Why Crypto.com Coin Skyrocketed Today

]

What Happened: Cryptocurrency exchange Crypto.com’s native token CRO has rallied by over 70% in the past 24-hours, and its trading volume is up by 877%.

The cryptocurrency’s price skyrocketed after the company’s announcement confirmed a massive token burn ahead of its mainnet launch.

Crypto.com said it would destroy 70 billion of its CRO tokens, in what it describes as the largest token burn in the history of crypto markets.

Why It Matters: The cryptocurrency exchange stated that the token burn was an important step to fully “decentralize its network."

“The purpose of these burns is to ensure network security by not giving too much of an advantage to early adopters as preparations are being made for the March 25th Crypto.org Chain mainnet," a spokesperson for Crypto.com told Benzinga.

59.6 billion CRO tokens will be burned today, and the remaining 10.4 tokens will be locked in a smart contract on a schedule to be burned monthly.

According to the exchange, this will increase the level of circulating supply of CRO from the current 24% to over 80%.

Typically, the goal of token burning is to permanently remove a certain quantity of a token from the circulating supply to slow down inflation/influence a token’s price.

“There is not a direct correlation between the price increase and token burns, but one can induce that when the supply is decreased, the existing tokens become more valuable,” a representative of Crypto.com concluded.

What Else: Besides these changes in CRO’s tokenomics, the platform is launching the Crypto.org Chain blockchain on the mainnet on March 25.

The blockchain will serve as infrastructure for users to create payment networks, NFTs (non-fungible tokens), and DeFi (decentralized finance) applications.

“We believe that the world needs a fully decentralized, open-source, public chain with high speed and low fees.”, said Crypto.com in a blog post.

Image: Markus Winkler via Unsplash

See more from Benzinga

Tether Deal With New York State Brings Quick Reversal of Crypto-Market Sell-Off

]

Bitcoin (BTC) and other cryptocurrencies recovered partially from their biggest sell-off in a month after the New York state Attorney General’s office announced a settlement of a dispute involving the stablecoin tether (USDT) that had rattled market confidence in recent weeks.

Prices for bitcoin, the largest cryptocurrency by market value, jumped to $49,000 after the announcement, having hit lows below $45,000 earlier Tuesday. As recently as Sunday, bitcoin had pushed to a new record high above $58,000.

“After 2.5 years and 2.5M pages of info shared, we admit to no wrongdoing and will pay US$18.5M to resolve this matter,” Bitfinex tweeted, adding that no finding states that Tether ever issued [the stablecoin] without backing or to impact crypto prices.

Related: US House Subpanel to Look at Crypto as Part of Examination of How Domestic Terrorism Is Funded

According to trader and analyst Alex Kruger, the settlement news is bullish for bitcoin, decentralized finance (DeFi) and Bitfinex’s LEO token.

Analysts at JPMorgan warned last week that a sudden loss of confidence in tether – a stablecoin widely used to fund cryptocurrency purchases – would pose risk to the crypto market stability.

In April 2019, the New York prosecutors had accused Bitfinex of using Tether’s funds to cover up the loss of $850 million in customer and corporate funds held by a payment processor.

Earlier Tuesday, bitcoin price had slumped to a 12-day low on Tuesday, extending Monday’s double-digit fall from record highs.

Related: Abra CEO Bill Barhydt: The Tether and Bitfinex Legal Case was a ‘Distraction’

Despite bitcoin’s increasing use by big investors as a hedge against inflation, many analysts in both crypto markets and on Wall Street say the cryptocurrency still trades like a risky asset, so it’s vulnerable when the mood in traditional markets darkens.

And that’s what happened on Monday, when stock markets came under pressure on Monday and the yield on 10-year U.S. Treasury notes reached a 10-month high of 1.39%, extending the year-to-date gain to over 35 basis points, or 0.35 percentage point.

Story continues

The risk aversion likely helped drag bitcoin lower.

According to CNBC, rising yields could signal investor expectations of reflation – an expansion in the level of output of an economy by using either fiscal or monetary policy or both, with a corresponding increase in prices for assets and consumer goods and services. The U.S. Federal Reserve has been trying to reflate the economy since the March 2020 crash and has pumped trillions of dollars into the system to achieve that goal.

Analysts expect Federal Reserve Chair Jerome Powell to tell Congress later Tuesday that the central bank is committed to keeping interest rates low. The U.S. central bank is also likely to continue with its liquidity-boosting bond purchase program, despite a recent rise in inflation expectations and an improving growth outlook. That will likely push bond yields lower and put a floor under both equities and bitcoin.

“The recent spike in yields suppressed some of the risk-on sentiment, which is inevitable so. But I suspect Powell will err to the side of caution and yields will be lower after his semiannual testimony.” Denis Vinokourov, head of research at the London-based prime brokerage Bequant, told CoinDesk. “In turn, [we’re] expecting risk flows to resume and support upside in BTC and with it the rest of the market.”

According to Margaret Yang, a strategist at DailyFX, investors are anticipating a large U.S. fiscal stimulus bill worth $1.9 trillion, which could boost the reflation theme and inflation outlook.

Square buys $170 million more in bitcoin to boost crypto holdings

]

TipRanks

Soaring commodity prices, additional federal stimulus, and government bond yields on the rise are all raising the specter of inflation. Furthermore, there is growing concern that stocks - and tech ones in particular - are now at valuations disconnected from reality. Is the changing macro climate about to send the bull market into retreat? Too early to tell, but it does signal that a more prudent approach to investing might be a good move right now. And that will bring us to dividend stocks. Investors want a pad, something to protect their portfolio in case of a market drop, and dividends offer just that. These profit-sharing payments to stockholders provide a steady income stream, that typically stays reliable even in a downturn. RBC Capital analysts have been doing some of the footwork for us, pinpointing dividend-paying stocks that have kept up high yields, just above 10%. Opening up the TipRanks database, we examine the details behind those payments to find out what else makes these stocks compelling buys. Annaly Capital Management (NLY) First up, Annaly Capital Management, is a real estate investment trust (REIT). Annaly holds a portfolio of commercial real estate with a heavy focus on retail (31%) and office (29%) spaces. Other large investments include multifamily dwellings, hotels, and healthcare properties. The company has over $100 billion total assets. In the company’s 4Q20 results, Annaly showed a 5.1% economic return for Q4, far stronger than the 1.8% reported for 2020 as a whole. EPS came in at 60 cents per common share, and more than covered the regular quarterly dividend of 22 cents. This is the third quarter in a row with the dividend at that level; at the annualized rate of 88 cents per common share, the dividend is yielding 10.7%. This is head and shoulder above the ~2% yield found among peer companies in the financial sector. Annaly has a long history of adjusting its dividend payment to fit with earnings, making it a reliable payer. Also of interest to investors, Annaly finished Q4 with $8.7 billion in unencumbered assets, including cash on hand. The company used this deep pocket to authorize a $1.5 billion common stock repurchase program, in a move to return capital to shareholders and bolster share prices. RBC’s 5-star analyst Kenneth Lee likes what he sees in Annaly’s performance, writing, “We continue to favor Annaly’s diversified operating model, strong liquidity and portfolio skew towards agency MBS amid current macro backdrop… Annaly has exposure to growth-oriented, credit assets, including residential and commercial mortgage credit and middle markets lending. We believe diversification should allow NLY to pivot between attractive investment opportunities.” In line with these comments, Lee rates NLY an Outperform (i.e. Buy), along with a $9.50 price target. This figure implies a 14% upside for the year ahead. (To watch Lee’s track record, click here) Overall, there is broad agreement on Wall Street about NLY’s quality, as shown by the 7 to 1 split among the analyst reviews, favoring Buy over Hold and giving the stock a Strong Buy analyst consensus rating. The shares are currently trading for $8.22 and their $9 average price target suggests an upside potential of 9.5% from that level. (See NLY stock analysis on TipRanks) Sunoco LP (SUN) From REITs we move over to the energy industry. Sunoco LP is the largest wholesale distributor of motor fuels in the US, and supplies more than 7,300 Sunoco gas stations in 33 states. Among the company’s products are gasoline, diesel fuel, heating oil, jet fuel, lubricating oils, and kerosene – a full range of petroleum products, sold as both branded and unbranded products. Sunoco also controls 13 storage terminals that maintain a secure supply for delivery to retailers. At the retail end, Sunoco provides equipment to gas stations – from pumps to payment services. This company’s diversified business has allowed Sunoco to remain profitable during the corona pandemic crisis. EPS did come in negative in Q1, when demand fell at the height of the crisis, but quickly rebounded in Q2 and has shown year-over-year gains in each quarter since. Q4 EPS was 77 cents, up from 75 cents in the year-ago quarter. Distributable cash flow in the quarter was down year-over-year, from $120 million to $97 million, and the company announced a quarterly dividend of 82.5 cents per common share. This was held steady from the prior quarter – and in fact, has been held steady at this level since November 2016. Sunoco has been paying out a reliable dividend for the past 8 years. The current payment annualizes to $3.30 per share, and gives a yield of 10.6%. Covering SUN for RBC, analyst Elvira Scotto notes that the recent Arctic storm patterns in the continental US have negatively impacted sales volumes but remains buoyed by other aspects. “SUN maintained its 2021 guidance and noted improvement in volumes in January. We do not expect the recent weather conditions to have a meaningful impact to SUN’s 2021 volumes,” said the 5-star analyst. “We believe SUN shows investors sizable current income with an improved balance sheet. We expect SUN to maintain its distribution and expect distribution coverage to improve over time.” Scotto rates SUN shares an Outperform (i.e. Buy) and increased the price target from $36 to $38. The figure implies a 23% upside for the next 12 months. (To watch Scotto’s track record, click here) Overall, SUN shares have a Moderate Buy rating from the analyst consensus, based on a range of reviews including 5 Buys, 2 Holds, and 1 Sell. The shares have an average price target of $33.50, which gives an 8% upside potential from the current trading price of $31. (See SUN stock analysis on TipRanks) To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

follow us