The Encounter Resources Ltd (ASX: ENR) share price is rocketing on Thursday. This comes after the company announced it has received positive assay results over the Sandover project in the Northern Territory.

At the time of writing, the exploration and resource development company’s shares are up 15.38%, trading at 15 cents apiece.

What did Encounter announce?

The company has confirmed high-grade copper mineralisation at Sandover.

In today’s release, Encounter advised that recent surface sampling and mapping have returned up to 20.9% copper mineralisation. This is spread across 4 separate areas around 6km apart at the Sandover project.

Encounter noted each site comprised a red-bed sandstone sequence with multiple, narrow grey shale units containing copper oxide mineralisation.

The next steps will see the company engage with experts to conduct further on-ground mapping and sampling activities. Planned to start in March/April 2022, the exploration program will focus on identifying where these units intersect along the basin forming structures. The company believes these areas have the potential to host major mineral deposits.

Management commentary

Encounter managing director Will Robinson said:

The confirmation of outcropping high-grade copper over a large area is a promising start to exploration at Sandover.

Sandover covers a Zambian copper belt aged, sub-basin on the southern margin of the Georgina Basin, approximately 170km north of Alice Springs. Access is excellent with the Stuart Highway and Ghan railway extending through the western margin of the project. Further areas of interest have been identified at Sandover and will be sampled at the start of the 2022 field season.

We are engaging with experts in Zambian style copper deposits to assist in the design of exploration programs to fast track this emerging copper opportunity in the Northern Territory.

About the Encounter share price

While the Encounter share price has accelerated today, the same cannot be said for the past year. In the last 12 months, the company’s shares are down roughly 3%, and almost 8% lower for 2021.

Encounter is a small-cap ASX share, valued at around $47.52 million. The company has approximately 316.82 million shares outstanding.

The post Encounter Resources (ASX:ENR) share price blasts 15% higher on copper update appeared first on The Motley Fool Australia.

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• Here’s why the IGO (ASX:IGO) share price is not going anywhere today
• CBA (ASX:CBA) share price up amid another loan rate hike
• ASX 200 (ASX:XJO) midday update: CSL sinks, Qantas’ $1.1bn+ first half loss
• This Bitcoin (CRYPTO:BTC) crash is a Christmas gift for the rich
• Why is the Scentre (ASX:SCG) share price climbing today?

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 Bruce Jackson.

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The Scentre Group (ASX: SCG) share price is in the green this morning despite no news having been released by the company.

Though, it might be word from the company’s real estate investment trust (REIT) peers that has boosted the market’s sentiment for the retail property group.

Right now, the Scentre share price is $3.12, 0.65% higher than its previous close.

However, earlier today the REIT’s stock reached $3.25, representing a 4.8% gain.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently down 0.33%.

Let’s take a look at what might be helping drive the value of Scentre’s shares higher on Thursday.

Scenter share price gains on Thursday

The Scentre share price is on the way up alongside those of Centuria Industrial REIT (ASX: CIP) and Vicinity Centres (ASX: VCX) today.

Both Centuria and Vicinity’s stock is being boosted by news their asset valuations have increased.

Centuria has led the charge, boasting a valuation increase of 9.6%, or $281 million.

Meanwhile, Vicinity announced a preliminary asset valuation increase of $309 million – a 2.2% boost to its book values.

Right now, the Vicinity share price is 1.59% higher, while that of Centuria is up 1.01%.

Though, those gains aren’t the ones leading the S&P/ASX 200 A-REIT Index‘s (ASX: XPJ) 1.15% surge.

The Stockland Corporation Ltd (ASX: SGP) share price is leaving those of its peers in the dust today. It has soared 3.75% at the time of writing.

The company’s stock is being driven higher on news of its 2021 final dividend, which will see 12 cents deposited into shareholders’ pockets for every security they hold in the REIT.

As The Motley Fool Australia reported this morning, that sees Stockland’s total dividends for 2021 nearing pre-COVID-19 levels.

Thus, the Scentre share price might be being boosted by positive sentiment surrounding the ASX’s REIT sector today.

Today’s increase brings its year to date gains to 12%. It has also increased 3% since this time last month.

The post Why is the Scentre (ASX:SCG) share price climbing today? 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 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 IGO Ltd (ASX: IGO) share price is frozen today at $10.63 per share.

The S&P/ASX 200 Index (ASX: XJO) resource explorer and producer requested a trading halt today “pending an announcement in relation to a potential acquisition“.

What other ASX resource share is frozen today?

Not coincidentally, the Western Areas Ltd (ASX: WSA) share price is halted alongside the IGO share price today as well.

In its ASX announcement this morning, Western Areas said it was requesting the pause in trading “pending an announcement by the company regarding a potential change of control transaction involving the company”.

The Motley Fool first reported on early news of IGO’s interest in acquiring rival Western Areas in exchange for shares back on 19 August.

At the time IGO acknowledged its interest, saying, “IGO confirms that it is in preliminary discussions with Western Areas in relation to a change of control proposal and the basis upon which engagement and due diligence could proceed.”

The IGO share price tumbled 6% that day while Western Areas shares leapt 13% higher.

Now, as the Australian Financial Review reports, IGO has “agreed an all-cash takeover offer” for Western Areas. “It is understood the bid values Western Areas at more than $3.30 a share.”

Western Areas was trading for $3.24 when markets closed yesterday.

According to the AFR, “IGO’s expected to fund the bid with some new debt and existing cash reserves. The bid would value Western Areas at more than $1.1 billion. Western Areas is expected to tell shareholders to accept the offer.”

Stay tuned!

IGO share price snapshot

The IGO share price has been charging higher over the past 12 months, up 66%. By comparison the ASX 200 has gained 9% since this time last year.

Over the past month IGO shares are up 8%.

Earlier this month, broker Citi upgraded the company’s shares to a buy rating from neutral with a target for the IGO share price of $12.40.

The post Here’s why the IGO (ASX:IGO) share price is not going anywhere today appeared first on The Motley Fool Australia.

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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 Commonwealth Bank of Australia (ASX: CBA) share price is currently up, slightly. Australia’s biggest bank increased its interest rate yet again. That’s despite the S&P/ASX 200 Index (ASX: XJO) being down more than 0.10%.

Interest rates are going higher at the big four bank for both owner-occupiers and investors for the fourth time in the last several weeks.

CBA hikes interest rates

For owner-occupiers, CBA’s fixed rate increased by 0.05% from 2.49% to 2.54%. The 3-year fixed rate rose 0.15% from 2.99% to 3.14%. The 4-year fixed rate grew 0.25% from 3.09% to 3.34% according to RateCity.

To put into context how much the rates have changed, since 14 October, Rate City notes CBA’s 3-year rate has increased by 0.95%, or 95 basis points.

Whilst today’s increase is not large, RateCity.com.au research director, Sally Tindall commented that the hikes are adding up:

The spike in the cost of funding has sent fixed rates soaring, with both CBA and Westpac hiking fixed rates four times in the last two months. As a result, CBA’s 4-year rate has risen by over a full percentage point in this time.

CBA’s fixed rates with terms of three years and more are now higher than pre-pandemic levels.

These fixed rates hikes aren’t isolated to the big four banks. The rate rises are coming in across the board from lenders big and small and we expect them to continue.

Anyone in CBA’s queue for a fixed rate who didn’t pay a rate lock fee will be particularly grumpy at today’s news.

How much will borrowers be paying now?

According to RateCity, the average borrower taking out a $500,000, 3-year fixed rate loan with CBA today will be paying $250 more a month than someone who took out the same loan two months ago.

In other words, they’ll have to pay a total of $3,000 a year extra, which is a sizeable amount of most Aussie budgets.

Global interest rates are heading higher too

The US Federal Reserve has signalled that it’s going to be removing emergency support from the economy even sooner than previously expected.

In the most recent Federal Open Market Committee (FOMC) statement, it was noted that the progress on vaccinations and indicators of economic activity and employment have continued to strengthen. It’s expecting further economic activity gains and strong employment, as well as a reduction of inflation.

The Committee decided to reduce the monthly pace of its net asset purchases by US$20 billion for Treasury securities and US$10 billion for agency mortgage-backed securities. COVID-era bond purchases are planned to end in March.

As reported by various media around the world, including Reuters, there could be as many as three rate hike of 0.25% rises by the end of 2022.

The Fed Chair Jerome Powell said:

The economy no longer needs increasing amounts of policy support. In my view, we are making rapid progress toward maximum employment.

CBA share price snapshot

Despite the 10% drop of CBA shares over the last month, it is still up 16% in 2021.

The post CBA (ASX:CBA) share price up amid another loan rate hike appeared first on The Motley Fool Australia.

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• ASX 200 (ASX:XJO) midday update: CSL sinks, Qantas’ $1.1bn+ first half loss
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• 5 things to watch on the ASX 200 on Thursday
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• Here are the 3 most heavily traded ASX 200 shares this Wednesday

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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At lunch on Thursday, the S&P/ASX 200 Index (ASX: XJO) is off its intraday lows but still trading lower for the day. The benchmark index is currently down 0.2% to 7,312.4 points.

Here’s what is happening on the ASX 200 today

CSL share price sinks after completing institutional placement

The CSL Limited (ASX: CSL) share price is sinking following the completion of its institutional placement. The biotherapeutics giant raised a total of US$4.5 billion (A$6.3 billion) at A$273.00 per new share. This is a discount of 8.2% to its last close price. Management advised that the placement received strong support from existing shareholders and new investors. The proceeds will support the acquisition of Vifor Pharma for US$12.3 billion (A$17.2 billion).

Qantas market update

The Qantas Airways Limited (ASX: QAN) share price is falling today following the release of the airline operator’s market update. CEO Alan Joyce revealed that that Qantas has faced “one of the worst halves of the entire pandemic.” As a result, the company is expecting to post a loss exceeding $1.1 billion during the first half. One positive, though, is that Qantas’ balance sheet has improved during the half despite this.

BHP-Woodside deal given ACCC thumbs up

The merger of the BHP Group Ltd (ASX: BHP) petroleum assets with Woodside Petroleum Limited (ASX: WPL) was given a boost today. This morning the Australian Competition and Consumer Commission (ACCC) revealed that it will not oppose the proposed merger. ACCC chair Rod Sims commented: “We found that post-acquisition, Woodside would continue to face competition from a range of suppliers of domestic gas, including major producers Chevron and Santos, and from several other smaller suppliers including Shell and ExxonMobil.”

Best and worst ASX 200 performers

The best performer on the ASX 200 on Thursday has been the Mesoblast limited (ASX: MSB) share price with a 12% gain. This follows an update on its Phase 3 program of rexlemestrocel-L in patients with chronic low back pain (CLBP). The worst performer has been the CSL share price with an 8% decline following its capital raising.

The post ASX 200 (ASX:XJO) midday update: CSL sinks, Qantas’ $1.1bn+ first half loss appeared first on The Motley Fool Australia.

More reading

• CBA (ASX:CBA) share price up amid another loan rate hike
• BHP (ASX:BHP) share price slips as ACCC gives all-clear for Woodside deal
• CSL (ASX:CSL) share price down 8.5% after raising US$4.5bn
• Qantas (ASX:QAN) share price on watch after ‘one of the worst halves of the entire pandemic’
• Qualitas (ASX:QAL) shares are hitting the ASX boards today following its IPO

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. owns and has recommended CSL Ltd. 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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Bitcoin (CRYPTO: BTC) has sunk 25% since its peak just over a month ago.

The sell-off seemed to be triggered by worries that it has shifted from an inflation-resistant safe haven to a risk asset that correlates to the stock market.

And with volatile commodities like cryptocurrencies, once a few people start selling, others follow, trying to stop further losses.

“The recent selloff was triggered by a wider risk-off sentiment that also impacted many areas of global stock markets,” said DeVere Group chief Nigel Green.

“It occurred as inflation is running hot and, therefore, encouraging central banks to tighten monetary policies, putting at risk the liquidity that has benefitted many asset classes, including Bitcoin.”

Stop giving Bitcoins away

Green warned investors to stop flogging off their Bitcoins, because it’s only making already wealthy people even richer.

“Wealthy, long-term crypto investors typically benefit from spooked panic-sellers by buying their digital currencies on the cheap to enhance their investment portfolios,” he said.

“Doesn’t a Bitcoin price dip seem especially beneficial to those such investors during these times of worryingly high inflation?”

He added that deep-pocketed cryptocurrency investors always buy the dips.

“This is because they know that digital, global, borderless, decentralised money is, clearly, the future,” said Green.

“Bitcoin has almost doubled in value since January 2021. How many other investments can say that?”

Green cited the fact that the third-largest holder of Bitcoin bought more than US$150 million worth during the current correction.

Yes, 2021 was as volatile as any other year for cryptocurrency’s flag bearer. But this up and down nature is taken advantage of by those who top up their wallets.

“Could this explain why so many of them send out ‘warning shots’ about selling crypto when things are a bit turbulent on social media? It seems very likely,” said Green.

“Those Bitcoin panic sellers are practically giving away their cryptocurrencies to wealthy buyers who accumulate, accumulate, accumulate.”

Bitcoin will return as a safe haven

Despite its behaviour shifting in recent weeks, in the long run Green believes Bitcoin will return to its role of a safe haven against inflation.

This is because Bitcoin is forever limited to a maximum circulation of 21 million coins.

“In this inflationary period, Bitcoin has outperformed gold, which has been almost universally hailed as the ultimate inflation hedge – until now.”

Green advised investors to hold onto their Bitcoin with a long-term perspective.

“Prices of Bitcoin and other cryptos can drop by 10% or more in a matter of hours. Indeed, they often do. This is why you need to have a properly diversified portfolio to mitigate risks,” he said.

“History shows that Bitcoin gains have been enormous for those who hold.”

The post This Bitcoin (CRYPTO:BTC) crash is a Christmas gift for the rich appeared first on The Motley Fool Australia.

More reading

• World first: Aussie Sushi Sushi store on market for $1 million in Bitcoin
• Is Bitcoin a good inflation edge?
• 3 reasons this crypto veteran thinks Bitcoin (CRYPTO:BTC) is positive for the environment
• Aussie crypto sector tipped to be worth $68 billion this decade
• After hitting new record highs in 2021, what’s next for Bitcoin (CRYPTO:BTC) in 2022?

Motley Fool contributor Tony Yoo owns Bitcoin. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Bitcoin. 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 Corporate Travel Management Ltd (ASX: CTD) share price will be one to watch on Friday when it returns from its trading halt.

This follows news that a number of leading brokers have responded particularly positively to its acquisition plans.

Why is the Corporate Travel Management share price halted?

On Wednesday, the Corporate Travel Management share price was placed into a trading halt whilst it sought to raise $100 million via a $75 million institutional placement and a $25 million share purchase plan.

The $75 million placement will be undertaken at $21.00 per new share, which represents a 5.8% discount to the Corporate Travel Management share price at the close of play on Tuesday.

The company is raising these funds after entering into a binding agreement to acquire the Australia and New Zealand corporate and entertainment travel businesses of Helloworld Travel Limited (ASX: HLO).

Based on the performance of these businesses prior to the pandemic, management expects the deal to be approximately 3% earnings per share accretive excluding synergies and 7% including full run-rate synergies.

Broker response

In response to the news, this morning the team at Macquarie Group Ltd (ASX: MQG) upgraded Corporate Travel Management’s shares to an outperform rating with an improved price target of $24.70.

Based on the latest Corporate Travel Management share price, this implies potential upside of just under 11% for investors.

According to the note, the broker is a fan of the deal and believes the acquisition will be complementary to the company’s existing operations. In light of this and its trading update, Macquarie has upgraded its earnings per share forecasts through to FY 2024.

Elsewhere, the team at UBS has retained its buy rating and lifted its price target to $27.75.

UBS notes that the acquisition provides the opportunity to build further scale in its core Australian operations. Overall, the broker feels the company is “well positioned to leverage the expected recovery in 2022 and beyond.”

The post The Corporate Travel (ASX:CTD) share price will resume trading tomorrow. Here’s what you need to know appeared first on The Motley Fool Australia.

More reading

• Why Challenger, Helloworld, Lake Resources, and Strike Energy are charging higher
• ASX 200 (ASX:XJO) midday update: CSL upgraded, Westpac AGM update
• Helloworld (ASX:HLO) share price surges 10% on $175m asset sale
• Why is the Corporate Travel Management (ASX:CTD) share price halted?
• Why has the Webjet (ASX:WEB) share price had such a lousy start to December?

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. owns and has recommended Helloworld Limited. The Motley Fool Australia owns and has recommended Helloworld Limited. The Motley Fool Australia has recommended Corporate Travel Management Limited 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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The Immutep Ltd (ASX: IMM) share price is rising today after news of a deal with a European company.

Shares in Immutep were swapping hands at 47.5 cents in early morning trade, up 1.06%.

Let’s take a look at what may be influencing the Immutep share price today?

What did Immutep announce?

Immutep is a biotech company developing a treatment for autoimmune diseases and cancer.

Today, the company advised it has signed an agreement with Northway Biotech to manufacture an antibody suppressor known as IMP761.

IMP761, currently at the preclinical stage, works to silence memory T cells that gather at disease sites.

The company has tested the product against autoimmune diseases including arthritis to prove the concept.

As part of the agreement with Northway Biotech, the European manufacturer will produce IMP761 in large scale bioreactors.

Once this upscale is complete, the product will be used for Immutep’s clinical trial of IMP761.

Immutep said the production would take place at Northway’s facility in Vilnius, Lithuania. In the future, the agreement may be extended to include commercial supply.

Comment from management

Commenting on the agreement that may be driving the Immutep share price higher, CEO Marc Voight said:

We are very excited to be partnering with Northway Biotech to develop a GMP manufacturing process for IMP761.

We are very pleased to be moving IMP761 towards clinical trials.

Immutep share price snap shot

The Immunotep share price has climbed 10% in the past 12 months, rallying 13% year to date.

The biotech company’s shares dived nearly 21% in the past month but are holding steady in the past week.

In comparison, the S&P/ASX 200 Health Care (ASX:XHJ) index is down 5% today and has risen nearly 2% in the year to date.

Immutep has a market capitalisation of more than $405 million at the time of writing.

The post Here’s why the Immutep (ASX:IMM) share price is up today appeared first on The Motley Fool Australia.

More reading

• Immutep (ASX:IMM) share price slips amid trial safety update

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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Bitcoin (CRYPTO: BTC) is currently trading for US$48,993 (AU$68,413). That means if you’re sitting on 14.6 bitcoins you could be the proud owner of the Sushi Sushi outlet, located on Cavill Avenue in Surfers Paradise, Queensland.

If you’re looking to pay the $1 million in cash instead of Bitcoin, you’re out of luck. The Sushi Sushi retailer is the first in the world to offer its store for sale for crypto.

Prime location and an NFT

The prospective buyer will get more than just the bricks and mortar location for their Bitcoin. The company’s CEO, Scott Meneilly, a self-proclaimed crypto enthusiast, is also throwing in a non-fungible token (NFT).

As The Australian reports, he’s hoping “a craze in ‘Bored Apes’ and ‘Crypto Pugs’ will translate into real-world success”.

The future owner won’t have to run the store, that’s all taken care of. For 14.6 bitcoins (at current prices) they will receive all future profits, and not be liable for any losses.

Meneilly said that despite the fact NFTs are “sweeping the globe” they remain elusive to most people.

According to Meneilly:

We wanted to put a flag in the ground and move as quickly as the technology space is moving, and selling a store with crypto was a great way to let people know we are serious about playing in this space. We see a massive opportunity in using blockchain, and we felt that selling a franchise store was a great place to start.

Meneilly added: “There are billions of dollars in crypto currencies and people are looking to use their crypto and transfer that wealth into more traditional investment opportunities.”

Bitcoin and cryptos going mainstream

In 2021, Bitcoin and the wider world of altcoins took some big steps towards mainstream adoption.

Ian Lowe, CEO of crypto wealth platform Dacxi, told The Motley Fool: “Cryptocurrency’s role is evolving. Our research shows that the vast majority, 56%, of investors in Australia are investing in cryptos with long-term goals in mind.”

With this evolving role for Bitcoin and altcoins in mind, on 3 November Commonwealth Bank of Australia (ASX: CBA) became the first Aussie bank to offer its customers the ability to buy, sell and hold cryptocurrencies via CommBank’s app.

Customers can trade up to 10 selected cryptos including, of course, Bitcoin.

The post World first: Aussie sushi restaurant on market for $1 million in Bitcoin appeared first on The Motley Fool Australia.

More reading

• Is Bitcoin a good inflation edge?
• 3 reasons this crypto veteran thinks Bitcoin (CRYPTO:BTC) is positive for the environment
• Aussie crypto sector tipped to be worth $68 billion this decade
• After hitting new record highs in 2021, what’s next for Bitcoin (CRYPTO:BTC) in 2022?
• Bitcoin (CRYPTO:BTC) and Ethereum fall hard again. What’s going on?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin. 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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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.

Gas fees — or the fees paid to process and validate transactions in a crypto ecosystem — have become a huge problem for the Ethereum (CRYPTO: ETH) blockchain. What was once an annoyance is now a very real cost, with transactions costing $100 or more just for simple acqusitions. 

Gas fees for the proof-of-work blockchain are a standard feature, but for Ethereum they’re starting to drive developers and users to other cryptocurrencies. Until a transition to a proof-of-stake transaction process is completed in 2022, gas fees will be high and Ethereum doesn’t have a great answer to cryptocurrencies offering lower fees and faster transaction times. And these alternative cryptocurrencies are Ethereum’s biggest competition. 

Gas as a leading indicator

The high cost of gas fees earlier this year was initially a positive sign for Ethereum. It meant there was so much demand on the blockchain that miners could charge high fees to complete transactions. High fees are correlated with high demand, and more demand on a crypto blockchain is a good thing, or so it would seem. 

The problem is that high-enough gas fees will push projects to lower-cost networks. Non-fungible token (NFT) projects are booming on Solana (CRYPTO: SOL) as a result of lower transaction costs and an improving suite of tools for developers. High-value NFTs are still on Ethereum, but a project selling an NFT for $100 would make little sense on Ethereum today due to gas fees potentially costing as much as the NFT itself. 

This brings us to the problem for Ethereum ahead of a proof-of-stake upgrade. The price of gas is high, but if the price of gas falls, it would likely be an indicator that transaction volume is down because users are moving transactions elsewhere. You can see below that transaction volume is actually flat over the past six months, despite more people getting involved in crypto. For perspective, Coinbase (NASDAQ: COIN) said that its number of monthly transacting users has jumped nearly 4x in the last year from 2.1 million to 7.4 million in the third quarter of 2021.

Ethereum average gas price data by YCharts.

This is a Catch-22 for Ethereum. If gas fees are high, it’s an indication of high demand, but if gas fees go down, it could indicate that crypto developers and users have moved elsewhere, taking their demand with them. 

The developer challenge

I don’t think there will be one cryptocurrency to rule them all, long term. Some projects will live on one blockchain while others will live on another. But Ethereum had a clear advantage over upstarts like Solana and Cardano (CRYPTO: ADA) as recently as this summer, and now smaller cryptocurrencies are catching up. 

If developers move their projects to a different crypto blockchain, it will undermine the value of Ethereum. As someone who has bought NFTs on Ethereum and Solana, I would prefer a Solana project over an Ethereum project in a heartbeat. The longer that gas fees are high, the more people will agree with that assessment. 

Crypto’s utility moment

At a time when more and more people are coming on board with cryptocurrency and NFTs, and other projects are finding real utility in the market, Ethereum is facing transaction costs that are untenable in the long term. That’s an indication of high demand on the network, but it also means that competitors will be selling themselves as lower-cost blockchains, and that’s a compelling feature for those new to cryptocurrency today. 

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

The post Gas fees could be Ethereum’s kryptonite appeared first on The Motley Fool Australia.

More reading

• What crypto investors should know about these ‘Ethereum killers’
• Aussie crypto sector tipped to be worth $68 billion this decade
• Ethereum (CRYPTO:ETH) is up 419% in 2021. Here’s what’s ahead for 2022
• Bitcoin (CRYPTO:BTC) and Ethereum fall hard again. What’s going on?
• After a wild 2021, what can crypto investors expect in 2022?

Travis Hoium owns Ethereum and Solana. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Ethereum. 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.

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

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