The Santos Ltd (ASX: STO) share price fell on Monday despite the company not releasing any announcements on the ASX.

At market close, the energy producer’s shares finished 6.03% lower to $7.32 apiece.

This means Santos shares have now lost more than 14% since this time last week.

Let’s take a look at what could be impacting the energy producer’s shares.

Why are Santos shares cooling off?

Investors are offloading the Santos share price following a broader fall across the S&P/ASX 200 Energy (ASX: XEJ) index today.

Comprising 11 companies that operate in the oil, gas and coal sector, the index backtracked 5.34% to 9,574.6 points.

Interestingly, the benchmark energy index is down a mammoth 13% in the past week.

This comes after the Federal Reserve’s decision to hand down a 0.75% interest rate hike that spooked financial markets.

A more aggressive monetary tightening policy to combat high inflation levels sparked worry about an impending recession in 2023.

Furthermore, the West Texas Intermediate (WTI) has dipped 10% from 8 June to currently US$110 per barrel.

With oil prices backtracking, this will likely put a squeeze on Santos’ margins along with its peers.

Shares in fellow rival, Woodside Energy Group Ltd (ASX: WDS) also closed the day 4.86% lower.

Santos share price snapshot

It’s been a rollercoaster 12 months for the Santos share price, registering nil gains for the period.

It’s worth noting that the company’s shares reached a 52-week low of $8.86 on 8 June before tumbling 17% to today’s price.

In terms of market capitalisation, Santos is the second biggest energy company on the ASX with a valuation of approximately $26.24 billion.

The post Why did the Santos share price sink 6% today? appeared first on The Motley Fool Australia.

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More reading

• Why Bega, Fortescue, Santos, and Silver Lake shares are tumbling lower
• ASX 200 midday update: PointsBet jumps, energy shares sink, Vicinity’s upgrade
• 5 things to watch on the ASX 200 on Monday
• Santos share price ‘a compelling opportunity’: fundie
• 2 energy ASX shares to buy while inflation is killing everything else: expert

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

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Looking for dividend shares to buy this week? If you are, then you might want to look at the shares listed below.

Here’s why these ASX dividend shares are rated as buys:

Accent Group Ltd (ASX: AX1)

The first ASX dividend shares to look at is footwear focused retailer, Accent.

It is the company behind brands such as Athlete’s Foot, HYPEDC, Pivot, Platypus, Sneaker Lab, and Stylerunner.

Accent’s shares have been hit hard in 2022 due to tough trading conditions in the retail sector as cost of living pressures hit consumer discretionary spending.

While this is disappointing, analysts at Bell Potter remain positive and appear to see it as a buying opportunity. Its analysts recently reiterated their buy rating and $2.20 price target on the retailer’s shares.

The broker is also forecasting some attractive dividend yields in the coming years. Bell Potter has forecast fully franked dividends of 5.8 cents per share in FY 2022 and then 10.7 cents per share in FY 2023. Based on the current Accent share price of $1.24, this will mean yields of 4.7% and 8.6%, respectively.

National Australia Bank Ltd (ASX: NAB)

Another ASX dividend share to look at is banking giant NAB.

Its shares have also been hammered recently, along with the rest of the big four, amid concerns that rapidly rising interest rates could cause more harm than good for the sector.

One broker that is likely to see this pullback as a buying opportunity is Goldman Sachs. Its analysts currently have a conviction buy rating and $34.17 price target on the bank’s shares.

As for dividends, the broker is forecasting a $1.50 per share dividend in FY 2022 and then a $1.65 per share dividend in FY 2023. Based on the current NAB share price of $26.06, this will mean fully franked yields of 5.75% and 6.3%, respectively.

The post 2 excellent ASX dividend shares that experts rate as buys this week appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 bank shares having such a cracking start to the week?
• 3 ASX 200 bank shares slide to 52-week lows on Friday
• Why brokers think Accent shares are a ‘shoe-in’ for ASX investors
• ‘Stellar performer’: Why this fundie is buying the dip in the NAB share price
• ASX 200 bank shares languish on Thursday despite market lift

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 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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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 Bell Potter, its analysts have a buy rating and $17.53 price target on this lithium miner’s shares. Its analysts are positive on lithium prices and expect supply constraints to keep them higher for the foreseeable future. Bell Potter expects this to underpin significant improvements in cash generation and profits in the coming years. The broker also likes Allkem due to its aim of maintaining a 10% share of supply in a global lithium market experiencing unprecedented growth. The Allkem share price was trading at $9.80 on Monday.

Brambles Limited (ASX: BXB)

A note out of Ord Minnett reveals that its analysts have retained their buy rating and $13.50 price target on this logistics solutions company’s shares. Its analysts believe that the current Brambles share price implies an overly punitive earnings multiple of just 2x EBITDA on the company’s struggling Americas business. This compares to an estimated 12x EBITDA for its other businesses. So, with its Americas operations now starting to show early signs of a recovery, it could be a good time to invest. The Brambles share price is fetching $10.51 today.

Paradigm Biopharmaceuticals Ltd (ASX: PAR)

Another note out of Bell Potter reveals that its analysts have retained their buy rating but trimmed their price target on this biopharmaceutical company’s shares to $1.90. Bell Potter has reduced its valuation to reflect the ongoing correction to biotechnology sector valuations. However, it remains positive and believes upcoming data from the OA-008 osteoarthritis study could represent a significant catalyst. The Paradigm share price was trading at 98 cents on Monday.

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

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• Top broker names 4 ASX lithium stocks to buy now
• Top broker tips Allkem share price to jump 80%
• Mineral Monday: What you need to know about lithium and which ASX shares are cashing in on it
• 5 things to watch on the ASX 200 on Monday
• The lithium and iron ore ASX shares that I like right now: expert

Motley Fool contributor James Mickleboro has positions in 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 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.

You could say Warren Buffett knows a thing or two about investing. He’s been buying equities for decades as Chairman and CEO of Berkshire Hathaway — a conglomerate worth more than $610 billion. Buffett’s personal wealth totals about $100 billion.

Fortunately for the investment community at large, Buffett isn’t shy about sharing his investing expertise. While many believe he has a unique gift for seeing business value, some aspects of his strategy are easy enough for novice investors to copy. Here are four of those straightforward investing strategies you can try today.

1. Invest in the S&P 500

In a 2017 interview, Buffett advised retirement savers to invest consistently in a low-cost S&P 500 index fund. In his words, “I think it’s the thing that makes the most sense practically all of the time.”

S&P 500 index funds invest in S&P 500 stocks. These are the largest and most successful publicly traded companies in the U.S. As a group, they’re not going to make you a millionaire overnight — but they have produced solid growth over time. Historically, the S&P 500 has grown about 7% annually, net of inflation.

S&P 500 index funds are readily available from any brokerage. Some brokerages even support fractional buys on these funds. This is a good option when you’re on a tight budget.

Note that Buffett specifically recommends low-cost funds. These are funds with low expense ratios, which represents how much of your invested capital goes toward fund expenses.

An expense ratio of 0.03%, for example, equates to $3 in fees annually for every $10,000 you’ve invested. The lower the expense ratio, the more of the underlying investment returns flow through to your bottom line.

2. Focus on the long term

You can invest for profits quickly or over time. Buffett follows the latter strategy. He’s said his preferred holding period is forever.

Some stocks are better suited than others for long holding periods. Buffett likes established businesses with strong track records through various economic climates — companies with staying power. Blue-chip companies and S&P 500 stocks generally fit the bill. 

On the other hand, trendy stocks, start-ups, and radical innovators are typically outside Buffett’s wheelhouse. There are opportunities in these categories, but profit-making can be more dependent on trading vs. holding.

3. Look past market turbulence

Buffett is committed to his long-term approach and doesn’t let turbulent markets shake his resolve. When asked for advice on managing through market volatility, Buffett said, “Don’t watch the market too closely.” 

The beauty of long-term investing is that it requires you to do nothing when share prices are falling across the board. Remember that you’ve invested in companies with staying power. As long as those companies haven’t fundamentally changed, waiting is your best move. Keeping your portfolio intact positions you for gains once the down market reverses.

4. Go against the grain

Buffett has famously said his investing goal was to “be fearful when others are greedy and to be greedy only when others are fearful.” In other words, be cautious when the market’s hot, and look for opportunity when the market’s weak.

For Buffett, opportunity often means buying good stocks at lower prices. He did exactly that in the first quarter of 2022 during the big tech sell-off. While other investors were reducing their technology exposure, Buffett picked up 3.7 million shares of Apple, one of his favorite stocks. 

Investing like Buffett

Buffett prefers big companies and long, uninterrupted holding periods. He also likes to operate against prevailing market sentiment. While these methods require perseverance, they’re straightforward enough for any investor to copy.

Once you implement Buffett’s simplest tactics, you can then wait for your gains to emerge over time. In a few decades, you’ll remember this day as the moment making money in the stock market got a lot easier. 

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

The post Warren Buffett approves of these 4 easy investing strategies you can try today appeared first on The Motley Fool Australia.

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• 2 excellent ASX dividend shares that experts rate as buys this week
• Leading brokers name 3 ASX shares to buy today
• Will Westpac shares really pay a 9.6% dividend yield next year?
• Why is the Wesfarmers share price having such a stellar start to the week?
• Could be ‘one of the biggest success stories’: Top broker tips 87% upside for Lovisa shares

Catherine Brock 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 Apple and Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple and Berkshire Hathaway (B shares). 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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After a positive start to the trading week this morning, the Westpac Banking Corp (ASX: WBC) share price slumped in afternoon trading, closing the day even. Westpac shares finished at $19.19 each, the same as Friday’s closing price. That’s slightly better than the S&P/ASX 200 Index (ASX: XJO) though, which closed 0.64% lower today.

But even so, investors might be a little disappointed with how things have gone for this ASX 200 bank share today, particularly as Westpac was in green territory this morning, rising as high as $19.44 a share. But, as we discussed last week, falling share prices give investors a silver lining in rising dividend yields. And Westpac’s current dividend yield of 6.32% is certainly enough to draw attention.

Westpac’s dividends come fully franked too, which is pretty typical for ASX 200 bank shares. If we include the value of these full franking credits, this dividend yield grosses up to 9.03%.

But that is a trailing dividend yield, based on the payouts Westpac has doled out over the past 12 months. So what does the future hold for Westpac’s dividend?

Will Westpac shares pay a 9.6% dividend next year?

Well, as my Fool colleague James covered last week, investment bank and ASX broker Goldman Sachs reckons there is a lot of good news in store for dividend investors when it comes to Westpac shares. Goldman is expecting the bank to continue to increase its dividend per share all the way to FY2024.

Over FY2021, Westpac paid out $1.18 in dividends per share. For FY2022, the bank has already paid a 61 cents per share interim dividend, which was a healthy increase on FY2021’s interim payment of 58 cents per share. Goldman is expecting Westpac’s final dividend for FY2022 to come in at 62 cents per share.

But, going forward, the broker is expecting Westpac to fund a total of $1.29 in dividends per share over FY2023. FY2024 will also see an increase, this time to $1.46 per share.

So if Westpac pays $1.29 in dividends per share in FY2023, what would it mean for investors?

Well, on Westpac’s current share price of $19.19, an annual dividend total of $1.29 would equate to a forward dividend yield of 6.3%. If we factor in those full franking credits, that would gross up to an eye-catching 9.61%.

It gets even better for FY2024, assuming Goldman is accurate with its predictions. If Westpac does indeed pay out $1.43 in dividends per share over FY202, investors would be looking at a forward yield of 7.62% (or 10.89% grossed-up).

Of course, none of this is guaranteed and is just one opinion. But if Westpac does end up following the dividend trajectory Goldman has laid out, it could mean a healthy stream of dividend income for investors over the next few years.

The post Will Westpac shares really pay a 9.6% dividend yield next year? appeared first on The Motley Fool Australia.

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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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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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The Wesfarmers Ltd (ASX: WES) share price outperformed on Monday, despite the company’s silence.

In fact, there’s been no price-sensitive news from the conglomerate since 2 June.

At close of trade, the Wesfarmers share price finished $42.40, 3% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) struggled today, slipping 0.64%.

Let’s take a closer look at what might be going right for the ASX 200 giant.

What’s going on with the Wesfarmers share price?

The Wesfarmers share price took off on Monday alongside the company’s home sector.

The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) closed 2.77% higher, led by the PointsBet Holdings Ltd (ASX: PBH) share price – which finished up 18.14% – and those of many ASX 200 retailers.

On Monday, stock in ARB Corporation Limited (ASX: ARB), City Chic Collective Ltd (ASX: CCX), and Harvey Norman Holdings Limited (ASX: HVN) closed higher by 6.5%, 5.56%, and 4.23%, respectively.

One of only a few ASX 200 consumer discretionary stocks trading in the red today is InvoCare Limited (ASX: IVC). It’s closed the day down 0.68%.

Making Wesfarmers’ Monday gain even more notable is its recent rarity. Today is the first time the stock has gained in close to a fortnight. In fact, it’s fallen 10% since the end of May.

Right now, the Wesfarmers share price is 28% lower than it was at the start of 2022. It has also slipped 26% since this time last year.

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

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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 Harvey Norman Holdings Ltd. and Pointsbet Holdings Ltd. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd. and Wesfarmers Limited. The Motley Fool Australia has recommended ARB Corporation Limited and 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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Lovisa Holdings Ltd (ASX: LOV) shares have tumbled in the past month, but could the company’s fortunes turn around?

The jewellery retailer’s shares closed at $13.10 each on Monday, 1.63% higher. For perspective, the S&P/ASX 200 Index (ASX: XJO) fell 0.62% today.

Let’s check the outlook for Lovisa shares.

Significant upside

Lovisa shares have plunged nearly 17% since market close on 20 May. However, analysts at Morgans are tipping the company’s shares could skyrocket in the future.

The broker has placed an add rating on Lovisa with a $24 price target. That’s an 87% upside on the current share price.

It seems Morgans is optimistic about Lovisa’s prospects due to the company’s global expansion plans.

Analysts said the company could “prove to be one of the biggest success stories in Australian retail”.

In a recent market update, Lovisa revealed it has opened a net total of 59 stores year to date. While 14 stores have closed, 73 new stores have opened.

Since 2020, Lovisa has increased its presence by 168 stores. This includes 87 in Europe, acquired via its Beeline takeover.

In Europe overall, Lovisa has 163 stores while the company is also trading in 31 US states.

The company’s revenue in the first half of FY22 boomed 48.3% to $217.8 million, while gross profit surged 50.5% to $170.7 million.

Monash investors co-founder Simon Shields recently tipped Lovisa’s retail share network could grow from 550 stores to 2000 in the next seven to eight years. Commenting on this outlook, Shields said:

The earnings numbers will go up and the share price will follow.

Share price snapshot

The Lovisa share price has descended 13% in the past year. In the year to date, it has plummeted 36%.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has also lost nearly 13% in the past 12 months.

Lovisa has a market capitalisation of nearly $1.4 billion based on the current share price.

The post Could be ‘one of the biggest success stories’: Top broker tips 87% upside for Lovisa shares appeared first on The Motley Fool Australia.

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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 Australia has recommended Lovisa 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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The S&P/ASX 200 Index (ASX: XJO) is on course to start the week with another decline. In late trade, the benchmark index is down 0.6% to 6,435 points.

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

Bega Cheese Ltd (ASX: BGA)

The Bega share price is down 8% to $4.00. This appears to have been driven by a broker note out of UBS this morning. According to the note, the broker has downgraded the diversified food company’s shares to a neutral rating and cut the price target on them to $4.75. UBS believes that higher input costs are going to stifle Bega’s recovery.

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue share price is down 8.5% to $17.03. Investors have been selling Fortescue and other mining shares today following a pullback in commodity prices. This saw the iron ore price drop a sizeable 7% on Friday night. The S&P/ASX 200 Resources index is down 5.1% this afternoon.

Santos Ltd (ASX: STO)

The Santos share price has dropped 6% to $7.34. Investors have been selling Santos and other energy shares after oil prices sank on Friday night. Traders were selling down oil prices amid concerns that rising rates could cause a global recession and weigh on demand. This has led to the S&P/ASX 200 Energy index falling 5.3% on Monday.

Silver Lake Resources Limited (ASX: SLR)

The Silver Lake share price is down 9% to $1.48. This follows weakness in the gold sector today which has seen the S&P/ASX All Ords Gold index tumble over 5% on Monday. The precious metal pulled back on Friday amid strength in the US dollar.

The post Why Bega, Fortescue, Santos, and Silver Lake shares are tumbling lower 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 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 big four ASX bank shares are outperforming the broader share market today.

Where the S&P/ASX 200 Index (ASX: XJO) has been deep in the doldrums today and is currently down almost 0.7% to 6,431 points, the ASX’s biggest banks are doing noticeably better.

At the time of writing, the Commonwealth Bank of Australia (ASX: CBA) share price is up 0.54% while shares in the National Australia Bank Ltd (ASX: NAB) are trading around 0.4% higher.

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is the best performer of the ASX 200 bank shares, up by 1.18%.

Meanwhile, the Westpac Banking Corp (ASX: WBC) share price is slightly lower in late afternoon trading down just 0.16% at the time of writing.

However, there’s no official news out of any of the big four banks and today’s share price movements reverse only a bit of the damage that the banks have seen in recent weeks.

Pain for the ASX 200 bank shares

In just the last month, there have been some double-digit declines for the major banks.

They have all fallen roughly the same amount in percentage terms, with the Westpac share price falling 18.6% over the past month, and shares in NAB, ANZ and CBA down a respective 16.25%, 15.9% and 16%.

Why such significant share price declines over a short period of time?

Inflation and interest rates

While most experts and investors blame inflation and rising interest rates for the share price falls in the ASX banking sector, it’s not that simple.

For example, analysts at Morgans recognise that higher interest rates could be a benefit for the net interest margins (NIMs) of banks.

If you haven’t heard of the NIM before, it’s the profitability metric showing how much a bank makes on its lending compared to the cost of the funding.

This is a very simplified example, but if the bank had $100,000 in customer savings accounts paying a 1% interest rate, and it had lent out $100,000 at an interest rate of 3%, the NIM would be 2%. Experts are expecting bank NIMs to rise in this environment.

However, one warning from the broker Morgans is that higher interest rates could lead to a worsening situation for the loan books and thereby lead to higher arrears.

Bank dividend yields could also appear less attractive to income-focused investors, which may hurt the valuations of ASX 200 bank shares.

RBA review

However, there was one new piece of financial news that appeared today.

According to reporting by the Australian Financial Review, the Australian Treasurer Jim Chalmers is going to appoint a panel of independent experts to review the central bank.

The newspaper reported that the review wais “likely to consider the composition of the RBA board members, the appointment processes, the 2% to 3% inflation target and the joint statement on the conduct of monetary policy between the treasurer and governor”.

The AFR reported that some experts believed the RBA board should have “more professional economists to challenge the governor and deputy governor on technical monetary policy issues”.

The post Why are ASX 200 bank shares having such a cracking start to the week? appeared first on The Motley Fool Australia.

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• Why is the Temple & Webster share price surging 11% on Monday?
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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 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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The Ethereum (CRYPTO: ETH) price has come charging back from yesterday’s lows of US$943. At that price, the world’s number two token by market cap had shed more than 35% in just one week.

Having gained 13% since this time yesterday to trade at US$1,084, the Ethereum price still remains down 22% over the past seven days. And it’s down a painful 78% from its 16 November record high.

So, what’s going on?

Why is the Ethereum price falling sharply?

Ethereum has come under pressure, along with the vast majority of cryptos, as investors adjust their weightings of risk assets amid fast-rising interest rates.

But it’s not just rising rates battering cryptos and the Ethereum price.

The spectacular failure of the TerraUSD stablecoin and its supporting token Luna last month shook confidence in the entire industry. And last week news emerged that crypto lender Celsius, which offered exceptionally high yields, might not be able to meet its obligations. Celsius has halted withdrawals.

Crypto sharks circle the weakest, leveraged hands

If you’ve invested in Ethereum, you likely have little to fear from crypto sharks, though their actions may in the medium term depress the broader market and the Ethereum price.

Shark traders, as they’re known, use their own computer networks to search blockchains for traders who are holding highly-leveraged and potentially weak positions.

According to Omakase, an anonymous contributor to the Sushi decentralised exchange (as quoted by Bloomberg):

In a downtrend environment, where yields are harder to access, what we are going to see is some actors utilise some more aggressive strategies, and that may not be necessarily good for the community… The environment has become more player versus player…

Most protocols offer a 10-15% liquidation fee. Triggering enough liquidations would cause a liquidation cascade where a motivated actor could simply hold a short position in order to profit for the subsequent secondary decrease.

If you bought Ethereum outright, the sharks won’t be circling your holdings.

Instead, they’re looking for leveraged traders in the decentralised finance (DeFi) space. That’s where people can borrow and lend cryptos from other traders without going through traditional banks.

The collateral used is other cryptos, like Ethereum. That means if the Ethereum price falls, so too does the value of their collateral. Should their collateral value fall enough, this triggers a liquidation, for which the successful shark trader receives a fee.

Blockchain analytics firm Nansen said that similar shark trading behaviour may have “contributed to the collapse of the TerraUSD stablecoin”.

However, Nathan Worsley, who searches for crypto traders on the verge of liquidation to earn the commission for liquidating them, defends the practice.

According to Worsley (courtesy of Bloomberg):

I would push back on classifying this as an attack. The reason is because without liquidations, you can’t have a lending market. So even though no one enjoys being liquidated, it’s essential that people do get liquidated in order to make the market and protect the protocol from insolvency.

The post Ethereum price collapses 35% in a week. Are crypto sharks to blame? appeared first on The Motley Fool Australia.

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More reading

• Why Bitcoin, Ethereum, and Dogecoin dropped and popped in the last 24 hours
• 3 reasons Bitcoin, Ethereum and Solana just hit their lowest levels this year
• Can the upcoming merge save the Ethereum price from further destruction?
• The Ethereum price just plummeted 17%. What’s going on?
• Could cryptos be facing an upcoming wave of institutional selling?

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 Ethereum. The Motley Fool Australia has positions in and has recommended Ethereum. 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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