Cryptocurrency update: ETH hits new record high

It seems like every couple of weeks a crypto token smashes a new record high. This week, it’s the turn of Ether. Supporting the ETH push is a new Mastercard survey suggesting a bright future for cryptocurrencies is coming, alongside S&P’s launch of three new crypto indexes.

Cryptocurrency update

ETH smashes new record high

Ether, the token for the Ethereum blockchain, broke new record highs in early trading on Tuesday 4th May. Extending its rally, ETH peaked at $3,456.57, before dropping back down to around the $3,340 level. At the time of writing, Ether is currently trading at roughly $4,414.

ETH has gained 360% in 2021 so far. That makes it one of the big crypto winners for the year to date so far.

What’s behind the Ether drive? There are a couple of big factors at play.

First is the fact interest in cryptocurrency in general has soared across the year so far. Bitcoin has made major gains, as has ETH, Ripple, and other in-demand tokens. It’s partly driven by consumer interest, but also by major institutional support. Companies like Tesla, for instance, have started to dabble in crypto acquisition to add to their balance sheets, focussing on BTC and ETH in particular.

For Ether’s rise though, there is a functionality aspect. Ethereum itself is a platform that developers working in the decentralised finance (DeFi) space are latching onto in increasing numbers. Ether is used to power smart contracts, i.e. transactions, on the Ethereum blockchain. Developers using the blockchain basically have to use Ether.

Increasing interested in DeFi applications is rising. These are blockchain-based financial services, such as lending, which could in theory bypass banks and brokerages.

Last month, the European Investment Bank said it issued its first ever digital bond on a public blockchain using Ethereum.

S&P launches crypto indexes

S&P Dow Jones has launched three cryptocurrency indexes.

The indexes are now live under the following ticker symbols:

  • SPBTC – Bitcoin
  • SPETH – Ether
  • SPCMC – “Mega cap” combo of both BTC & ETH

S&P hopes its crypto indexes will help Wall Street traders further understand and make moves on digital tokens’ performance. It’s also a big step in helping further legitimise cryptocurrency trading with institutions, individual traders, and the wider market.

Each index relies on data supplied by Lukka. It also uses Lukka’s fair pricing methodology, which lists asset prices in points instead of dollars. Monday 3rd May’s initial afternoon readings were:

  • 7,611 – BTC
  • 24,811 – ETH
  • 5,617 – Mega cap

The indexes will measure “price appreciation”, and not price action, according to S&P’s Ray McConville.

“So, comparing the two indices, we can see that Bitcoin YTD has grown 95.67% in value vs. ETH, which has grown 273.72% in value YTD,” McConville said. “The actual index value isn’t so much as important as the change in that index value over time.”

These are not the only crypto-tracking indexes available. Bloomberg and partners Galaxy launched a cryptocurrency index in April 2018.

MasterCard poll finds bright future for crypto

Tentative but encouraging market research from MasterCard suggests higher global cryptocurrency adoption is coming.

Results from an online survey published on May 4th, 2021 reveals 40% of respondents plan on using or purchasing cryptocurrency in 2022.

The poll was conducted in 18 countries by Mastercard and Harris Insight and Analytics, surveying 15,586 people.

With probably no surprise, the group with the most enthusiasm for digital currencies was Millennials:

  • 67% said they were more open to using the technology than they were a year ago
  • 77% said they were interested in learning more about it
  • 75% said they would use crypto if they understood it better

“Work is still required to ensure consumer choice, protection, and regulatory compliance,” Mastercard said in a press release.

Mastercard, like rival Visa, is keen to capitalise on the crypto boom. The company announced in February 2021 it was providing more options for customers who wanted to settle transactions with digital currencies. It is also powering the new Gemini crypto credit card.

Earnings season: estimate-topping stocks to watch

It’s the final week of April: a time that traditionally brings opportunities for earnings-driven volatility.

Many companies reporting their quarterly earnings have strong track records of beating analyst estimates and subsequently seeing their share prices rise.

Bespoke Investment Group, as reported by CNBC, has pulled together the below list of firms that, 90% of the time, beat estimates, and enjoy average day-after jumps of at least 1%.

Stock Company EPS beat % Average 1 day % price move
TDY Teledyne Tech 100 2.18
AVNT Avient 100 1.5
TRU TransUnion 100 1.27
NGVT Ingevity 100 1.74
GFF Griffon Corp 100 11.41
OPI Office Properties 100 2.62
UFI Unifi Inc 100 2.33
CSGP CoStar Group 96.7 2.18
EXPO Exponent 96.6 1.56
SHOP Shopify 95.7 3.54
PATK Patrick Industries 94.7 1.2
JBT JBT Corp 93.5 1.75
MA MasterCard 93.2 2.09
SLAB Silicon Labs 92.3 1.29
SYNH Syneos Health 92.3 3.22
FB Facebook 91.4 2.52
SPSC SPS Commerce 90.7 1.66
ABBV AbbVie 90.3 1.26
SPGI S&P Global 90 1.6

 

These reports suggest earnings are off to a great start this quarter. Companies have so far reported aggregate earnings 23.6% above expectations, according to FactSet. If the trend continues, then we’ll be looking at the highest surprise percentage since FactSet began recording the metric in 2008.

Interestingly, amongst the megacap tech companies reporting this week, Facebook is the only one to make the list. Bespoke highlights its average day-after jump of 2.5%. Facebook reports quarterly earnings today after the closing bell.

Facebook’s average analysts’ price target was up approximately up 14% over Friday’s level on Tuesday, trading at $342.37 per share, feeding into potential longer-term upsides.

Shopify, the Canadian e-commerce company, has consistently been one of the fastest growing stocks for the past 3 years. Since 2018, Shopify shares have grown a massive 700%.

MasterCard is also a bit of a big hitter with a proven ability to come out above analysts’ expectations. The credit card firm beats predictions 93% of the time. MasterCard currently enjoys an 85% buy rating on Wall Street, reports FactSet, with the stock up 9% year-to-date.

Looking to small caps, some of those on Bespoke’s list as consistently punching above their weight, estimates-wise, include Office Properties Income Trust and TransUnion.

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