mineral Resources’ FY 2022 results or its FY 2023 guidance, it remains positive due to stronger than expected lithium prices. It commented:

MIN reported FY22 underlying EBITDA/NPAT of A$1,024mn/A$400mn,-6%/-15% below GSe and VA consensus on lower than expected earnings from iron ore and mining services. […] Guidance for FY23 was slightly negative vs GSe, with higher costs at the iron ore and Wodgina lithium, and ~A$0.5bn higher capex on a short construction timeframe for Ashburton, and flat mining services volumes.

We increase our FY23-25 EPS by -10%/+9%/+39% with higher iron ore and lithium costs in FY23 partly offset by MtM of our Sep Q lithium price forecasts, and InfraCo capital charges lifting outer-year earnings.

Overall, the broker expects a huge profit jump in FY 2023 thanks largely to the company’s lithium operations. It explained:

We forecast a more than doubling of group EBITDA to over A$2.3bn in FY23 driven by higher lithium volumes (LiOH & spod), tailwinds from M-3 lithium pricing lags, and an improvement in low grade iron ore price realisations.

The post Why Goldman Sachs is bullish on the Mineral Resources share price appeared first on The Motley Fool Australia.

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More reading

• Why Core Lithium, Mineral Resources, PointsBet, and Strike Energy are dropping
• Why are ASX 200 mining shares getting hammered on Friday?
• Why is the Mineral Resources share price down a hole on Friday?
• 5 things to watch on the ASX 200 on Friday
• How do IGO shares compare to Mineral Resources following earnings season?

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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The Allkem Ltd (ASX: AKE) share price finished the week down 3.7% to $13.17 on Friday.

Leading up to Friday, shares in the lithium producer were on course for a weekly gain. However, the market went cold on the $8.46 billion lithium bellwether following news of an insider parting ways with a portion of their Allkem shares.

To what extent has this member of leadership sold down their stake? Let’s take a closer look.

Weighing on the Allkem share price

It appears shareholders struggled to hold an optimistic attitude amid a recent insider transaction on Friday. According to the notice, non-executive director Richard Seville made the call to cash in on a hefty portion of his Allkem shares on 29 and 30 August.

Looking at the details, Seville sold 1.5 million shares on-market on Monday and Tuesday. The total number of shares sold was split evenly between the two days — 750,000 for an average price of $13.67 on Monday and 750,000 shares for an average price of $14.02 on Tuesday.

In total, the former founding managing director of Orocobre (which merged with Allkem) landed $20,767,500 from the sale. In turn, Seville retains 3 million shares following the transaction, valued at nearly $40 million at the current Allkem share price.

Allkem did not provide any further information on why Seville chose to offload the shares. Notably, the sale notice swiftly follows yesterday’s notice about the sale made by fellow independent non-executive director, John Turner. However, Turner’s sale was a much more modest A$275,165 worth.

What else?

While the Allkem share price might be influenced by a significant insider share sale, the pessimism is relatively widespread across ASX lithium shares on Friday.

For context, other major lithium names such as Pilbara Minerals Ltd (ASX: PLS), Liontown Resources Ltd (ASX: LTR), and Core Lithium Ltd (ASX: CXO) were down 1.7%, 4.5%, and 5.2% respectively. This is despite lithium carbonate prices holding steady, according to Trading Economics.

Perhaps Piedmont Lithium Inc (ASX: PLL) plans to build the largest lithium hydroxide processing plant in the United States has sent a signal to the market that increasing supply is likely to come online. This might be a reminder, that at the end of the day, lithium prices are purely driven by supply and demand.

The post An Allkem director offloaded $20 million in shares this week. What gives? appeared first on The Motley Fool Australia.

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More reading

• Piedmont Lithium share price falls 5% after plans to build the largest US lithium plant unveiled
• The Pilbara Minerals share price surged 30% in August. What now?
• Could this new piece of legislation be a boost for ASX lithium shares?
• Leading brokers name 3 ASX shares to buy today
• Are Pilbara Minerals shares better value than Allkem right now?

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 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 Novonix Ltd (ASX: NVX) share price traded deep in the red on Friday, extending losses over the past two trading days to almost 15%.

By Friday’s close, the Novonix share price was down 8% for the day at $2.07, on a volume of 6.24 million shares – ahead of the 4-week trading average of 4.9 million shares.

What’s up with the Novonix share price?

The share has seen heavy selling activity ever since the company posted its FY22 full-year earnings results. It was a busy year for the battery technology company.

Revenues were booked at $8.4 million, although cash from operations and net profit both slipped year on year as the company ramped up its investment back into the business.

The bedrock of this activity was formed via an investment from Philips 66 back in 2021, following its strategic stake in the company for $203 million.

Despite the heavy investment activity, the company didn’t provide any earnings guidance for the coming 12 months.

Perhaps it is this point that has investors worried about the Novonix share price.

In the prevailing market circumstances, investors aren’t paying a premium for unprofitable companies like they were in 2020–2021.

That’s seen in the large wind down in growth-backed indices and ETFs tracking ASX growth shares. For instance, the S&P/ASX 200 Growth Index is down 14% this year, while the Vanguard Diversified High Growth Index ETF (ASX: VDHG) is down a similar amount.

That comes in behind the benchmark S&P/ASX 200 Index (ASX: XJO)‘s 8% loss for the year.

What else could be impacting Novonix shares?

Adding to the downside, ASX materials stocks have taken a nosedive since late August and finished down more than 9% on the week.

Whilst Novonix is an ASX tech share by GICS Industry classification, it has exposure to various commodities through purchase orders.

Losses stemmed on the back of further lockdowns in Chinese megacity Chengdu, located in the west of the country.

The lockdown will last for 4 days but could be extended for the city of 21 million people if COVID-19 cases continue to rise.

“The city is the capital of Sichuan province, which has already been hit by severe drought and floods in recent weeks. A power crisis caused by the heatwave forced some factories in the province to shut last month,” Bloomberg reported today.

“[Chengdu] city’s economy expanded just 3%, well below the 13.1% it grew in the same period in 2021,” it added.

On the back of the news, Brent crude, gasoline and gold posted gains on Friday, whilst lithium was flat at the close.

In fact, lithium carbonate prices remain as buoyant as ever, a point that has implications on the outlook for Novonix in its future purchasing prices of the battery metal.

Meanwhile, the Novonix share price is down 77% this year to date.

The post Slide continues: Novonix share price dumps 14% in 2 days appeared first on The Motley Fool Australia.

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More reading

• Why did the Novonix share price crumble 14% in August?
• Why is the Novonix share price slumping 6% on Thursday?
• Novonix share price lifts despite full-year loss deepening to $71 million
• Here are the top 10 ASX 200 shares today
• Why is the Novonix share price tumbling 6% on Monday?

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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The Zip Co Ltd (ASX: ZIP) share price just can’t catch a break these days.

After the market close on Friday, the buy now pay later (BNPL) provider’s shares were dealt another blow.

What’s happening?

According to an announcement out of S&P Dow Jones Indices, it will be kicking out Zip’s shares from the ASX 200 index at the next rebalance.

The index provider appears to have made the move after Zip’s market capitalisation dropped to such an extent that it was no longer among the 200 largest companies on the Australian share market.

Based on the current Zip share price of 87 cents and the 687,983,539 shares on issue, the BNPL provider’s market capitalisation is a touch under $600 million.

Other tech exits

But Zip won’t be the only removal from the index. It will have a few tech shares to keep it company on the long walk to the exit later this month.

Embattled payment company EML Payments Ltd (ASX: EML), location technology company Life360 Inc (ASX: 360), and sports betting company Pointsbet Holdings Ltd (ASX: PBH) will also be removed from the ASX 200 before the market open on 19 September.

Unsurprisingly, given the state of the tech sector right now, none of their peers will be replacing them. Among the new additions are gold producer Capricorn Metals Ltd (ASX: CMM), energy producer Karoon Energy Ltd (ASX: KAR), and lithium developer Sayona Mining Ltd (ASX: SYA).

Another removal of note is AVZ Minerals Ltd (ASX: AVZ). Remember it? This lithium share exits the ASX 200 index after just six months in it. Though, the embattled lithium developer has spent a good portion of this time suspended from trade due to an ownership dispute.

Interestingly, AVZ also has the ignominy of being kicked out of the ASX 300 index as well. Ouch!

What does this mean?

As fund managers often have strict mandates allowing them to only invest in shares in particular indices, such as the ASX 200 index, they could be forced to sell Zip and the others between now and the rebalance.

This has the potential to put extra pressure on the sell side at a time when the buy side is already very weak.

The post Zip and these shares have been kicked out of the ASX 200 index appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why Core Lithium, Mineral Resources, PointsBet, and Strike Energy are dropping
• Why is the Sayona Mining share price crumbling 8% on Friday?
• It’s a cloudy day on the ASX, but some All Ords shares are still shining brightly
• Broker tips PointsBet share price to double

Motley Fool contributor James Mickleboro has positions in Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended EML Payments, Life360, Inc., Pointsbet Holdings Ltd, and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended EML Payments. The Motley Fool Australia has recommended Pointsbet Holdings 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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If you’re looking to boost your income with some dividend shares, then the two listed below could be worth considering.

Both have been named as buys by analysts and tipped to provide attractive and growing yields. Here’s what they are saying about these dividend shares:

Coles Group Ltd (ASX: COL)

The first ASX dividend share that analysts rate as a buy is Coles.

This supermarket operator has been a strong performer over the last few years thanks to its strong market position and defensive qualities. These have allowed Coles to continue to grow its sales and profits whatever the economy has thrown at it.

Pleasingly, this continued in FY 2022, with Coles recently reporting a 2% increase in sales revenue to $39,369 million and a 4.3% lift in net profit after tax to $1,048 million.

Analysts at Citi don’t expect the company to stop there. Its analysts are expecting further earnings and dividend growth in the coming years. For example, the broker is forecasting fully franked dividends per share of 75 cents in FY 2023 and then 79 cents in FY 2024.

Based on the current Coles share price of $17.56, this will mean yields of 4.3% and 4.5%, respectively, for investors.

Another positive is that Citi sees meaningful upside for its shares over the next 12 months. It currently has a buy rating and $20.10 price target on them.

HomeCo Daily Needs REIT (ASX: HDN)

Another ASX dividend share that analysts have named as a buy is HomeCo Daily Needs. It is a real estate investment trust (REIT) with a focus on convenience-based assets such as neighbourhood retail and retail parks.

Analysts at Morgans are positive on the company. They were pleased with its performance in FY 2022 and believe the company is well-placed for more of the same in the coming years thanks to solid demand for its properties and its development pipeline.

As for dividends, the broker is forecasting dividends of 8.3 cents per share in FY 2023 and 8.7 cents per share in FY 2024. Based on the current HomeCo Daily Needs REIT unit price of $1.28, this will mean yields of 6.5% and 6.8%, respectively.

Morgans also sees decent upside ahead for its shares. Its analysts currently have an add rating and $1.56 price target on them.

The post Boost your income with these ASX dividend shares: analysts appeared first on The Motley Fool Australia.

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More reading

• Why is the Coles share price having such a lousy end to the week?
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• Is the Endeavour share price a bargain after its big tumble in August?
• Why Coles, Fisher & Paykel, New Hope, and Nitro shares are rising

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 positions in and has recommended COLESGROUP DEF SET. 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 Qantas Airways Ltd (ASX: QAN) share price ended the week on a high.

Qantas shares gained 1.44% on Friday to finish at $5.275. For perspective, the S&P/ASX 200 Index (ASX: XJO) fell 0.27% on the last day of the week.

Let’s take a look at what is going on at Qantas.

What’s going on?

Qantas shares have lifted 16% since market close on 24 August. Qantas released FY22 results revealing a statutory loss before tax of $1.19 billion on 25 August. However, the company also announced a $400 million share buy-back.

In today’s news, Qantas’ proposed acquisition of Alliance Aviation is facing more opposition.

Katter’s Australian Party leader Robbie Katter has written to the ACCC, voicing his concerns about the takeover bid.

Qantas advised of its plan to take over Alliance in May. Alliance has 70 aircraft with up to 100 seats, suitable for charter services. Qantas believes the acquisition would mean QantasLink can compete in the “highly competitive charter segment”. However, this acquisition is subject to approval from the ACCC.

In a release today, Katter said the merger “could only have a detrimental effect on rural and remote customers. He added:

I personally believe the total acquisition of Alliance by Qantas will do little but intensify the vast problems already being experienced on the Mount Isa and similar routes.

On 18 August, the ACCC expressed it has preliminary competition concerns with the proposed acquisition. ACCC chair Gina Cass-Gottlieb said at the time:

We are concerned that this proposed acquisition is likely to substantially lessen competition for air transport services to and from regional and remote areas in Queensland and Western Australia for corporate customers.

Meanwhile, the national cabinet has recently agreed masks will no longer be required on domestic flights in Australia from 9 September.

A Qantas spokeswoman welcomed the decision, telling the Financial Review it “brings Australia into line” with the United States, the United Kingdom and European countries who have “not required masks onboard for several months”.

Qantas share price snapshot

Qantas shares are up 1% in the past 12 months and are tracking 5% higher year to date.

In the past month, the Qantas share price has surged nearly 14%.

Qantas has a market capitalisation of more than $9.9 billion based on the current share price.

The post Qantas shares end week higher despite latest blow to Alliance bid appeared first on The Motley Fool Australia.

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More reading

• Is this why the Macquarie share price was ‘steaming ahead’ on Friday?
• Brokers name 3 ASX shares to buy today
• Here are the top 10 ASX 200 shares today
• The Bitcoin price tanked 15% in August. Here’s why
• Here are the 3 most heavily traded ASX 200 shares on Friday

Motley Fool contributor Monica O’Shea 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 has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) slipped again today, weighed down by materials shares. The index closed Friday’s session 0.25% lower at 6,828.7 points.

That leaves it 275.4 points – or 3.88% – lower than it ended last week following disastrous sessions on Monday and Thursday.

The S&P/ASX 200 Materials Index (ASX: XMJ) fell 1.9% today after concerns of a major lockdown and lower factory activity in China dragged on commodities overnight.

Iron ore futures tumbled 8% overnight to US$96.39 a tonne. Meanwhile, base metals fell as much as 7.6%.

In more positive news, the S&P/ASX 200 Financials Index (ASX: XFJ) lifted 0.7% despite a notable announcement from AMP Ltd (ASX: AMP).

All in all, five of the ASX 200’s 11 sectors gained on Friday. But which share outperformed all others? Keep reading to find out.

Top 10 ASX 200 shares countdown

Today’s top performing ASX 200 share was tech giant Life360 Inc (ASX: 360). Its share price surged 5.56% despite the company’s silence.

Find out more about Life360 and what it’s been up to lately here.

Today’s biggest gains were made by these ASX shares:

ASX-listed company	Share price	Price change
Life360 Inc (ASX: 360)	$5.13	5.56%
GPT Group (ASX: GPT)	$4.23	2.67%
Clinuvel Pharmaceuticals Limited (ASX: CUV)	$19.25	2.34%
A2 Milk Company Ltd (ASX: A2M)	$5.83	2.28%
Block Inc (ASX: SQ2)	$101.01	2.19%
New Hope Corporation Limited (ASX: NHC)	$5.10	2%
Bank of Queensland Ltd (ASX: BOQ)	$6.99	1.9%
Charter Hall Retailer REIT (ASX: CQR)	$4.12	1.73%
Macquarie Group Ltd (ASX: MQG)	$117.20	1.58%
Qantas Airways Limited (ASX: QAN)	$5.28	1.54%

Our top 10 ASX 200 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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More reading

• Is this why the Macquarie share price was ‘steaming ahead’ on Friday?
• Brokers name 3 ASX shares to buy today
• Why Dexus, Dusk, Macquarie, and Qantas shares are pushing higher
• It’s a cloudy day on the ASX, but some All Ords shares are still shining brightly
• Why is AMP buying back shares?

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 positions in and has recommended Block, Inc. and Life360, Inc. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended A2 Milk and Macquarie 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 Macquarie Group Ltd (ASX: MQG) share price performed well compared to the S&P/ASX 200 Index (ASX: XJO) today.

Macquarie shares went up 1.6% while the ASX 200 lost 0.2%.

It wasn’t the only large financial business that did well.

Let’s look at the performance of the big four ASX bank shares:

• The Commonwealth Bank of Australia (ASX: CBA) share price went up 0.9%
• The National Australia Bank Ltd (ASX: NAB) share price rose 0.8%
• The Westpac Banking Corp (ASX: WBC) share price climbed 0.6%
• The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price went up 0.5%.

As you can see, the Macquarie share price went up materially more than the other major banks’ shares.

What happened?

The ASX share market sees changing prices every day, depending on market sentiment and which buyers and sellers are transacting.

Macquarie shares are steadily regaining some of the lost ground from prior market volatility when there was a lot of fear surrounding higher interest rates.

The global investment bank has seen some positive analysis from UBS analyst John Storey, who looked at July APRA data, according to reporting by The Australian.

He said that Macquarie’s mortgage growth is “steaming ahead” even though there could soon be a slowdown in lending. The Macquarie share price could be helped by the growth of Macquarie Bank.

Macquarie was reportedly the leader when it came to net new mortgage lending for the second consecutive month, but overall mortgage growth “slowed sharply” to 0.3%. The total mortgage rise across the system was $6 billion, which was the lowest since the pandemic.

It was noted that “overall real loan growth remained positive but there were signs of an imminent slowdown, with other personal and credit card lending down 2.1% and 1.2%”. Total gross loans and advances increased by 0.5%, while business lending grew by 0.6%.

How is Macquarie performing in this economic environment?

The latest update that investors had was in late July when Macquarie described how the first quarter of FY23 went at its annual general meeting.

Macquarie revealed “favourable trading conditions” with the first quarter operating profit up year over year, although trading conditions did “soften” during the quarter. Profit can be a key influencer on the Macquarie share price.

The investment bank’s annuity-style businesses – Macquarie Asset Management (MAM) and banking and financial services – saw their net profit rise “significantly” year over year, primarily due to income from the green-focused investment bank Green Investment Group (GIG) asset sales in MAM. The contribution from the banking and financial services division was “broadly in line” year over year.

Macquarie’s market-facing businesses, Commodities and Global Markets (CGM) and Macquarie Capital saw a combined net profit that was “up slightly”, primarily due to “strong results” across the commodities platform and higher investment-related income in Macquarie Capital.

Macquarie share price snapshot

Over the past two months, Macquarie shares have gone up by around 8%.

The post Is this why the Macquarie share price was ‘steaming ahead’ on Friday? appeared first on The Motley Fool Australia.

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More reading

• Brokers name 3 ASX shares to buy today
• Why Dexus, Dusk, Macquarie, and Qantas shares are pushing higher
• It’s a cloudy day on the ASX, but some All Ords shares are still shining brightly
• Why did the ANZ share price go backwards in August?
• Analysts name 2 ASX 200 dividend shares to buy now

Motley Fool contributor Tristan Harrison 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 Macquarie Group Limited and Westpac Banking Corporation. 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:

Harvey Norman Holdings Limited (ASX: HVN)

According to a note out of Citi, its analysts have retained their buy rating and $4.70 price target on this retail giant’s shares. This follows the release of a full year result that came in slightly ahead of expectations. Citi was also pleased to see that household spending appears to be holding up. In light of this and the big discount its shares are trading at compared to the market, the broker thinks now could be time to buy. The Harvey Norman share price is trading at $4.17 today.

Macquarie Group Ltd (ASX: MQG)

A note out of Morgan Stanley reveals that its analysts have retained their overweight rating and lifted their price target on this investment bank’s shares to $231.00. Morgan Stanley has upgraded its earnings estimates for FY 2023 to reflect favourable trading conditions. It is expecting some upbeat commentary at the company’s next quarterly update. The Macquarie share price is currently fetching $176.51.

Webjet Limited (ASX: WEB)

Analysts at Morgans have retained their add rating but trimmed their price target on this online travel agent’s shares slightly to $6.40. Morgans was pleased with Webjet’s trading update and highlights the strong recovery by the WebBeds business. It feels this means the company is on course to deliver earnings ahead of pre-COVID levels in FY 2024. Particularly given its materially lower cost base, consolidated systems, and large business in the US. The Webjet share price is trading at $5.38 on Friday.

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

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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 Harvey Norman Holdings Ltd. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd. The Motley Fool Australia has recommended Macquarie Group Limited and Webjet 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 broken back through the psychologically important US$20,000 mark, currently trading for US$20,226 (AU$29,801).

That’s a healthy rebound from the lows of US$19,654 the world’s top crypto was trading for just a few hours ago. Though Bitcoin remains down 58% year-to-date.

It’s also a fair bit lower than where it kicked off August after the Bitcoin price gained 22% in July.

Here’s what happened in the month just past.

Bitcoin price hit by renewed risk-off sentiment

Depending somewhat on your time zone, as crypto valuations can move quickly, the Bitcoin price kicked off August trading for US$23,715.

By the end of the month, the token was worth US$20,209, down 14.8%.

Though less volatile than many months, August still saw some big price swings, with Bitcoin trading as high as US$25,135 and as low as US$19,600, according to data from CoinMarketCap.

The biggest headwind facing the token was increased hawkishness from the US Federal Reserve and other leading global central banks.

With inflation in most developed nations running at multi-decade highs and not looking to fall back within guideline ranges soon, investors sold off most risk assets in August as they braced for further interest rate hikes.

The tech-heavy NASDAQ, a solid proxy for risk appetite, fell 4.6% last month.

And the Bitcoin price, as we’ve seen through most of 2022, not only mirrored that fall but amplified it. The same way the token tends to amplify gains made by the NASDAQ.

Explaining the strengthening connection between the Bitcoin price and stocks this year, eToro’s market analyst and crypto expert Simon Peters said, “Institutions have treated crypto holdings in much the same way as these equities, which is why there’s greater correlation now than in the past.”

At the current price, Bitcoin has a market cap of US$387 billion.

The post The Bitcoin price tanked 15% in August. Here’s why appeared first on The Motley Fool Australia.

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More reading

• Why the Bitcoin price was struggling today
• Bitcoin price resilience ‘could be a promising sign’: expert
• Can the Bitcoin price reach $100,000?
• Why Bitcoin, Ethereum, and Dogecoin are falling today
• 1 cryptocurrency to buy and hold forever

Motley Fool contributor Bernd Struben 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 Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. 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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