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The Pilbara Minerals Ltd (ASX: PLS) share price is soaring today after the lithium miner’s CEO made some bullish comments.

At the time of writing, Pilbara Minerals shares are up 8.13% at $3.46 apiece.

Pilbara Minerals is one of the biggest lithium miners on the ASX, with a market capitalisation of $9.5 billion, according to the ASX.

Lithium prices expected to remain strong

The company is currently seeing very high lithium prices, which is helping to push up the Pilbara Minerals share price.

During the first half of FY22, the company achieved an average selling price of around US$1,250 per dry metric tonne.

Pilbara Minerals said that demand for and pricing of lithium chemicals and spodumene concentrate increased significantly during the period, resulting in record revenue of $291.7 million.

However, on the date that Pilbara Minerals released its HY22 result (23 February 2022), it said that after the end of the half-year, the price had continued to increase. Price reporting agencies indicated spot spodumene concentrate prices were in the range of between US$3,750 per dry metric tonne to US$4,500 per dry metric tonne.

However, the outgoing CEO of Pilbara Minerals, Ken Brinsden, said prices were likely to stay strong. The Australian Financial Review reported Brinsden as saying:

If you’re the average car or EV maker, if you’re a cell maker today, you’re just about hitting the panic button because value-added chemicals in the lithium industry have gone through the roof.

It’s happened because the carmakers were asleep at the wheel, they were not paying attention to the raw materials supply base, they are too far removed. Inevitably [demand] was coming back, and today they’ve been caught short, and they’re going to have to pay through the nose to be able to access raw materials. It’s going to be a big issue for them for quite some time to come.

[It’s] very, very healthy pricing and likely to stay strong. A mine takes five to seven years to get up and running. You can build a chemical plant and a car plant in less than two years…so it’s going to take quite some time for the mines to catch up.

How long could this go on for?

Rio Tinto Limited (ASX: RIO) says lithium demand is forecast to grow by 25% to 35% per annum over the next decade, with a significant supply-demand deficit expected in the second half of this decade.

Brinsden suggested it will be some time before supply catches up, according to the AFR, with electric vehicle demand expected to keep rising. He said:

You’ve got no choice but to lay that incentive price on the table, otherwise the raw materials supply base will not grow. Honestly, the raw material guys, at least for the foreseeable future, are going to keep winning the margin because they are so far behind as compared to where demand is today.

Meanwhile, Pilbara Minerals gave a ‘mid-stream’ project update yesterday. The completed scoping update provided preliminary support for the construction of a demonstration-scale chemicals facility at Pilgangoora, producing value-added lithium phosphate salts via an “innovative refining process”.

Pilbara Minerals share price snapshot

With today’s gains factored in, the Pilbara Minerals share price is up 28% over the past month and 220% over the past year.

It has also risen by 8% this year to date and 11% in the past week.

The post Own Pilbara Minerals shares? Here’s why the CEO is so bullish on lithium prices appeared first on The Motley Fool Australia.

More reading

• The US is backing Aussie critical minerals projects, and these ASX mining shares could be set to reap the rewards
• Here’s why the Pilbara Minerals (ASX:PLS) share price is spiking today
• These 3 ASX 200 shares are topping the volume charts on Wednesday
• Buying ASX shares to cash in on the EV and battery metals craze? Read this
• These 3 ASX 200 shares are topping the volume charts on Monday

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 Ethereum (CRYPTO: ETH) price started off the month trading for US$2,737.

Ethereum finished March worth US$3,424, according to data from CoinMarketCap.

That puts the Ethereum price up an impressive 25% in March. And it went a long way to erasing the painful losses suffered in the first 2 months of the year. As of last night, the world’s number 2 token by market cap was down 12% year-to-date.

So, what moved the Ethereum price in March?

Like its big brother Bitcoin (CRYPTO: BTC), the Ethereum network still relies on a proof of work (PoW) consensus protocol. And that method uses a tremendous amount of energy, as we covered here today.

The Ethereum price thus got a healthy lift in mid-March when the European Union voted against imposing a virtual ban on crypto miners using PoW protocols.

The coming ‘Merge’

Now Ethereum is planning on shifting to a proof of stake (PoS) protocol later this year. The cryptos designers have been busily testing the process.

PoS will see Ethereum transactions become faster, cheaper, and – perhaps most importantly in a world intent on decreasing carbon emissions – a lot less energy intensive.

The coming shift also has some crypto analysts predicting a big move higher for the Ethereum price.

In March, Kain Warwick, founder of derivatives trading system Synthetix, went so far as to forecast Ethereum will almost triple from its current levels. He expects to see it at US$10,000 before the end of 2022.

According to Warwick:

New people wanting to swap dollars for Ethereum and build on top were finding the fees completely prohibitive. But there has been so much work done on scaling the Ethereum blockchain that there is a really credible case for new entrants where it is viable for them to transact.

The upgrade to PoS, also called ‘The Merge’ is expected to move forward by mid-year.

On the first day of April, the Ethereum price is down 4.5% to US$3,267.

The post The Ethereum price rocketed 25% higher in March. Here’s why appeared first on The Motley Fool Australia.

More reading

• Here’s what ESG investors should know about cryptos like Bitcoin
• Why Ethereum and Dogecoin are dropping today
• This cryptocurrency just exploded 30% higher, overnight
• Ethereum price outpaces Bitcoin as crypto investors eye ‘The Merge’
• Why this lesser-known crypto left Bitcoin in the dust this week

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin and Ethereum. 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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The BHP Group Ltd (ASX: BHP) share price went up by 10.9% in March 2022. The resources giant outperformed the S&P/ASX 200 Index (ASX: XJO).

During March, the ASX 200 went up by 6.4%. That means that the resources giant outperformed the ASX 200 by 4.5% over the month.

What could have helped the BHP share price?

March was dominated by news of the Russian invasion of Ukraine.

BHP produces several commodities including iron ore and petroleum. The iron ore price rose from US$142 per tonne to around US$150 over the month.

The petroleum price rose amid concerns regarding global supply as sanctions were applied to Russia.

Other commodity prices remain high, such as coal. BHP also produces nickel and copper, which are seeing growing demand as the world looks to decarbonise.

The company paid its interim dividend on 28 March 2022, after the recent FY22 half-year result.

BHP didn’t announce any market-sensitive news during March that may have impacted the BHP share price. However, the company did release a presentation after the market had closed on 28 February, explaining its HY22 performance and the long-term outlook.

HY22 highlights and outlook

The commodity giant said that it had a strong first half of production, with disciplined cost control. Its earnings before interest, tax, depreciation and amortisation (EBITDA) margin improved to 64%.

BHP decided to pay an interim dividend of US$1.50 per share, which represented a payout ratio of 78%.

In terms of the outlook, BHP said that it could benefit from the power of scale and compound growth.

The ASX mining share stated that “population growth, decarbonisation and rising living standards will drive demand for energy, metals and fertilisers for decades.”

BHP said the world population is expected to grow from 7.7 billion to 8.5 billion by 2030. This is expected to lead to increasing demand, with world GDP growing from US$87 trillion to US$161 trillion by 2030. Capital expenditure is expected to grow from US$23 trillion to US$37 trillion by 2030.

Commodity comments

BHP also said in the presentation that it is actively managing its portfolio for long-term value creation through the cycle.

With iron ore, it said that it’s the lowest cost major globally, with no new hubs needed for at least a decade.

It described its metallurgical coal, which is used to make steel, as a world-class resource with high-quality coal that benefits from “sustained price differentials”.

The resources business has divested some of its commodities. It will soon divest its petroleum assets to Woodside Petroleum Limited (ASX: WPL). It is also in the process of selling its energy and lower quality metallurgical coal operations.

BHP is also looking to increase exposure to future-facing commodities including copper, nickel and potash.

The company ended its presentation by saying that it has levers to deliver value growth, “increasing options through productivity, internal resources and external opportunities across varying time horizons.”

It claimed to grow shareholder value (meaning things like dividends and the BHP share price) through “operational excellence, optimal excellence, optimal allocation of capital and sustainably creating high returns.”

The post The BHP share price went up over 10% in March appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Allkem jumps on lithium pricing update: Domain to acquire Realbase
• These were the best performing ASX 200 shares in March
• These were the worst performing ASX 200 shares in March
• 5 things to watch on the ASX 200 on Friday
• The ASX 200 just had its longest winning streak since 2017. What’s doing?

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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) has fought back from a poor start and is edging higher. At the time of writing, the benchmark index is up 0.1% to 7,506.3 points.

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

Allkem Ltd (ASX: AKE)

The Allkem share price is up 8% to $12.35 following the release of a lithium pricing update. That update reveals that strong market conditions continue to positively impact lithium prices. So much so, for the June quarter, Allkem expects the average price received for lithium carbonate to be US$35,000 per tonne FOB. This is up from US$27,236 per tonne during the March quarter. It is also more than triple the US$11,095 per tonne commanded during the first half.

Argosy Minerals Limited (ASX: AGY)

The Argosy Minerals share price is up 5% to 49.5 cents. This morning the lithium developer provided a progress update for its Rincon Lithium Project in Argentina. According to the release, Argosy is on track to commence production of 99.5% battery quality lithium carbonate product from mid-2022. This bodes well for Argosy given Allkem’s announcement.

Firefinch Ltd (ASX: FFX)

The Firefinch share price is up 9% to $1.14. This follows the receipt of US$130 million in funding from its joint venture partner Jiangxi Ganfeng Lithium for the Goulamina Lithium Project in Mali. Combined with debt funding provided by Ganfeng, the Goulamina Lithium Project is expected to be substantially funded through the development phase.

Tabcorp Holdings Limited (ASX: TAH)

The Tabcorp share price is up 3% to $5.50. This morning the team at Goldman Sachs retained its buy rating and $6.20 price target on the gambling company’s shares. In response to its demerger update, the broker said: “We continue to see this [demerger] as a key catalyst in unlocking significant shareholder value.”

The post Why Allkem, Argosy Minerals, Firefinch, and Tabcorp shares are charging higher appeared first on The Motley Fool Australia.

More reading

• Tabcorp (ASX:TAH) share price jumps as possible legal action threatens $11b demerger
• Allkem (ASX:AKE) share price leaps 6% following lithium pricing update
• ASX 200 (ASX:XJO) midday update: Allkem jumps on lithium pricing update: Domain to acquire Realbase
• Here’s why lithium miner Argosy Minerals’ (ASX:AGY) share price is leaping 9% today
• Why is the Firefinch (ASX:FFX) share price charging higher again?

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 Neometals Ltd (ASX: NMT) share price is shooting skywards this afternoon despite no news out of the sustainable minerals explorer today.

At the time of writing, Neometals shares are up 10.8% to $1.95. In earlier trade, they reached a new 52-week high of $1.97.

What’s been happening lately?

The last time we heard any news from Neometals was on Tuesday. The company announced that its battery recycling joint venture Primobius has opened a commercial lithium-ion battery recycling plant in Germany.

Operations are expected to start this quarter. It appears ASX investors loved the news, with the Neometals share price advancing 19% to date on Monday’s closing price of $1.63.

Growth in the Neometals share price has impressed ASX investors in recent times. In March alone, shares in the lithium, vanadium, and nickel miner moved 25% higher as my Fool colleague Aaron reported.

During the month, Neometals also announced it was in advanced discussions about a possible partnership between Primobius and Licular, a wholly-owned subsidiary of Mercedes-Benz Group AG (FRA: MBG).

As part of a global strategy for recycling car battery systems, Mercedes-Benz wants to build a recycling plant at its Kuppenheim operations in southern Germany.

In a statement on 11 March, Neometals said Licular “plans to cooperate with … Primobius, as its technology partner, for the design and construction of the proposed recycling plant”.

Neometals share price snapshot

The Neometals share price is up 447% over the past 12 months.

Neometals has a market capitalisation of $1.07 billion based on the current share price.

The post Neometals (ASX:NMT) share price shoots to new 52-week high appeared first on The Motley Fool Australia.

More reading

• The US is backing Aussie critical minerals projects, and these ASX mining shares could be set to reap the rewards
• What exactly is vanadium and which ASX shares have exposure?
• Why has the Neometals (ASX:NMT) share price leapt 25% in March?
• 3 ASX All Ordinaries shares smashing 52-week highs on Wednesday
• Neometals (ASX:NMT) shares surge 12% on plans to partner with ‘one of the greatest names in the automobile industry’

Motley Fool contributor Bronwyn Allen 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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Owners of Treasury Wine Estates Ltd (ASX: TWE) shares might be about to get a little extra spending (or investing) money in the form of a dividend.

That’s right, today is payment day for the winemaker and distributor’s interim dividend.

At the time of writing, the Treasury Wine share price is $11.61, 0.26% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) and All Ordinaries Index (ASX: XAO) are currently up 0.06% and 0.07% respectively.

So, what should investors know about their latest payment? Here are all the details.

Treasury Wine pays out interim dividend

The Treasury Wine interim dividend is being paid today, with many shareholders set to receive a fully franked 15 cent dividend for every share they own in the company.

Taking into account the share price’s previous close, today’s 15 cent dividend, and the company’s latest final dividend – valued at 13 cents per share – the company is currently trading at a trailing dividend yield of 2.4%.

But not all investors will be receiving the company’s interim dividend today. Treasury Wine traded ex-dividend on 2 March.

That means only shareholders who invested before that date are eligible to receive the payout. Thus, a share’s value generally drops in line with the value of the company’s dividend on its ex-dividend date.

The Treasury Wine share price was no exception, plunging 2.74% lower on its ex-dividend date.

The dividend being paid today was first announced in Treasury Wine’s half-year results, posted in February.

For the six months ended 31 December, the company’s sales revenue, earnings before interest and tax, and net profit after tax (NPAT) fell 10.1%, 6.7%, and 7.5% respectively.

However, it chose to maintain its previous 15 cents interim dividend. That represents a 66% payout ratio of the company’s first-half NPAT.  

It’s also 5 cents lower than the company’s highest dividend ever.

Treasury Wine has previously paid two 20 cent dividends. The first was its final dividend of financial year 2019. The second was its interim dividend of financial year 2020.

Despite being in the green today, the Treasury Wine share price is currently 7% lower than it was at the start of 2022.

Though, it has gained 12% since this time last year.

The post The Treasury Wine (ASX:TWE) dividend is being paid today. Here’s the lowdown appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Top brokers name 3 ASX shares to buy today
• Broker names 2 ASX 200 shares to buy with almost 20% upside
• Look out Treasury Wine (ASX:TWE), there’s a new shiraz on the block
• Here’s why the Treasury Wine (ASX:TWE) share price is tipped to outperform

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 recommended Treasury Wine Estates 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 Tabcorp Holdings Limited (ASX: TAH) share price is climbing today despite Racing NSW threatening to block its upcoming $11 billion demerger.

The New South Wales racing body is slamming the plan for Tabcorp to separate its lucrative lottery arm and its struggling wagering business, reported The Australian.

But investors appear to be unfazed. At the time of writing, the Tabcorp share price is up 2.62% to $5.48. For comparison, the S&P/ASX 200 Index (ASX: XJO) is currently flat.

Tabcorp demerger angers Racing NSW

Racing NSW wants Tabcorp to provide guarantees to protect the income the ASX company pays to the agency.

Otherwise, Racing NSW is warning it could look to the courts to stop the break-up.

“I have to protect the interests of the 50,000 participants in the racing industry in NSW and unless (Tabcorp) negotiate with us we will be left with no other option,” Racing NSW chief executive Peter V’landys was quoted in The Australian as saying.

“It’s no secret that Tabcorp’s wagering division is running poorly and that they are trying to offload a sinking ship.”

Racing NSW has a history of using the courts to get its way. This includes famously winning its case against corporate bookmakers in the High Court a decade ago that delivered hundreds of millions to racing.

How big is the legal threat to the Tabcorp share price?

However, investors may have been reassured by Tabcorp saying it doesn’t need the blessing of racing bodies. This includes Racing NSW, although it does require other regulatory clearances before the spin-off.

Tabcorp’s outgoing chief executive David Attenborough has also played down the risk of Racing NSW’s legal threats, saying management was “focused on ensuring both businesses (lotteries and wagering) perform at their best”.

No surprise to shareholders

Investors also won’t be surprised by the sabre rattling by Racing NSW. This risk was clearly laid out in Tabcorp’s demerger scheme booklet.

The company revealed it received correspondence from the body in the past year alleging the transaction would “adversely impact” the racing industry.

It also asserted that the deal would reduce the financial returns to Racing NSW and would be in breach of the agreement it has with Tabcorp.

Why the breakup could be good for the Tabcorp share price

However, shareholders are looking forward to the spin-off. History has shown that corporate break-ups often deliver superior returns to shareholders.

This includes the BHP Group Ltd (ASX: BHP) and South32 Ltd (ASX: S32) separation and the Wesfarmers Ltd (ASX: WES) and Coles Group Ltd (ASX: COL) break up – just to name a few.

The Tabcorp share price has gained around 16% over the past year, while the ASX 200 is up around 10%.

The post Tabcorp (ASX:TAH) share price jumps as possible legal action threatens $11b demerger appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Why BHP, Core Lithium, Tabcorp, and Talga shares are racing higher
• ASX 200 (ASX:XJO) midday update: Tabcorp demerger update, BHP higher, Block tumbles
• Tabcorp (ASX:TAH) share price higher following $10b demerger update
• 5 ASX shares to ride out the 2022 volatility: expert

Motley Fool contributor Brendon Lau owns BHP Billiton Limited and South32 Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended COLESGROUP DEF SET and Wesfarmers 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 Bitcoin (CRYPTO: BTC) price kicked off March trading for US$39,632.

Yesterday, just before we ticked the calendars over into April, Bitcoin was worth US$47,397, according to data from CoinMarketCap.

That’s a gain of 19.5% over the course of the month.

Why the Bitcoin price made headlines in March

The Bitcoin price made plenty of headlines in March.

And for good reason.

Early in March, and less than 2 weeks after Russia’s invasion of Ukraine, reports emerged that cryptos were being sent to help support Ukraine’s defence efforts. Among those reports, it emerged that Bitcoin had surpassed Russia’s plummeting rouble in terms of total value.

A bit later in the month, the Bitcoin price surged on the day that United States President Joe Biden signed an executive order imposing greater oversight on crypto markets. Crypto investors look to have applauded that regulatory move.

Mid-month, Bitcoin received another leg up when a potential crypto mining ban failed to gain traction among European Union parliamentarians.

The token also held up well following the first interest rate rise from the US Federal Reserve in many years, with numerous more rate hikes flagged over the coming months.

Earlier this week, on 29 March, the Bitcoin price hit a new 2022 high, erasing sizeable losses it had suffered in the first 2 months of the new year.

That new 2022 high came following news that the Luna Foundation, the organisation behind stablecoin TerraUSD (CRYPTO: UST), had bought almost 25,000 Bitcoin worth roughly US$1.1 billion.

Crypto markets resilient in March

Commenting on the recent performance of the Bitcoin price and crypto markets more broadly, Josh Gilbert, crypto analyst at multi-asset investment platform eToro, said:

Despite geopolitical tensions emerging and interest rates rising across the globe, crypto markets have demonstrated a high level of resilience. The tumultuous start of 2022 has highlighted the multitude of use cases that cryptoassets possess. Investors are now starting to see crypto as more than just an investable asset, but instead, as something that can completely shift financial systems and provide support to those in need.

On the first trading in April, the Bitcoin price is down 3.5% to US$45,598.

The post Here’s what moved the Bitcoin price 20% higher in March appeared first on The Motley Fool Australia.

More reading

• Here’s what ESG investors should know about cryptos like Bitcoin
• Mining Bitcoin is 3.5 times more expensive than digging up gold
• Bitcoin is up 25% in 10 days. Here’s what it’ll do now
• The Bitcoin price just reached a new 2022 high. Here’s why
• Why this lesser-known crypto left Bitcoin in the dust this week

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin. The Motley Fool Australia owns and has recommended Bitcoin. 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 Allkem Ltd (ASX: AKE) share price is powering ahead on Friday morning following a company update regarding lithium pricing.

At the time of writing, the lithium mining company’s shares are swapping hands for $12.19, up 6.65%.

‘Strong market conditions’ support lithium carbonate and spodumene prices

In today’s statement, Allkem provided an update on expected June quarter pricing for lithium carbonate and spodumene products.

The company stated that strong market conditions have positively impacted the price received for lithium carbonate spodumene concentrate.

As such, the June quarter (FY22) average price received for lithium carbonate is expected to be approximately US$35,000 per tonne. This includes free on board (FOB) on sales of approximately 3,500 tonnes of lithium carbonate.

FOB is a shipping term used to indicate who is responsible in the case of damaged or destroyed goods.

This means Allkem retains ownership and responsibility for the goods until they are loaded ‘onboard’ a shipping vessel. Once on the ship, all liability transfers to the customer/buyer of the lithium carbonate product.

It’s worth noting that the preliminary March quarter (FY22) sales price was approximately US$27,236 per tonne. This is 9% higher than the previous guidance given by Allkem.

In addition, spodumene concentrate pricing in the June quarter is forecasted to be approximately US$5,000 per tonne based on sales of around 50,000 tonnes.

Allkem noted that March quarter sales were completed at a price of about US$2,218 per dry metric tonne (dmt). This included the spodumene concentrate that was delayed from the December quarter.

Allkem will further update the market with the final prices in the March quarterly report released on 14 April 2022.

About the Allkem share price

Over the past 12 months, the Allkem share price has surged 150% on the back of the lithium hype.

When looking at year to date, the company’s shares are up around 18%.

Based on today’s price, Allkem commands a market capitalisation of roughly $7.85 billion.

The post Allkem (ASX:AKE) share price leaps 6% following lithium pricing update appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Allkem jumps on lithium pricing update: Domain to acquire Realbase
• 2 stellar ASX growth shares analysts rate as buys
• Buying ASX shares to cash in on the EV and battery metals craze? Read this
• Leading brokers name 3 ASX shares to buy today
• Why Allkem, Firefinch, JB Hi-Fi, and Piedmont Lithium are charging higher

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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Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH) and the wider world of cryptos have been put under the microscope by Morgan Stanley’s Cryptocurrency and Sustainability Research team.

Specifically, the team delved into the various facets investors placing a premium on environmental, social and governance (ESG) issues should consider before investing in cryptos.

The social and governance angles

By and large, the social and governance aspects of cryptos shouldn’t be of much concern for ESG-focused investors.

With Bitcoin run under a decentralised blockchain system, the governance falls on its supporters and users.

Socially ESG investors shouldn’t have any major roadblocks with cryptos either.

While there are various estimates as to how much crypto is used in illegal transactions, the same issues are also in play for cash.

Investors should be aware that there are still scams in the crypto markets, but they do open the door for people to transact outside of traditional financial institutions.

According to Jessica Alsford, global head of sustainability research at Morgan Stanley:

Cryptocurrencies could be one way to increase access to financial systems for the unbanked. Anyone with a smartphone or laptop and internet connection can access cryptocurrencies, which arguably is a lower requirement than that of traditional bank accounts.

The environmental concerns for investing in cryptos like Bitcoin

It really boils down to the environmental part that ESG investors will need to consider before investing in cryptos like Bitcoin, the world’s first digital token and largest by market cap.

“Every $1 of Bitcoin mined is materially more carbon-intensive than every $1 of gold mined,” says Alsford.

She estimates that Bitcoin’s carbon footprint is some 14.2 million times more than Visa Credit Card transactions. In fact, Bitcoin uses as much energy every year as all of the Netherlands, a nation of 17 million people.

Bitcoin relies on something called proof of work (PoW). That requires a massive network of computers to verify transactions, sucking up a heck of a lot of energy.

Ethereum has also been operating on a PoW system, but the world’s number 2 crypto is planning to transition to proof of stake (PoS) later this year. That’s meant not only to speed up transactions but to greatly reduce its energy use and carbon emissions.

Some analysts are also predicting the switch to PoS will see the Ethereum price head skyward.

Can’t crypto miners just use renewables?

There are a growing number of miners tapping into hydro and solar to run their Bitcoin networks.

But according to Alsford, the sheer quantity of energy required simply isn’t available via renewable sources like solar.

“We estimate that powering Bitcoin’s yearly energy requirement via green energy would require the equivalent infrastructure of the entire US solar fleet,” she said.

The post Here’s what ESG investors should know about cryptos like Bitcoin appeared first on The Motley Fool Australia.

More reading

• Why Ethereum and Dogecoin are dropping today
• Mining Bitcoin is 3.5 times more expensive than digging up gold
• Bitcoin is up 25% in 10 days. Here’s what it’ll do now
• This cryptocurrency just exploded 30% higher, overnight
• The Bitcoin price just reached a new 2022 high. Here’s why

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