UPDATE 4-Ethereum breaks past $3,000 to quadruple in value in 2021

UPDATE 4-Ethereum breaks past $3,000 to quadruple in value in 2021

Bloomberg

(Bloomberg) – Warren Buffett delivered a clear verdict Saturday on the state of the U.S. economy as it emerges from the pandemic: red hot.“It’s almost a buying frenzy,” the Berkshire Hathaway Inc. chief executive officer said during the conglomerate’s annual meeting, which was held virtually from Los Angeles. “People have money in their pocket and they’re paying higher prices,” he said.Buffett attributed the faster-than-expected recovery to swift and decisive rescue measures by the Federal Reserve and U.S. government, which helped kick 85% of the economy into “super high gear,” he said. But as growth roars back and interest rates remain low, many – including Berkshire – are raising prices and there is more inflation “than people would have anticipated six months ago,” he said.Buffett reunited with his long-time friend and business partner Charlie Munger for this year’s meeting. Munger didn’t make it to last year’s meeting in Omaha, Nebraska – Buffett’s hometown – due to the shutdowns across the country. Some shareholders were relieved to see the duo fielding questions together again.“I really feel that both Charlie and Warren displayed their usual and amazing level of acuity and intellectual energy,” said James Armstrong, who manages assets including Berkshire shares as president of Henry H. Armstrong Associates.Buffett and Munger spent hours fielding questions, from the economy, to climate and diversity, the SPAC boom, taxes and succession. Here’s the lowdown:Climate Pressure:Berkshire faced pressure from two shareholders proposals, one to improve transparency related to its efforts on climate change. The topic was bound to be a feature at the meeting – and it was.When asked about the proposals, Buffett stuck to his previous stance. Measures to produce big reports on diversity and climate for his business lines spanning energy to railroads were, he said, “asinine.” The proposals were later voted down.Buffett was also asked about Berkshire’s stake in oil and gas producer Chevron Corp., which it disclosed earlier this year. Buffett said he felt “no compunction” in the least about its ownership in the company, which he said had benefited society in many ways. While he acknowledged the world is shifting away from hydrocarbons, people on the extreme sides of either argument are “a little nuts,” he said.Greg Abel, chairman of Berkshire Hathaway Energy, called climate change a “material risk.” He added that they’re setting targets and spending $18 billion over 10 years on transmission infrastructure.Killer SPACs:Buffett warned investors that Berkshire might not have much luck striking deals amid the boom in special purpose acquisition companies that gripped the market over the past year.“It’s a killer,” Buffett said about the influence of SPAC companies on Berkshire’s ability to find businesses to buy. “That won’t go on forever, but it’s where the money is now, and Wall Street goes where the money is.”Buffett, 90, also spent part of Berkshire’s annual meeting Saturday addressing the recent boom in retail and day trading. A lot of people have entered the stock market “casino” over the past year, he said.Tax:Buffett said President Joe Biden’s proposals for a corporate tax hike would hurt Berkshire shareholders. He added that antitrust laws and tax policy could change things for the company but new tax laws wouldn’t alter its no-dividend policy.Succession:Buffett and Munger, 97, fielded the majority of questions at Saturday’s meeting, but their two top deputies Abel and Ajit Jain, who runs the insurers, also shared the stage. Investors were able to get a closer look at the pair who are considered the top candidates for the job.Munger dropped a little mention of the post-Buffett years that drew speculation on social media about the most likely candidate to succeed Buffett. The CEO was pointing out that decentralization doesn’t work everywhere because it requires a certain type of culture that businesses need to have.“Yeah, but we do,” Munger insisted. “And Greg will keep the culture.”Abel has long been considered the top candidate to replace Buffett, especially when he was promoted to a vice chairman role overseeing all non-insurance operations, which gives him a wide array of responsibilities, including oversight of the railroad BNSF and the energy business.Errors:Buffett offered a few mea culpas during Saturday’s meeting. He noted that selling some Apple Inc. stock last year was a mistake and even said that Haven, the health care venture with JPMorgan Chase & Co. and Amazon.com Inc., thought it could fight the “tape worm” of American health care costs but the worm won.“That was probably a mistake,” Buffett said of those Apple stock sales last year. Berkshire still owned a roughly $110 billion stake in the iPhone maker at the end of March. “In fact, Charlie, in his usual low-key way, let me know that you thought it was a mistake too,” he said to Munger, who shared the stage with him.Cash Pile:Before the annual meeting started, the company released its first-quarter earnings, giving investors a dive into the 19.5% operating profit gain during the period.Berkshire ended the quarter with a near-record $145.4 billion of cash on hand as it continued to generate funds faster than Buffett could deploy them. But Buffett also ended pulling back on some capital deployment levers during the period. He bought back just $6.6 billion of Berkshire’s own stock, short of the record $9 billion set in prior quarters, and ended up with the second-highest level of net stock sales in the first quarter in almost five years.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Move over, bitcoin. Ethereum is at an all-time high

New York (CNN Business) Bitcoin prices continued their rebound Monday, rising about 4% to nearly $59,000. But the world’s largest cryptocurrency has been overshadowed lately by its younger sibling, Ethereum.

Ethereum, or ether for short, hit a new record high Monday of about $3,200. Ether prices have more than quadrupled in 2021, soaring 325%. Bitcoin has had a great run too this year, doubling in value.

Bitcoin’s XBT The total value of all Ethereum in circulation is now about $367 billion, according to CoinMarketCap market value is $1.1 trillion.

Tesla TSLA MicroStrategy MSTR Square SQ PayPal PYPL Bitcoin has soared this year in part due to increased adoption by Corporate America. Musk’sand software firmhave bought bitcoin to hold on their balance sheets. Digital payments giantsandare letting users buy, sell and hold crypto, too.

3 reasons why ethereum is breaking out to new all-time highs, according to Ark Invest

Dado Ruvic/Reuters

Digital currency ether soared as much as 5% to records on Monday, hitting a high of $3,203.

Ether now has a market capitalization of $366 million, according to data from CoinMarketCap.

These are the 3 reasons why ether is soaring, according to a Monday note from Ark Invest.

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Ether, the digital cryptocurrency tied to the ethereum network, soared as much as 5% to new records on Monday, hitting a high of $3,203.

The digital currency, which is often used for transactions in the digital market place for NFTs, now has a total market capitalization of $366 billion, according to data from CoinMarketCap. Bitcoin’s total value currently sits at $1.07 trillion.

The gains in ether have outpaced the gains in bitcoin year-to-date. Ether is up more than 300%, where as bitcoin is up about 95% based off of Monday afternoon prices.

These are the three reasons why ether continues to break higher, according to a Monday note from Ark Invest analyst Frank Downing.

1. “Increased institutional interest.”

Downing points out that four ether ETFs have launched on the Toronto Stock Exchange over the past two weeks, “making it easy for institutions to gain access as demand for crypto exposure broadens beyond bitcoin,” the note said.

“In addition, institutions and companies like European Investment Bank and Visa have validated the Ethereum blockchain by announcing issuance and settlement use cases, respectively,” Downing said.

2. “Strong on-chain signals.”

“Usage of the Ethereum network is increasing and, by some measures, outpacing that of Bitcoin, as shown by the number of active wallets and total transaction fees. In our view, Decentralized Finance (DeFi) and Non-fungible tokens (NFTs), both of which are burgeoning, explain Ethereum’s recent breakout,” Downing explained.

3. “Imminent protocol upgrades.”

The Ethereum Improvement Proposal 1559 is slated to go live in July, and will significantly change Ethereum’s transaction fee model, according to the note.

“Aiming to lower the volatility of ethereum’s fees, EIP-1559 introduces a mechanism to burn some transaction fees, detracting from circulating supply and introducing deflation to the ethereum ecosystem. The impact on ether’s price could be like that associated with a bitcoin halving event,” Downing said.

Two risks associated with ether’s recent rise

But there are still risks associated with ether and its rising price, Downing cautioned.

The first risk relates to the frequent and significant leverage associated with DeFi applications, which “given interoperability within the ethereum blockchain, might compound the leverage associated with other products,” Downing said.

“In the event of a downward spiral in ether’s price, the losses associated with deleveraging could be significant. Additionally, EIP-1559 could become a contentious upgrade, as miners will bear the brunt of fees burned. A miner revolt could impede the progress of the EIP-1559 upgrade,” Downing concluded.