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The Openpay Group Ltd (ASX: OPY) share price is lifting as the market nears the close of trade today. This comes after the buy now, pay later (BNPL) company announced a strategic partnership with Officeworks.

At the time of writing, shares in the BNPL provider are up 4.69% to $3.35, after reaching an intraday high of $3.57 in early trade.

Delivering on its growth plans

The Openpay share price is moving higher after another positive update that will boost its presence in the Australian market.

In today’s release, Openpay advised that it has launched its ‘Buy now. Pay smarter.’ plans across Officeworks. The offering will be available both online and instore Australia-wide. Rollout is expected to start this month and run through into March.

Established in 1994, Officeworks is a leading retailer that offers customers a wide range of office supplies, technology, furniture, art supplies, education resources, and print and copy services. The company operates 168 stores nationally and houses more than 4,000 products on its website.

This latest addition to Openpay’s growing list of merchants further underscores the company’ strategy to provide a smart budgeting tool for important consumer purchases. The BNPL company offers various BNPL plans across industries such as automotive, healthcare, home improvement, memberships and education.

Just recently, Openpay signed major Australian brands that included Kogan.com Ltd (ASX: KGN), Surfstitch Group, Dick Smith and Matt Blatt.

Management commentary

Openpay managing director and CEO Michael Eidel hailed the new partnership, saying:

We are delighted to have launched this agreement with Officeworks. By partnering, we can provide a great budgeting tool to help families get their school and work needs sorted, while supporting Officeworks to ‘help make bigger things happen’ for their customers. This approach fits nicely with the higher-value, longer-term plans that we can offer to customers and responds to the growing trend for interest-free instalment payments.

Officeworks managing director Sarah Hunter added:

We are excited to be partnering with Openpay. The flexibility of its BNPL solution will provide our customers with more time to pay for all their computing, technology, furniture and stationery needs to help them make bigger things happen.

Foolish takeaway

The Openpay share price is up more than 150% in the last 12 months. Its shares touched a low of 32 cents in last year’s COVID-19 meltdown in March, before accelerating higher. At today’s price, the company has a market capitalisation of $266.13 million.

More reading

• One year on and 50% up, the All Technology Index is booming
• 3 outstanding ASX growth shares to buy today
• Why is the Splitit (ASX:SPT) share price underperforming Afterpay and Zip?
• Why the Openpay (ASX:OPY) share price is up 17% and could go higher
• 2 of the best ASX growth shares to buy now

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Peninsula Energy Ltd (ASX: PEN) share price is looking to extend its miraculous run in 2021. Earlier today, Peninsula announced that the company has begun trading on the OTCBQ Venture Market in the US. At the time of writing, the Peninsula share price was trading at $0.17, up 6.25%.

Let’s take a closer look at the announcement and what this means for the Peninsula share price. 

Today’s Announcement

According to the announcement, Peninsula Energy was given the green light by OTC Market Group. The company will be trading under the ticker ‘PENMF’.

Shares in Peninsula Energy have been upgraded to the middle tier of the OTC market. This comes after trading on the OTC Pink Market since January. In the announcement released earlier today, Peninsula advised investors that the upgrade was in response to strong trading volumes.

Listing on the OTCBQ is reserved for penny stocks and small foreign companies. As a result, this will allow overseas investors greater access to securities in Peninsula Energy.

Peninsula’s CEO, Wayne Heili, noted the milestone, stating:

U.S.-based investors have demonstrated a keen awareness of Peninsula and our flagship Lance Project located in the state of Wyoming but they have been limited to trading of shares during Australian market hours.

In response to the update, the Peninsula share price is trading more than 6% higher for the day.

What does Peninsula Energy do?

In the US, there has been bipartisan support to ‘decarbonise’ the country’s power sector by investing in US-produced uranium. This was culminated in the US passing the Omnibus Budget Bill. As part of the initiative, the US Department of Energy has allocated US$75 million towards the establishment of a national strategic uranium reserve. 

Peninsula Energy is an ASX-listed uranium mining company that is poised to benefit from the initiatives of the US government. The company’s flagship Lance Project is located in Wyoming, USA. Notably, it is the only US-based uranium project using a low pH, In-Situ Recovery (ISR) process.

In addition, Peninsula is the only junior uranium producer with long-term sales contracts. The company currently has contracts for up to 5.5 million pounds at US$51-$53 per pound of uranium.

For the fourth quarter of 2020, Peninsula delivered 75,000 pounds of uranium. This allowed the company to generate a net cash margin of US$1.4 million.

Since the start of November, the Peninsula share price has surged more than 170%, reflecting investor optimism in the company.

More reading

• Why the McPherson’s (ASX:MCP) share price was crushed today
• Pilbara Minerals (ASX:PLS) share price jumps 6% on broker upgrades
• Resonance Health (ASX:RHT) announces its share price is in trading halt
• What’s going on with the Cirralto (ASX:CRO) share price?
• 2 high-yielding ASX 200 shares

Motley Fool contributor Nikhil Gangaram 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 McPherson’s Ltd (ASX: MCP) share price continued its disappointing run and sank lower again on Wednesday.

The beauty products company’s shares dropped 11% to $1.21.

This means the McPherson’s share price is now down 60% over the last 12 months and trading within touching distance of a two-year low.

Why did the McPherson’s share price crash lower today?

Investors were selling McPherson’s shares today following the release of a disappointing half year result.

Management blamed the same weakness in the daigou channel that has been impacting A2 Milk Company Ltd (ASX: A2M) and Blackmores Limited (ASX: BKL) for its poor performance.

For the six months ended 31 December, the company reported a 4.1% decline in sales revenue to $101.7 million.

Management advised that it achieved domestic sales growth of 6% during the first half. This was thanks to market share gains from four of its products. However, a 65% decline in export sales more than offset this.

On the bottom line, the company reported a 19.2% decline in underlying net profit after tax to $4.6 million. Though, it is worth noting that this underlying result does not include a $4.3 million provision for excess hand sanitiser inventory.

Despite its weak result, the McPherson’s board has declared a fully franked interim dividend of 3.5 cents per share. This is down from 4 cents per share in the prior corresponding period.

Management commentary

McPherson’s Managing Director, Grant Peck, commented: “McPherson’s 6% revenue growth in the Australian market over the six months to 31 December 2020 illustrates the strength of our brand portfolio and our ability to deliver new product innovations to market. McPherson’s is the second largest Australian supplier of beauty products to the Australian Pharmacy channel.”

“Our existing brand portfolio, with its predominance in the beauty category, is now complemented by the recent acquisition of the Fusion Health and Oriental Botanicals brands and the establishment of McPherson’s Health category. This acquisition, effective 1 December 2020, provides the Group with strong go to market capabilities and product innovation credentials in the Natural Health & Vitamins and Dietary Supplements category, which in Australia is part of the $5.63 billion Health & Wellness retail sales market.”

Outlook

Management warned that there remains an elevated level of uncertainty due to the difficulty of forecasting demand in China.

Furthermore, it notes that consumer behaviour will be difficult to gauge in the short term following an unexpected slowdown in the market in the last quarter of last year.

As a result, it is unable to provide guidance at this stage. However, it suspects that its underlying profits will be materially below what it achieved in FY 2020.

More reading

• Pilbara Minerals (ASX:PLS) share price jumps 6% on broker upgrades
• Resonance Health (ASX:RHT) announces its share price is in trading halt
• What’s going on with the Cirralto (ASX:CRO) share price?
• 2 high-yielding ASX 200 shares
• Why the InvoCare (ASX:IVC) share price tumbled 5% lower today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk and Blackmores 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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While the S&P/ASX 200 Index (ASX: XJO) slumped today, Pilbara Minerals Ltd (ASX: PLS) shares bumped up close to 6% by the market’s close. Furthermore, over the past six months, the Pilbara share price has gained 240%.

So what’s pushing the emerging lithium and tantalum producer’s shares higher today? 

What’s driving the Pilbara share price higher?

Today Citi announced an upgrade to its Pilbara Minerals share price rating from ‘sell/high risk’ to ‘neutral/high risk’. The broker also raised its Pilbara share price target to $1.10, up from $1.00.

According to Citi analysts, electric vehicle (EV) sales proved to be extremely resilient in 2020, growing by ~35% year over year, while overall passenger vehicle sales fell ~20%.

Because of this trend, Citi forecasts a further 15% upside in Chinese battery grade carbonate prices by the fourth quarter of 2021. Citi expects a structural deficit to occur due to increasing EV market demand, thus increasing the price of lithium.

Canaccord Genuity also recently upgraded the Pilbara Minerals share price from ‘sell’ to ‘hold’. The firm expects that EV sales will continue to gain momentum, which will be driven by legislative changes, lower costs and increasing options available to consumers.

Like Citi, Canaccord sees the value of lithium carbonate rising. The group upgraded its lithium carbonate price estimate by ~75% over 2021-2024. Canaccord further noted that this revised pricing forecast resulted in an average 41% increase in price target across its global sector coverage.

Company snapshot 

Pilbara Minerals aims to position itself as a low-cost, long-term, sustainable lithium producer. It owns 100% of the Pilgangoora Lithium-Tantalum Project in Western Australia’s Pilbara region. 

The operation consists of two processing plants. Plant one is a 2 million tonne per annum (Mtpa) mining and processing operation and Plant Two is presently under evaluation.

The Pilbara Minerals share price has shot up by around 300% over the past year. 

Based on the current share price, the company’s market capitalisation is $3.1 billion with 2.9 billion shares outstanding.

More reading

• Pilbara Minerals (ASX:PLS) share price climbed 12% today, but why?
• Why Blackmores, Creso Pharma, Pilbara Minerals, & Zip shares are pushing higher
• Zip and Vulcan were among the most traded ASX shares last week
• 5 lithium shares that are fast-charging up in 2021
• Why the Ioneer (ASX:INR) share price is up 16% this week

Motley Fool contributor Gretchen Kennedy 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 Resonance Health Limited (ASX: RHT) share price has been placed in a trading halt. This comes after an announcement by the company this afternoon. Prior to the halt, the Resonance Health share price was trading narrowly higher. Rising to 19.5 cents, up by 2.63%.

The Resonance Health share price has been a poor performer so far this year, shedding 15%. Let’s take a closer look at what this means for the company.  

What Resonance Health does

Resonance Health is an Australian healthcare company. It is involved in the development and delivery of non-invasive medical imaging software and services. Resonance Health’s products are used by clinicians in the diagnosis and management of human diseases. Its products are also used by pharmaceutical companies in their clinical trials.

The Company’s flagship product is its HepaFat-AI technology. This gained FDA approval earlier this year. The FDA approval which paves the way for commercialisation of the technology sent its shares 80% higher on the day.

HepaFat-AI results can be used to monitor liver fat content in patients undergoing weight loss management. Additionally, it can aid in the assessment and screening of living donors for liver transplants.

What Happened?

This afternoon, the Resonance Health share price is at a standstill. This is due to the company announcing that it would be entering a trading halt. Shares in the company will not begin trading until February 19 or when the announcement is made. Whichever is earliest.

The small cap share requested a trading halt pending the announcement in relation to regulatory approval that affects the company’s share price. With the trading halt now in effect, shareholders will be eagerly awaiting the release of any news.

About the Resonance share price

It has been a volatile 6 months for Resonance Health. Consequently, its share price has jumped between 13.5 and 32.5 cents. Nonetheless, shares in the company are currently trading at a price of 19.5 cents. This is despite having dropped lower since the start of the year.

Resonance Health currently boasts a market capitalisation of $87 million.

More reading

• Pilbara Minerals (ASX:PLS) share price jumps 6% on broker upgrades
• What’s going on with the Cirralto (ASX:CRO) share price?
• 2 high-yielding ASX 200 shares
• Why the InvoCare (ASX:IVC) share price tumbled 5% lower today
• What’s the go with the EarlyPay (ASX:EPY) share price today?

Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Resonance Health 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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The Cirralto Ltd (ASX: CRO) share price is on fire again today, climbing another 21% at the time of writing to 12 cents a share. That move is nothing to what Cirralto shares did this morning at market open though.

The Cirralto share price had closed at 9.8 cents yesterday afternoon after recording a sizable 30% rise over the day. But this morning, it opened at 16 cents a share and shot up as high as 21 cents. That represents a 114% rise over yesterday’s closing price.

As we reported yesterday (and which remains unchanged today), there has been no major news out of the company that might clearly cause such a dramatic move in the share price.

However, saying that, ASX data shows that the trading volume for Cirralto shares remains off the charts. Last Thursday and Friday saw 13.7 million and 17.5 million shares in the company change hands respectively. Yesterday, 352.5 million shares were traded. Today, the number is standing at 283.4 million shares at the time of writing.

Cirralto: Yet another ASX speeding ticket

These moves have drawn the attention of the ASX itself. Yesterday afternoon, the stock market operator issued a ‘please explain’ speeding ticket to Cirralto in response to the massive surge in share price and trading volume. Asked if the company had any idea why this was happening, Cirralto responded by stating:

The company notes recent market, social media and investor focus on ASX listed companies that have technologies associated with payment and merchant services.Other companies in the sector such as Openpay Group, Ioupay Ltd and Zip Co Ltd appear to have also experienced recent material share price increases.

This is true. Zip Co Ltd (ASX: Z1P), Openpay Group Ltd (ASX: OPY) and IOUpay Ltd (ASX: IOU) have all experienced similar moves over the week so far. The ASX has issued Zip and IOUpay with speeding tickets this week as well. Both companies have also denied any knowledge of any possible cause behind the dramatic spikes.

More reading

• The Cirralto (ASX:CRO) share price is hitting 52-week highs today

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. 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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High-yielding S&P/ASX 200 Index (ASX: XJO) shares could be interesting in a world where many bank accounts offer a lower interest rate than the current rate of inflation.

The ASX 200 is full of businesses that have been running for many years and may be among the leaders in their industry in Australia or whichever location(s) they operate.

The below two ASX shares are on track to pay dividend yields of comfortably more than 5% in FY21.

APA Group (ASX: APA)

This ASX 200 share describes itself as a leading Australian energy infrastructure business. It owns and/or operates around $22 billion of energy infrastructure assets. APA boasts that its gas transmission pipelines span every state and territory on mainland Australia, delivering approximately half of the nation’s gas usage.

APA was one of the few ASX 200 businesses to increase its dividend, or distribution in APA’s case, during the COVID-19-affected year of 2020. Indeed, it has actually grown its distribution every year for a decade and a half.

In the FY20 result it grew its annual distribution by 6.4% to 50 cents per security, which was funded by an 8.3% increase in operating cashflow and a rise in net profit after tax (NPAT) of 10.1%.

APA said that the FY20 result demonstrated the strength and stability of its asset portfolio and low risk business fundamentals. Management also said that the balance sheet was in very good shape.

The ASX 200 share is currently looking at the US as an attractive opportunity, but its most recently announced energy projects are based in Australia.

In November 2020, APA announced a $460 million investment to build the Northern Goldfield Interconnect (NGI) to link with APA’s Goldfields Gas Pipeline (GGP) which in turn connects with APA’s Eastern Goldfields network, creating an interconnected pipeline which covers 2,690km from north to south and west to east.

APA thinks that with the depth and mix of projects expected to be delivered in this region, it expects the NGI will have a strong portfolio of long-term contracts in place by the time construction is complete in the middle of 2022.

After a 4.3% increase to the FY21 interim distribution, APA has a current yield of 5.5%

Charter Hall Long WALE REIT (ASX: CLW)

This is a ASX 200 dividend share that’s liked by a few different brokers right now including Morgan Stanley and Citi.

The concept of the real estate investment trust (REIT) is that it is invested in properties with high quality tenants on contracts with long tenancy agreements. At the end of December 2020, the weighted average lease expiry (WALE) had risen slightly to 14.1 years – up from 14 years.

Morgan Stanley said that the FY21 first half-year result was good, it was better than the broker was expecting. Citi thinks that the rest of the 2021 financial year looks positive because of the approximately $700 million of acquisitions that the REIT has made recently.

Two of those asset acquisitions have been the flagship David Jones store in Sydney and a portfolio of BP locations in New Zealand. Another acquisition by the ASX 200 share was spending $281.5 million on the Telstra Corporation Ltd (ASX: TLS) telephone exchange and data centre located at 76 to 78 Pitt Street in Sydney.

At the end of the half-year period, Charter Hall Long WALE REIT had an occupancy rate of 97.5% across 459 properties.

In the half-year report it grew the distribution by 3.6% year on year to 14.5 cents per security. The FY21 distribution is expected to be at least 29.1 cents. At the current Charter Hall Long WALE REIT share price, that translates to a distribution yield of 6.2%.

More reading

• Why the Evolution (ASX:EVN) share price crashed despite record results
• 5 things to watch on the ASX 200 on Wednesday
• The latest ASX shares upgraded by brokers to “buy” during the reporting season
• ASX 200 rises 0.7%, Redbubble sinks, BHP dividend jumps
• NRW (ASX:NWH) share price jumps on acquisition update

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of APA Group. 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 InvoCare Limited (ASX: IVC) share price was a poor performer on Wednesday.

The funerals company’s shares sank as much as 5% before ending the day almost 4% lower at $10.83.

Why did the InvoCare share price tumble lower?

Investors were selling InvoCare shares on Wednesday following the release of an announcement relating to its upcoming full year results.

According to the release, the company intends to recognise $26.5 million in pre-tax significant items in its FY 2020 financial results. This comprises $7 million worth of operating items and $19.5 million of non-operating items.

In light of this, InvoCare expects to report a disappointing net loss after tax in the range of $7 million to $12 million.

It is also worth noting that even excluding its significant items, InvoCare would still be reporting a material profit decline.

Excluding these significant items, net profit after tax is expected in the range of $14 million to $19 million. This represents a 70% to 78% decline on FY 2020’s net profit after tax of $63.8 million. Though, it is worth noting that the prior period does include a mark-to-market gain on the revaluation of undelivered prepaid contracts.

What are the significant items?

The release explains that a material portion of the significant items is linked to the softening of the funeral services sector in Australia and New Zealand.

It notes that this is being primarily driven by a range of impacts flowing from the COVID-19 pandemic.

The company commented: “Goodwill related to the New Zealand business (which represents less than 10% of Group operating EBITDA) was impaired by $24.4 million in the 2019 financial year. While some progress had been made to improve the business, the reassessment of recoverable value will result in a further $19.3 million goodwill impairment for the year ended 31 December 2020. Notwithstanding the impairment, the Group remains confident that the quality of our frontline team in New Zealand will continue to provide excellent service to our client families.”

What else?

In addition to this, it advised that some of the significant items relate to the carrying value assessments performed as part of year-end accounting procedures or are items that provide disclosure clarity to operating earnings.

This includes a $6.2 million impairment to the carrying value of certain modules of the Oracle ERP project. It advised that the replacement of certain functions rendered some elements of the IT platform obsolete.

InvoCare intends to release its full year results on 24 February.

More reading

• GameStop effect: 3 more shorted ASX shares that could skyrocket
• ASX 200 down 0.2%: Zip Chair steps down, Worley crashes, Blackmores & InvoCare jump
• Here are the 10 most shorted shares on the ASX
• Are InvoCare (ASX:IVC) shares the ASX version of GameStop?
• ASX 200 down 2.3%: Bank shares tumble, InvoCare jumps, IOOF disappoints

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended InvoCare 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 EarlyPay Ltd (ASX: EPY) share price has been a rollercoaster today. Initially, shares in the non-bank lender jumped on open to 50 cents, an increase of 16%. Celebrations were short-lived with the shares taking the elevator back to 44 cents.

The price movements are cause for some head-scratching, as there are no announcements. Let’s take a look at what could be happening.

What might be moving the EarlyPay share price?

EarlyPay rebranding resonates with rocketeers

EarlyPay was previously known as CML Group – just doesn’t have the same ring to it, does it? The recent rebranding was a part of the company’s shift towards a new software-as-a-service (SaaS) operation after acquiring Skippr.

Transitioning to more of a digital-leaning lender, EarlyPay likely hopes to replicate the success of ASX-listed Wisr Ltd (ASX: WZR) in its digital endeavours. EarlyPay does differ from Wisr though, as the former provides secured finance to small and medium-sized businesses. Whereas Wisr offers loans to individuals for travel, car purchase, etc.

With the acquisition of Skippr, EarlyPay can now assess credit quality through integration with cloud accounting data automatically. Additionally, the whole onboarding process for a customer is now automated – significantly reducing the time and effort required on EarlyPay’s end to facilitate a loan.

There is the potential that some are speculating over the name EarlyPay, as it sounds a little like Afterpay Ltd (ASX: APT). With the buy now, pay later (BNPL) sector heating up, everyone is hunting for new entrants. However, EarlyPay isn’t quite a BNPL company – although the debate rages on whether BNPL is just glorified credit.

EarlyPay profitable growth play

Investors could also be enticed recently by the fact EarlyPay is profitable. As a consequence of the recent SaaS shift, the company may be appealing to investors less fancied with loss-making businesses.

In its October 2020 investor presentation, EarlyPay recorded $8.4 million in profits on $47.5 million revenue. Based on today’s valuation, that gives EarlyPay a P/E ratio of 11.85 – which would be considered low for a technology company. But, then the debate arises, is it a technology company or just a lender?

Whatever the answer, the EarlyPay share price has had a whirlwind day. At the time of writing, EarlyPay shares are swapping hands for 44 cents, which puts it up 1.16% today and 14% for the year so far. 

More reading

• One year on and 50% up, the All Technology Index is booming
• What’s with the Afterpay (ASX:APT) share price fall today?
• Why is the Splitit (ASX:SPT) share price underperforming Afterpay and Zip?
• The Cirralto (ASX:CRO) share price is hitting 52-week highs today
• Zip (ASX:Z1P) share price is soaring 13%, smashing another record high

Motley Fool contributor Mitchell Lawler owns shares of AFTERPAY T FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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) just hit another new record high. And as we humans like to put more weight on nice base-10 numbers (thanks fingers), this is a big one.

The world’s largest cryptocurrency topped US$50,000 in the last 24 hours, peaking at US$50,580. It’s since retraced a bit, to the current price of US$49,500. That’s up some 70% in 2021 alone.

Isn’t Bitcoin just a fad?

For many investors, cryptocurrencies like Bitcoin appear to be little more than a fad. One that will eventually fade away, leaving holders of the digital tokens empty-handed.

But the recent adoption by larger institutions – including the US$1.5 billion investment by Elon Musk’s Tesla Inc (NASDAQ: TSLA) – is shaking the naysayers’ resolve.

According to Eleanor Creagh, Australian market strategist at Saxo Capital Markets, fading trust in institutions is driving the renewed appetite for Bitcoin:

Bitcoin was birthed in the aftermath of the GFC as a currency free from the corruption of central banks and governments, so it’s unsurprising to see renewed interest during a period when central banks’ unconventional monetary policies are highlighting many of the issues Bitcoin sought to solve.

Creagh says mainstream investors are increasingly accepting the current economic and financial models are flawed.

Much as in the wake of the 2008 financial crisis, we are seeing intervention and unconventional monetary policy acting as dual forces that serve to entrench and aggravate inequality. Once again, inequities within our systems are in full view, with a “K-shaped” recovery increasing the wealth transfer to those already asset rich.

Bitcoin meanwhile is designed to function on a standalone basis. It is uncorrupted by banks and governments and therefore immune to the debasement suffered by fiat currencies.

Born from easy money policies

Creagh points the finger at central bank and government’s turning their backs on orthodoxy themselves, with “unbridled liquidity injections and ever-expanding central bank balance sheets” diminishing mainstream scepticism of cryptocurrencies.

Bitcoin’s capped supply at 21 million and non-inflationary model adds to its appeal as a debasement hedge and store of value within this regime, where governments and central banks have stimulus spigots on full force. In addition, the asset possesses a unique quality of an embedded call option on the future should it become a dominant digital monetary network. 

She says that high-profile investors and large asset managers like Blackrock, Morgan Stanley and Guggenheim have helped drive the Bitcoin price higher and increased the general public’s acceptance of the digital token.

Creagh concludes that “In the long term, institutional and commercial support will further validate the cryptocurrency, increasing its popularity as a store of value and paving the path toward mass adoption.”

More reading

• Why the Fatfish (ASX:FFG) share price is diving 21% today
• Tesla stock split: Is another one coming?
• DigitalX (ASX:DCC) share price soars 18% following Bitcoin update
• Why investors should look beyond the ASX 200 to US share markets
• Why I’m never selling my Square shares

Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. 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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