Category: Stock Market

Shares in BHP Group Ltd (ASX: BHP) are walking higher today and are now trading 1.3% in the green at $53.18 apiece.

Today’s jump takes the gains for the miner for the past six months to 36%. Meanwhile, the benchmark S&P/ASX 200 Index (ASX: XJO) has jumped just over 2.5%.

What’s up with the BHP share price?

There’s been nothing out of BHP’s camp today attributable to its share price gain. However, the S&P/ASX 200 Materials Index (ASX: XMJ) has jumped 11% in the past month, making it a leading sector.

In fact, BHP’s share price tends to track the materials index very closely, as shown on the chart below for the past six months.

With the materials index roaring higher in 2022, BHP is following suit in remarkably similar fashion.

So with a gain in the sector today, it’s not surprising to see a corresponding gain in the BHP’s share price.

Aside from that, shares of Australian iron ore miners are set to surge “after Chinese data showed the need for more stimulus to offset economic headwinds”, Bloomberg News reports today.

“China’s economy grew faster than expected in the first quarter, but activity data for March pointed to rising pressure as the country fights Covid outbreaks,” it said.

This could be a bullish sign as traders already begin to place wagers on the chance of more monetary stimulus coming out of China, it says.

Eight analysts are saying to buy BHP right now, with 13 at a hold and four saying to sell, according to Bloomberg data.

The consensus price target is $48.87 per share from this list.

In the past 12 months, the BHP share price has surged 12%. It has also gained 25% this year to date. That’s on the back of a 15% jump in the past month.

The post What’s boosting the BHP share price today? appeared first on The Motley Fool Australia.

More reading

• 2 ASX 200 dividend giants named as buys by brokers
• The BHP share price has had a stellar start to the year. Is it just the beginning?
• How ASX dividend shares can provide support through periods of uncertainty
• Own BHP shares? Here’s why the miner could be gearing up to offload more carbon-heavy projects
• Here are the top 10 ASX mining companies by market cap

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 Bruce Jackson.

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The Qantas Airways Limited (ASX: QAN) share price is currently down by 1.5% after having a difficult weekend of travel.

Qantas is Australia’s largest airline. But that also means it handles the greatest number of passengers.

What happened over the Easter weekend?

According to reporting by various media, including The Age, Qantas has been on the receiving end of “severe criticism” from customers as the airline faced significant delays and cancelled flights.

The Age reported there were:

Uncleared toilet tanks on planes and no worker immediately on hand to pump out the waste. Passengers claiming they were offered latex gloves to eat warm food after no cutlery was loaded onto the aircraft. Broken seats, lost luggage, two-hour, three-hour, four-hour delays.

Why did this happen?

It was reported that there weren’t enough captains or first officers for all of the flights. The airline was also reportedly short on crew.

Another problem for travellers was delays with ground security, which is the responsibility of the airports. Many security guards reportedly called in sick and a third of passengers were required to have their bags rechecked.

The Age reported that Qantas CEO Alan Joyce defended the delays, saying it was because of staff shortages due to COVID and “customers not being match fit for travel”.

In a media release, the Business Council of Australia said that the workforce in some airports was 40% lower than before COVID-19.

However, a former Qantas executive said that the airline simply wasn’t prepared for the holiday. The Age reported the unnamed executive’s comments:

Why were they not prepared? They knew they had sold well, they knew they had increased capacity. They should have had training in place for their staff who had not been working during the past two years. It’s a real shame.

In one way it’s fantastic that people want to travel again and demand is that high, but it’s also terrible to see these scenes at the airports caused by a lack of preparedness.

What next for the Qantas share price?

One of the latest opinions on Qantas shares comes from Ord Minnett. It currently rates the ASX share as a buy with a price target of $5.95. That implies a potential upside of around 10%. The broker appreciates the focus of the fleet renewal on planes that use less fuel.

The broker thinks that Qantas can return to profit in FY24 after a few years of disruption.

Ord Minnett’s projections suggest the Qantas share price is valued at 11x FY23’s estimated earnings. There is also a possibility of a return to shareholder payouts in FY23.

The post Qantas share price slides following Easter travel woes appeared first on The Motley Fool Australia.

More reading

• Here are the 5 best performing ASX travel shares of 2022 so far
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• ASX 200 travel shares had a super day. What’s happening?
• Why Allkem, Domino’s, Qantas, and Uniti shares are racing higher
• Why is the Qantas share price flying 7% higher today?

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 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 Bruce Jackson.

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The Praemium Ltd (ASX: PPS) share price is taking off today on Tuesday following a positive update from the company.

At the time of writing, the investment platform provider’s shares are 16.94% higher to 72.5 cents.

Praemium continues ‘outstanding momentum’

Investors are bidding up the Praemium share price after the company reported its latest quarterly performance.

According to its release, Praemium advised it has attained key milestones to the prior comparative period (pcp).

For the 3 months ending in March, the company achieved quarterly net inflows of $725 million. This represents an 82% increase on the pcp ($398 million), but a fall of 42% on the previous quarter ($1,248 million).

The net platform inflows consisted of $446 million for the Australian platform and $279 million for the international platform.

In addition, total funds under administration (FUA) came to $47.7 billion. This reflected a 26% lift in the past 12 months underpinned by market-leading functionality in the key areas. For context, Praemium delivered a record-breaking quarter in December of $48.9 billion.

The Australia platform FUA grew to $20.7 billion, improving 23% on the prior comparable year. And the international platform FUA surged by $5.6 billion, up 28% over the same timeframe.

FUA for VMAAS stood at $21.4 billion, up 28% compared to the prior year. VMAAS is Praemium’s non-custodial Portfolio Administration and Reporting Service.

Praemium noted that the strong net platform inflows for the March quarter were offset by the FX impact. This relates to a higher Australian Dollar to Pound Sterling exchange rate and negative market movements on FUA.

What did management say?

Praemium CEO, Anthony Wamsteker touched on the robust result, saying:

We are delighted to report continued outstanding momentum this quarter…

This shows Praemium is delivering on our strategy to become one of Australia’s largest independent specialist platform providers.

…We anticipate this strong growth trajectory to continue, with a healthy sales pipeline translating to FUA and revenue growth for the remainder of the financial year.

We are pleased to have been rated as the top platform in three out of six categories in the latest Investment Trends Platform Report, categories that are arguably the most crucial to helping an adviser deliver their service efficiently and effectively.

Praemium share price summary

Despite today’s euphoric gains, the Praemium share price has lost almost 10% in the past 12 months.

When looking at year to date, its shares are down 50% in value.

Based on today’s price, Praemium commands a market capitalisation of roughly $373.24 million.

The post Here’s why the Praemium share price is surging 17% appeared first on The Motley Fool Australia.

More reading

• Lake Resources share price spikes 14% as lithium prices begin to ease
• Leading brokers name 3 ASX shares to buy today
• The Betmakers share price is surging 6% on Tuesday. Could this be why?
• Is there still hope for the A2 Milk share price in 2022?
• Amazon earnings: What to watch on April 28

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. owns and has recommended Praemium Limited. The Motley Fool Australia has recommended Praemium Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Lake Resources NL (ASX: LKE) share price is soaring 13.93% today and is now trading at $2.29, having earlier hit an intraday high of $2.36.

Lithium carbonate prices have eased thanks to heightened production in China year-over-year and month-over-month in March, Trading Economics reports, but are still well up for the year.

“[C]arbonate prices surged 74% year-to-date, as rising energy prices strengthened the appeal to transition away from fossil fuels, adding to the booming demand for electric vehicles,” it says.

“After rising 157% to 3.2 million units in 2021, electric vehicle sales in China are expected to cross five million in 2022,” it adds.

With electric vehicles at the forefront of the lithium push, it doesn’t seem as if demand for the battery metal is set to slow either – even if prices recently fell.

Why is Lake Resources share price rising then?

While lithium prices recently crossed downward for the first time in over 12 months, the Lake Resources share price has been heading the other way.

It’s gained 141% in little over a month and is now up 127% this year to date. The most recent growth catalyst is Lake’s signing of an offtake agreement of up to 25,000 tonnes per annum (tpa) of lithium carbonate from the Kachi project in Argentina.

With that and other agreements in place, Lake hopes to achieve a production capacity of 100,000 tonnes of lithium by the year 2030.

Analyst Stuart Howe at Bell Potter was immediately impressed by the latest move and urged clients to buy on a speculative rating.

BP values the company at $2.83 apiece, noting that Lake has “strategic appeal” in a recent note to clients. The broker is joined by seven other analysts – 100% of coverage – advocating to buy right now, per Bloomberg data.

The consensus price target from this list is $2.47 apiece, offering a potential 8% upside if the analysts are correct.

In the last 12 months, the Lake Resources share price has spiked more than 600% and is now up 48% in the past month of trade, despite lithium prices easing off.

The post Lake Resources share price spikes 14% as lithium prices begin to ease appeared first on The Motley Fool Australia.

More reading

• Analysts name 3 top ASX lithium stocks to buy now
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• The Lake Resources share price has surged 56% in a month. What’s happening?
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• Lithium watch: Broker tips Lake Resources share price to rocket 42% higher

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 Bruce Jackson.

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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Allkem Ltd (ASX: AKE)

According to a note out of Citi, its analysts have retained their buy rating and $16.00 price target on this lithium miner’s shares. This follows the release of Allkem’s third quarter update, which was a touch softer than it expected. Nevertheless, with lithium prices expected to jump again during the fourth quarter, Citi remains very positive on Allkem’s outlook. The Allkem share price is trading at $13.51 today.

Bank of Queensland Limited (ASX: BOQ)

A note out of Morgans reveals that its analysts have retained their add rating and $11.00 price target on this regional bank’s shares. This follows the release of the bank’s first half results, which came in ahead of expectations thanks to one-offs. Looking ahead, the broker is positive on Bank of Queensland’s future and is expecting stronger returns on equity as cost efficiencies and synergies are realised from the ME Bank acquisition. The Bank of Queensland share price is fetching $7.95 on Tuesday afternoon.

TechnologyOne Ltd (ASX: TNE)

Analysts at Goldman Sachs have initiated coverage on this enterprise software company’s shares with a buy rating and $13.90 price target. Goldman expects TechnologyOne to meet its +A$500 million FY 2026 ARR target and even believes that the risks are skewed to the upside. It also expects the company to deliver on its target of expanding profit margins. It notes that both of these are not factored into consensus or market expectations. The TechnologyOne share price is trading at $11.00 today.

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

More reading

• Analysts name 3 top ASX lithium stocks to buy now
• Broker says Bank of Queensland share price is great value
• 5 things to watch on the ASX 200 on Tuesday
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• Are these 2 ASX tech shares buys in April?

Motley Fool contributor James Mickleboro owns Allkem Limited. 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 Bruce Jackson.

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The Betmakers Technology Group Ltd (ASX: BET) share price is launching higher on Tuesday despite the company’s silence.

In fact, the market hasn’t heard word from the betting technology developer and distributor since February.

Still, the Betmakers share price is up 5.88% at the time of writing, trading at 63 cents.

Though, at its intraday high of 64.5 cents, the stock was boasting an 8.4% gain.

For context, the broader market is also up in the green today, though, not to the same extent.

Right now, the All Ordinaries Index (ASX: XAO) is up 0.6% while the S&P/ASX 200 Index (ASX: XJO) has gained 0.58%.

Let’s take a closer look at how Betmakers, and its peers, are performing on Tuesday.

What’s driving the BetMakers share price today?

The Betmakers share price is taking off on Tuesday, while many of its consumer discretionary peers struggle.

The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) is currently underperforming the broader market, gaining just 0.14%.

However, the betting technology company’s gain might be a continuation of last week’s rebound.

Over the first 12 days of April, Betmakers’ stock slumped 12.5%. Though, it managed to regain 7.1% over the course of Wednesday and Thursday last week. It’s still 3% lower than it was this time last month.

Additionally, Betmakers’ short position has improved ever so slightly. According to the latest data from ASIC, 12.5% of its shares were in the hands of short-sellers last week. That’s down from 12.6% on 7 April.

The post The Betmakers share price is surging 6% on Tuesday. Could this be why? appeared first on The Motley Fool Australia.

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• These are the 10 most shorted ASX 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. owns and has recommended Betmakers Technology Group Ltd. The Motley Fool Australia has recommended Betmakers Technology Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The A2 Milk Company Ltd (ASX: A2M) share price has had a difficult period during COVID-19. But could there still be hope for the company over the rest of the year?

Since the start of July 2020, the A2 Milk share price has fallen by around 75%. In the 2022 calendar year, A2 Milk shares have fallen around 16%.

Could the under-pressure business actually be an opportunity?

Some broker opinions are not optimistic about the business in the short term, but the price targets suggest upside.

Are negatives building for the A2 Milk share price?

One of the most recent notes on A2 Milk came from Credit Suisse. It’s currently neutral on the company, however, it reduced its price target from $5.75 to $5.15. This implies a potential rise of around 10%.

There are a few factors affecting the broker’s opinion of the business. The number of babies born in China is expected to fall this year, meaning this could lead to lower demand for A2 Milk’s products because there are less mouths to feed. Credit Suisse has reduced its expectations of profit.

Lockdowns in China are also expected to hurt short-term online revenue in the country. For example, Shanghai, one of the biggest cities in the country, has been in lockdown for weeks. The lockdowns are reportedly impacting various parts of the country.

However, the A2 Milk share price could benefit with Credit Suisse expecting the company to continue growing its market share in the country over the next couple of years.

Credit Suisse puts the A2 Milk share price at 33x FY22’s estimated earnings and 29x FY23’s estimated earnings.

Other ratings

There are, of course, other ratings on A2 Milk and some of the negative ones now have price targets that imply a notable gain for the company.

For example, the brokers at Macquarie rated the A2 Milk share price as ‘underperform’. However, the price target of $5.60 offers a potential upside of around 20%. It noted the growing market share for the company.

Citi currently rates the company as a sell. The price target is $4.80 because of the impacts of COVID-19 on China.

Morgans rates the business as a hold but has an A2 Milk share price target of $6.39. That suggests a possible rise of almost 40% over the next year. The broker thinks that the leadership has done well to stop the decline.

A2 Milk outlook

A2 Milk gave its thoughts about the short term when it released its FY22 half-year result.

It said that the revenue growth outlook for FY22 had improved, with FY22 second-half revenue expected to be “significantly higher” than the second half of FY21 and higher than the first half of FY22, thanks to growth in Chinese label and English label infant formula.

However, improvement in revenue is not expected to translate into higher earnings this year as it planned to increase investment for growth.

The post Is there still hope for the A2 Milk share price in 2022? appeared first on The Motley Fool Australia.

More reading

• These were the worst performing ASX 200 shares last week
• Why is the A2 Milk share price outperforming today?
• 3 ASX 200 shares sliding to 52-week lows on Tuesday
• Why A2 Milk, G8 Education, Nearmap, and Zip shares are dropping
• Why A2 Milk, Ionic Rare Earths, Pilbara Minerals, and Tyro shares are dropping

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 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 Bruce Jackson.

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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.

Amazon (NASDAQ: AMZN) is slated to report its first-quarter 2022 results after the market close on Thursday, April 28. An analyst conference call is scheduled for the same day at 5:30 p.m. ET. 

The e-commerce and technology behemoth is heading into its report on a mixed note. Last quarter, its earnings crushed the Wall Street consensus estimate, while its revenue was in line with expectations. However, in the prior quarter (the third quarter of 2021), Amazon missed the consensus estimate for both the top and bottom lines, with the profit miss quite large. And in the quarter before that one, the company also fell short of the Street’s revenue expectation. 

In 2022, Amazon stock is performing roughly in line with the broader market. It’s down 9% through April 14 (April 15 was a market holiday), while the S&P 500 and Nasdaq Composite indexes (including dividends) are underwater by 7.5% and 14.5%, respectively. 

Here’s what to watch in Amazon’s upcoming report. 

Amazon’s key numbers

Metric	Q1 2021 Result	Amazon’s Q1 2022 Guidance	Amazon’s Projected Change	Wall Street’s Q1 2022 Consensus Estimate	Wall Street’s Projected Change
Revenue	$108.5 billion	$112 billion to $117 billion	Approximately 3% to 8%	$116.3 billion	7.2%
Adjusted earnings per share (EPS)	$15.79	N/A	N/A	$8.48	(46%)

Data sources: Amazon.com and Yahoo! Finance. Note: Amazon does not provide earnings guidance.

While Amazon doesn’t provide guidance for earnings, it does so for operating income. Management expects first-quarter operating income to range from $3 billion to $6 billion, which represents a decline of 66% to 48% from the year-ago period. 

For context, last quarter — the big holiday quarter — Amazon’s revenue increased 9% year over year to $137.4 billion. That result was on target with the $137.4 billion Wall Street had expected and near the high end of the company’s guidance range of $130 billion to $140 billion. By segment, sales in North America and Amazon Web Services rose 9% and 40%, respectively, while those in international edged down 1%.

Last quarter’s net income was $14.3 billion, or $27.75 per share, up 97% year over year. This result demolished the analyst consensus estimate of $3.58 per share. But that’s because the bottom line got a big boost from a pre-tax valuation gain of $11.8 billion from Amazon’s common stock investment in electric vehicle maker Rivian Automotive, which held its initial public offering (IPO) in November.

Supply chain issues

Like other companies that import product, Amazon has been dealing with pandemic-driven global supply chain issues, which have increased costs. Its costs have also risen because of higher employee wages stemming at least in part from a tight labor market.

The company has been doing a good job controlling the impact on its results of these macroeconomic issues. Moreover, on last quarter’s earnings call, CFO Brian Olsavsky said management expected supply chain issues to have less of an impact on first-quarter results relative to recent results. 

Second-quarter 2022 guidance 

The market looks forward, so its reaction to Amazon’s upcoming report will probably hinge at least as much on second-quarter guidance as on first-quarter results. 

The company provides guidance for revenue, but not earnings. However, its outlook for operating income often gives investors a general idea as to what year-over-year percentage change the company expects on the bottom line.

For Q2, Wall Street is currently modeling for Amazon’s revenue to increase 12% year over year to $126.4 billion and adjusted EPS to decline 26% to $11.22.

Investors should note that last year Amazon’s annual Prime Day was held in Q2 (June). The company hasn’t yet announced the date for this year’s event. This is a big event so presumably has more than a negligible impact (which the company doesn’t quantify) on results. In other words, year-over-year comparisons should be affected if Prime Day isn’t held in the same quarter as last year. 

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

The post Amazon earnings: What to watch on April 28 appeared first on The Motley Fool Australia.

More reading

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• Shopify, Alphabet, Amazon, and Tesla stocks are splitting — which ones are the best buys?
• Is Amazon stock a buy this month?
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Beth McKenna has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 

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

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The AGL Energy Limited (ASX: AGL) share price has started this week on a roll, currently 2.08% higher at $8.82.

And while there’s been no word from the company lately, there have been a few recent happenings that could be helping its stock.

The energy producer and retailer’s stock earlier reached an intraday high of $8.83 — the highest it’s been since July 2021.

For context, the S&P/ASX 200 Index (ASX: XJO) is also in the green on Tuesday. It’s currently up 0.57%.

Let’s take a look at all that might be driving AGL’s stock upwards today.

What’s boosting the AGL share price today?

The AGL share price is moving higher on Tuesday, as is its home sector.

Right now, the S&P/ASX 200 Utilities Index (ASX: XUJ) is up 1.33%, with all three of its constituents recording gains.

On top of that, the S&P/ASX 200 Energy Index (ASX: XEJ) has gained 1.32%, making them among the best-performing sectors today.

While the positive momentum among its ASX 200 peers might be driving the AGL share price higher, its gains might also be a delayed reaction to the company’s recently changed short position.

In late March, AGL’s short position was 2.28%, according to Australian Securities and Investments Commission (ASIC) data. Now, it’s sitting at 0.49%.

Previously, around 15 million of the company’s shares were in the hands of short sellers. As of the most recent data available, that number has fallen to approximately 3.3 million.

That means fewer market participants are betting the company’s stock will fall.

Since the regulator broke the news of the notable drop, the AGL share price has surged 15%.

Additionally, today’s gains included, it’s almost 40% higher than it was at the start of 2022.

Though, it has fallen 4.6% since this time last year.

The post Why is the AGL share price having such a stellar start to the week? appeared first on The Motley Fool Australia.

More reading

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• What was the highest ever AGL Energy share price?
• Rain or sunshine for ASX renewable shares in the March quarter?
• Could April be a good month for the AGL share price?
• Why AGL, Alliance Aviation, Woodside, and Xero shares are charging higher

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 Bruce Jackson.

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A big criticism of cryptocurrencies such as Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) is that a huge amount of energy is required to create and maintain them.

The trouble is, blockchain systems require high levels of computing power to crunch all the numbers. And all that calculation leaves a significant carbon footprint.

According to Coinjar, Ethereum annually uses about 110TWh of electricity, which is the same as the entire nation of the Netherlands.

But a big change is coming that will bring this impact down.

Just get one person to run, not 10

Ethereum currently runs on a proof-of-work protocol. 

Balmoral Asset Management director Angus Crennan last month told The Motley Fool how that is extremely inefficient.

“Imagine 10 people starting a race and running all the way to the end of the race, but only one of them is allowed through the gate. So then the other nine runners have to go back to the start, and all that energy and time is wasted.”

But the great news is that Ethereum is upgrading to a proof-of-stake network — a project known as ETH 2.0 or The Merge.

“What happens there is that there’s a selection process of who’s going to do the reconciliations,” said Crennan.

“What that means is modern cryptocurrencies like Solana (CRYPTO: SOL) use less energy to do a transaction than it does to do a Google search.”

So it will be that Ethereum will dramatically reduce its energy usage once the upgrade takes place.

“One estimate puts Ethereum’s post-Merge energy usage on par with that of a small town,” Coinjar told its customers.

“Add in scaling technologies such as sharding and it’s expected that the network’s energy-per-transaction cost could end up somewhere between 0.1% to 0.4% of Visa Inc (NYSE: V)’s.”

Bitcoin still using enormous energy

This significant reform from the second biggest crypto leaves the question of what Bitcoin can do.

Bitcoin is still running on a proof-of-work network, which is proving to be brutal on the environment.

According to Bankless Times, mining one Bitcoin emits about 191 tonnes of carbon dioxide. This is the same carbon footprint as 1.6 million Visa transactions.

Digging up gold, in fact, uses 3.5 times less power than creating new Bitcoin.

Yikes.

The situation is even worse now than a year ago because of China’s prohibition last year on Bitcoin mining.

Until then, the majority of Bitcoin creation took place in that country, using renewable hydroelectricity resources.

“Early signs suggest that the proportion of renewable energy in the mix may have dropped 30% to 40%.”

According to Coinjar, the Bitcoin network now eats up 0.6% of all the electricity in the entire world.

“As with all energy-intensive industries, the problem won’t be solved until renewable/low-carbon energy abundance is the global norm,” the company told its customers.

“Bitcoin’s trade has always been disruption. Energy may be its next target.”

The post Ethereum uses same energy as the Netherlands. Here’s how it’ll change appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo owns Bitcoin, Ethereum, and Solana. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin, Ethereum, Solana, and Visa. The Motley Fool Australia owns 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 Bruce Jackson.

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