Ether Rally Continues, For Now

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Ether (ETHUSD), the digital currency native to the Ethereum ecosystem, is nearing a $2,000 milestone as more institutional buyers have boosted their positions in recent weeks. One Ether is currently equal to $1,962.09, an increase of more than 22 times compared to a year ago.

“We believe investors are looking to diversify and are growing increasingly comfortable with Ethereum fundamentals,” wrote James Butterfill, an investment strategist at CoinShares, in a research note on Feb. 8. The asset manager noted that the total fund flows were “unusually focused” on Ethereum, with 80% of the totaling $245 million allocated to Ethereum.

Grayscale Investment Holdings, the biggest global crypto asset manager, now has 3.16 million Ether under management as of Feb. 18, with Ether accumulation showing the biggest change in its portfolio over the past seven days, according to data compiled by bybt.com.

Institutional buyers, inclusion by companies like PayPal Holdings, Inc. (PYPL), and praise from individual investors like Mark Cuban have helped to make the case for ether. Cuban has said “ETH has an advantage over bitcoin as a store of value,” noting he’s buying more Ether, not Bitcoin (BTCUSD), in an interview with The Defiant podcast.

That makes sense, as Ethereum is more than just a cryptocurrency by design, allowing for so-called “smart contracts” on the blockchain. “Thanks so Ethereum, a blockchain could be about much more than digital currency,” writes Jeff Roberts in his book Kings of Crypto: One Startup’s Quest to Take Cryptocurrency Out of Silicon Valley and Onto Wall Street. “It was now also a one-stop shop where people could sign contracts over anything from sports wagers to investment agreements to data storage.”

In that sense, Roberts compares Ethereum to an ecosystem like Apple, Inc. (AAPL). “It served as a platform much like what Apple provides developers so they can build apps for its iOS operating system,” he wrote. “And unlike Bitcoin, Ethereum offered an easy-to-learn programming language, called Solidity, for anyone who wanted to build applications.”

Like any cryptocurrency, Ethereum exposure is not without inherent risk, with some analysts noting that the behavior of top traders at Huobi, Binance, and OKEx may suggest a “lack of appetite for long positions.” However, other observers forecast the cryptocurrency’s price pushing through to $2,700. Ether is still a relatively new digital currency, and its promise and applications across different industries may take time to unfold.

“Smart contracts on blockchain are real and they remind of the early days on the internet when people realized there was a network effect,” Cuban said, noting that it took 25 years from that early stage of development. “We are right at that point right now where smart contracts on top of blockchain allow people to take anything that’s digital and turn into a product and sell it.”

Why Grayscale And Mark Cuban Bullish On Ethereum At $1,900

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TipRanks

When billionaire financier Ray Dalio makes a move, Wall Street pays attention. Dalio, who got his start working on the floor of the New York Stock Exchange trading commodity futures, founded the world’s largest hedge fund, Bridgewater Associates, in 1975. With the firm managing about $140 billion in global investments and Dalio’s own net worth coming at $17 billion, he has earned legendary status on Wall Street. Summing up his success, Dalio has three pieces of advice for investors. First, diversify. Keeping a wide range of stocks in the portfolio, from multiple sectors, is the surest way to invest well. Second, don’t think that rising markets will rise forever. This is Dalio’s variation on an old saw that past performance does not guarantee future returns. Dalio will tell you that all strong past returns really guarantee are current high prices. And finally, Dalio tells investors, “Do the opposite of what your instincts are.” Or put another way, don’t follow the herd, as such thinking frequently leads to suboptimal results. Looking to Dalio for investing inspiration, we used TipRanks’ database to find out if three stocks the billionaire recently added to the fund represent compelling plays. According to the platform, the analyst community believes they do, with all of the picks earning “Strong Buy” consensus ratings. Linde PLC (LIN) The first new position is in Linde, the world’s largest industrial gas production company, whether counting by revenues or market share. Linde produces a range of gasses for industrial use, and is the dominant supplier of argon, nitrogen, oxygen, and hydrogen, along with niche gasses like carbon dioxide for the soft drink industry. The company also produces gas storage and transfer equipment, welding equipment, and refrigerants. In short, Linde embodies Dalio’s ‘diversify’ dictum. Linde’s industry leadership and essential products helped the company bounce back from the corona crisis. The company’s revenues slipped in 1H20, but grew in the second half, reaching pre-corona levels in Q3 and exceeding those levels in Q4. In a sign of confidence, the company held its dividend steady through the ‘corona year,’ at 96 cents per common share – and in its recent Q1 declaration, Linde raised the payment to $1.06 per share. This annualizes to $4.24 and gives a yield of 1.7%. The key point here is not the modest yield, but the company’s confidence in the security of its positions, allowing it to keep a steady dividend at a time when many peers are cutting profit sharing. It’s no wonder, then, that an investor like Dalio would take an interest in a company like Linde. The billionaire’s fund snapped up 20,149 shares during the fourth quarter, worth $5.05 million at current prices. Assessing Linde for BMO, analyst John McNulty expresses his confidence in Linde’s current performance. “LIN continues to execute on its growth strategy to drive solid double-digit earnings growth, notably without requiring a further macro improvement. In our view, management’s 11-13% guide for 2021 remains conservative driven by its on coming projects, continued pricing, efficiency gains, and solid buybacks with its strong balance sheet and cash flows. Further, the solid FCF position provides them plenty of dry powder for M&A, de-caps, etc. We believe LIN is poised to continue to surprise investors and outperform the broader group even in a cyclical market. the largest global industrial gas company,” McNulty opined. In line with his bullish comments, McNulty rates LIN as a Buy, and his $320 price target implies an upside of ~28% for the coming year. (To watch McNulty’s track record, click here) Wall Street’s analysts are in broad agreement on the quality of Linde’s stock, as shown by the 15 Buy reviews overbalancing the 3 Holds. This gives the stock its Strong Buy analyst consensus rating. Shares are priced at $250.88, and their $295.73 average price target suggests they have ~18% growth ahead. (See LIN stock analysis on TipRanks) BlackRock (BLK) Next up is the world’s largest asset manager. BlackRock has over $8.67 trillion in assets under management. The company is one of the dominant index funds in the US financial scene, and saw $16.2 billion revenue last year, with a net income of $4.9 billion. BlackRock’s recent Q4 report shows its strength, as far as numbers can. EPS came in at $10.02 per share, a 12% sequential gain and a 20% year-over-year gain. Quarterly revenues of $4.8 billion were up 17% yoy. The full-year top line was up 11% from 2019. BlackRock achieved all of this even as the corona crisis flattened the economy in 1H20. In the first quarter of this year, BlackRock declared its regular quarterly dividend, and raised the payment by 13% to $4.13 per common share. At an annualized payment of $16.52, this gives a yield of 2.3%. The company has kept the dividend reliable for the past 12 years. Not wanting to miss out on a compelling opportunity, Dalio’s fund pulled the trigger on 19,917 shares, giving it a new position in BLK. The value of this new addition? More than $14 million. Covering BLK for Deutsche Bank, analyst Brian Bedell writes, “We view 4Q results as very good with strong long-term net inflows across its products which we expect to continue despite a one-time, $55bn pension fund outflow of low-fee equity index assets expected in 1H21 which mgmt. said would have a minimal impact on base fee revenue. Additionally, total net inflows drove annualized organic base management fee growth of 13%, a quarterly record, on annualized long-term organic AuM growth of 7%. We expect organic base fee growth to exceed organic AuM growth coming into 2021 driven by a flow mix skewed toward higher fee-rate products for now.” To this end, Bedell rates BLK a Buy and his $837 price target suggests the stock has ~18% upside ahead of it. (To watch Bedell’s track record, click here) The analyst consensus tells a very similar story. BLK has received 6 Buy ratings in the last three months, against a single Hold – a clear sign that analysts are impressed with the company’s potential. Shares sell for $710.11, and the average price target of $832.17 gives the stock a 17% upside potential. (See BLK stock analysis on TipRanks) AbbVie, Inc. (ABBV) AbbVie is a major name in the pharma industry. The company is the maker of Humira, an anti-inflammatory used in the treatment of a wide range of chronic illnesses including rheumatoid arthritis, Crohn’s disease, and psoriasis. The company’s other immunology drugs, Skyrizi and Rinvoq, were approved by the FDA in 2019 as treatments for psoriasis and rheumatoid arthritis, respectively, and saw combined sales of $2.3 billion last year. AbbVie expects that these drugs will ‘fill the gap’ in profits when the Humira patents expire in 2023, with up to $15 billion in sales by 2025. Humira is currently the main driver of AbbVie’s immunology portfolio, and provides $19.8 billion of the portfolio’s $22.2 billion in annual revenues, and a significant part of the company’s total sales. For the full year 2020, across all divisions, AbbVie saw $45.8 billion in revenues, with an adjusted diluted EPS of $10.56. In addition to its high-profile anti-inflammatory line, AbbVie also has a ‘stable’ of long-established drugs on the market. As an example, the company owns Depakote, a common anti-seizure medication. AbbVie also maintains an active research pipeline, with scores of drug candidates undergoing studies in the disciplines of immunology, neuroscience, oncology, and virology. For investors, AbbVie has a long-standing commitment to returning profits to shareholders. The company has an 8-year history of keeping a reliable – and growing – dividend. In the most recent declaration, made this month for a payment to go out in May, AbbVie raised the dividend 10% to $1.30 per common share. At $5.20 annualized, this gives a yield of 4.9%. Once again, we are looking at stock that embodies some of Dalio’s advice. Pulling the trigger on ABBV in the fourth quarter, Dalio’s firm purchased 25,294 shares. At current valuation, this is worth $2.66 million. Leerink analyst Geoffrey Porges covers ABBV, and is impressed with the way that the company is preparing in advance for the loss of US exclusivity on its best-selling product. “Between ABBV’s ex-Humira portfolio’s growth trajectory and a broad portfolio of catalysts across early-, mid-, and late-stage assets, it is hard to find a biopharma company that is better positioned, even with their looming LOE. ABBV is prepared for 2023, and has growth drivers to drive better than industry average top- and bottom-line growth in the period before (2021-2022) and after (2024-2028) 2023,” Porges opined. Porges gives ABBV an Outperform (i.e. Buy) rating, and sets a $140 price target that indicates room for a 33% one-year upside. (To watch Porges’ track record, click here) Overall, there are 10 reviews on ABBV shares, and 9 of those are to Buy – a margin that makes the analyst consensus rating a Strong Buy. The stock is trading for $105.01 and has an average price target of $122.60. This suggests an upside of ~17% over the next 12 months. (See ABBV stock analysis on TipRanks) To find good ideas for 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.

Ethereum Hits USD 2,000, Outshined by Bitcoin (UPDATED)

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Source: Adobe/duncanandison

The two largest cryptoassets, bitcoin (BTC) and ethereum (ETH), are on their journey of discovering new all-time highs. (Updated on February 1, 06:13 UTC, with the latest market data and comments from Elon Musk.)

Despite its recent high fees-caused problems that helped competitors grow, ETH surpassed USD 2,000 today for the first time, while BTC, which is still a USD 1trn asset, rallied above USD 56,000.

On Sunday (06:08 UTC), ETH trades at USD 1,951, correcting lower from its new all-time high of USD 2,043. The price is down by 3.8% in a day, trimming its weekly gains to less than 8%.

High ETH fees are dampening the rally as DeFi users are migrating towards competing, more centralized chains such as Binance Smart Chain, while competitors are using every opportunity to criticize ETH.

However, at the same time, ETH supply available for trading has been decreasing recently:

ETH locked in DeFi jumped by 16% in a bit more than a month, reaching ETH 7.7m (USD 15bn).

ETH sent to the ETH 2.0 deposit contract, where it’s being locked for many months, surpassed ETH 3m (USD 5.9bn).

Grayscale Ethereum Trust received ETH 222,958 (USD 435m) since its reopening in February.

Meanwhile, at the same time, BTC is trading at USD 56,789, after it hit USD 57,851 yesterday. The price is up by 1.5% in a day and 21% in a week.

The prices of the two largest cryptoassets corrected after Tesla’s Elon Musk said that “BTC & ETH do seem high.” However, both BTC and ETH have rebounded since then with bitcoin showing more strength.

@PeterSchiff That said, BTC & ETH do seem high lol — Elon Musk (@elonmusk)

However, in April 2020, Musk also said that “Tesla stock price is too high.”

@elonmusk Bitcoin price is too low imo — Bitcoin (@Bitcoin)

Since then, the price of one of the hottest stocks went up by 458%. In the same period of time, BTC rallied by 572%, while ETH skyrocketed by 892%.

“I was expecting [BTC] to touch [the USD 50,000] level so that the media could get some headlines and then pull back somewhat considering the relentless one-way move we’ve seen the past 90 days but it’s so far holding up well above USD 50,000 so there is very solid demand holding it up. Still expect strength in the medium term but don’t think it will be without some volatility in both directions,” Jeffery Wang, Head of America’s at the Amber Group, said in an emailed comment.

Also, according to Philip Gradwell, Chief Economist at Chainalysis, low BTC inflows to exchanges and high trade intensity when the price is rising suggests that bitcoin available to buy is falling while demand is rising, which indicates prices should rise.

“However … there may be an increase in trading off of exchanges, for example via Over The Counter (OTC) brokers. So exchanges may not be giving a full picture of market conditions,” he wrote in his newsletter, adding that large investors appear to have reduced their holdings by BTC 192,000 in the week of 8 February.

“It feels to me that we are in a ‘wait and see’ moment,” Gradwell said, noting that while large investors seem to be cautious now, this is being balanced by retail demand on exchanges, which often follows the momentum of the market.

However, one of the most bullish non-crypto companies, US-based software developer MicroStrategy, confirmed yesterday that they were able to borrow over USD 1bn “for free” in order to buy more BTC, showing how strong demand from large investors is.

“The trend is clear: we are in a phase where some people are getting hilariously rich. The last phase of this was late 2017, but the realized gain on exchanges then was half of what it is now. And the gains being made now are equal to half of all the gains that have ever been made,” Gradwell concluded, adding that if all the bitcoin ever deposited on exchanges was bought immediately and then only sold when it was withdrawn, the profit from that trade so far would be USD 78bn.

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