That's because there are many out there that offer a simple, diversified way to tap into the next decade of disruption.

Three that stand out as explosive opportunities that could be worth buying and holding for years to come are named below. Here's what you need to know about them:

BetaShares Australian Technology ETF (ASX: ATEC)

The BetaShares Australian Technology ETF provides investors with exposure to homegrown innovators such as WiseTech Global Ltd (ASX: WTC), Xero Ltd (ASX: XRO), TechnologyOne Ltd (ASX: TNE), and NextDC Ltd (ASX: NXT).

One company that highlights the long-term potential of this ETF is WiseTech Global. Its CargoWise platform is used by the world's largest logistics companies and has become the industry standard for managing global supply chains. As freight operators continue digitising and automating their networks, WiseTech's pricing power, global reach, and sticky customer base give it a long runway for growth.

Betashares recently recommended this fund to investors.

BetaShares Crypto Innovators ETF (ASX: CRYP)

For investors willing to embrace higher volatility in exchange for higher potential returns, the BetaShares Crypto Innovators ETF could be worth a shout.

It provides exposure to the stocks that are building the global cryptocurrency and blockchain ecosystem. Its holdings include digital asset exchanges, mining companies, and blockchain development firms such as Coinbase Global (NASDAQ: COIN), Marathon Digital Holdings (NASDAQ: MARA), and Riot Platforms (NASDAQ: RIOT).

Coinbase is the leading U.S. crypto exchange, it benefits directly from increasing institutional adoption of digital assets, rising transaction volumes, and the broader growth of decentralised finance applications. As blockchain technology continues to expand beyond trading into payments, tokenisation, and real-world applications, companies like Coinbase could play a central role.

While BetaShares Crypto Innovators ETF is not for the faint-hearted, over a long investment horizon, the potential upside of the digital asset industry could be substantial.

BetaShares Video Games and Esports ETF (ASX: GAME)

Gaming has evolved from a hobby into one of the world's largest entertainment industries. So much so, it is now bigger than the movie and music sectors combined.

The BetaShares Video Games and Esports ETF gives investors exposure to the companies driving that growth, including Tencent Holdings (SEHK: 700), Nintendo, and Electronic Arts (NASDAQ: EA).

A standout holding is Nintendo. Its iconic franchises, such as Mario to Zelda, continue to generate billions in global sales, while its hybrid Switch console remains one of the best-selling gaming systems ever. With esports expanding, digital sales rising, and subscription-based gaming becoming mainstream, companies in this ASX ETF's portfolio are well placed to benefit from lasting consumer trends rather than short-lived fads.

The BetaShares Video Games and Esports ETF provides a simple way to invest in an industry with massive and enduring global demand. It was also recently recommended by analysts at Betashares.

The post 3 explosive ASX ETFs to buy and hold appeared first on The Motley Fool Australia.

That's because rather than trying to pick a single winning stock, ETFs allow you to buy a basket of stocks in one fell swoop.

But which ASX ETFs could be good options for Aussie investors today? Let's look at three top picks for investors in November. They are named below:

Betashares Cloud Computing ETF (ASX: CLDD)

The Betashares Cloud Computing ETF could be a top pick for Aussie investors. It provides exposure to global cloud leaders such as Shopify (NASDAQ: SHOP), Snowflake (NYSE: SNOW) and ServiceNow (NYSE: NOW).

These are enabling businesses to manage and analyse sales and data more efficiently. And with cloud services now essential for AI, remote work, and cybersecurity, this ASX ETF offers investors a front-row seat to the cloud transformation.

It was recently tipped as one to consider buying by the team at Betashares.

Betashares Crypto Innovators ETF (ASX: CRYP)

For investors with a higher tolerance for risk, the Betashares Crypto Innovators ETF could be worth considering.

It provides exposure to stocks that are building the digital asset ecosystem. While the crypto market has seen its fair share of volatility, the long-term opportunity in blockchain technology, tokenisation, and decentralised finance remains significant.

The Betashares Crypto Innovators ETF's holdings include stocks such as Coinbase (NASDAQ: COIN), which is one of the largest cryptocurrency exchanges, and Marathon Digital Holdings (NASDAQ: MARA), which is a key Bitcoin miner. While volatile, these businesses are positioned to benefit if digital assets continue their march into mainstream finance.

Betashares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ)

A third ASX ETF that could be a buy is the Betashares Global Robotics and Artificial Intelligence ETF.

This fund is designed to capture growth from one of the defining megatrends of our time, automation and artificial intelligence (AI).

It provides easy exposure to stocks that are building robots, AI software, and technologies that are reshaping industries. Its holdings include Intuitive Surgical (NASDAQ: ISRG), which is a pioneer in robotic-assisted surgery, and Nvidia (NASDAQ: NVDA), whose chips power much of today's AI revolution.

With adoption of AI expected to accelerate over the coming decades, the Betashares Global Robotics and Artificial Intelligence ETF gives investors an easy way to ride this structural growth wave.

The team at Betashares also recently tipped it as one to buy.

The post Where to invest $5,000 in ASX ETFs in November appeared first on The Motley Fool Australia.

By buying a single ETF, you can instantly access a diversified basket of stocks and industries, cutting out the need to pick individual winners.

With $2,000, you could spread your investment across a few high-potential options. Here are three ASX ETFs that could be among the best to buy next month.

Betashares Nasdaq 100 ETF (ASX: NDQ)

The first ASX ETF to consider in October is the Betashares Nasdaq 100 ETF. It gives investors access to some of the world's most influential technology stocks. This includes Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA), and Tesla (NASDAQ: TSLA). These businesses have been at the forefront of innovation in areas such as artificial intelligence, cloud computing, and electric vehicles.

The Betashares Nasdaq 100 ETF has been one of the ASX's most popular ETFs for years, and for good reason. The US tech sector has delivered stellar long-term returns, and many of these stocks remain positioned for further growth as digital transformation accelerates globally. For Australian investors, it is one of the easiest ways to participate in Silicon Valley's success.

Betashares Cloud Computing ETF (ASX: CLDD)

Another ASX ETF to look at is the Betashares Cloud Computing ETF. It focuses on stocks leading the shift to cloud-based services. Holdings include names like Amazon (NASDAQ: AMZN), Shopify (NASDAQ: SHOP), and Snowflake (NYSE: SNOW). These are businesses allowing organisations worldwide to move their infrastructure, data, and software into the cloud.

This isn't just a passing trend. Cloud adoption continues to rise as companies seek more efficient, scalable, and secure ways to operate. With artificial intelligence and data analytics increasingly powered by cloud platforms, this fund gives investors exposure to one of the most critical foundations of the digital economy. It was recently named as one to consider buying by Betashares.

Betashares Crypto Innovators ETF (ASX: CRYP)

Finally, for those who want a more adventurous slice of their portfolio, the Betashares Crypto Innovators ETF provides exposure to stocks shaping the cryptocurrency and blockchain sectors. It includes names like Coinbase (NASDAQ: COIN), Riot Platforms (NASDAQ: RIOT), and Galaxy Digital (NASDAQ: GLXY), which stand to benefit as digital assets gain broader acceptance.

While this ETF is more volatile than traditional market exposures, it offers investors a way to tap into the growth of blockchain technology without needing to buy individual cryptocurrencies directly. For those willing to stomach the ups and downs, the Betashares Crypto Innovators ETF could provide powerful long-term upside.

The post 3 of the best ASX ETFs to buy in October with $2,000 appeared first on The Motley Fool Australia.

Exchange-traded funds (ETFs) remain one of the simplest ways to build wealth, offering instant diversification and exposure to powerful long-term themes.

Here are three fantastic ASX ETFs that could be worth considering in September.

Betashares Asia Technology Tigers ETF (ASX: ASIA)

The technology boom isn't just happening in Silicon Valley. Across Asia, some of the world's most innovative companies are leading the charge in semiconductors, e-commerce, and digital services.

The Betashares Asia Technology Tigers ETF provides investors with easy exposure to these giants, including Tencent (SEHK: 700), Taiwan Semiconductor Manufacturing Co. (NYSE: TSM), Alibaba (NYSE: BABA), and PDD Holdings (NASDAQ: PDD).

With billions of consumers becoming increasingly connected and mobile-first, Asia's digital transformation is only getting started. The Betashares Asia Technology Tigers ETF gives Australian investors a direct way to capture this growth story.

Betashares Crypto Innovators ETF (ASX: CRYP)

For investors seeking a higher-risk, higher-reward opportunity, the Betashares Crypto Innovators ETF could be one to consider in September.

It offers exposure to the companies driving adoption of digital assets and blockchain technology. Its holdings include global leaders like Coinbase (NASDAQ: COIN), MicroStrategy (NASDAQ: MSTR), and crypto mining firms that are central to the ecosystem.

While volatile, the crypto sector has shown its ability to bounce back from downturns. With growing institutional adoption and blockchain use cases expanding, the Betashares Crypto Innovators ETF provides a convenient way to gain diversified exposure to this emerging theme through the ASX.

Betashares Diversified All Growth ETF (ASX: DHHF)

Finally, thr Betashares Diversified All Growth ETF is designed as an all-in-one growth portfolio.

It holds a globally diversified mix of low-cost index funds covering Australian, U.S., European, Asian, and emerging market shares. That means with just one trade, investors get exposure to thousands of companies worldwide — from Apple (NASDAQ: AAPL) to Toyota (TYO: 7203).

For those looking to build wealth through compounding, the Betashares Diversified All Growth ETF is a simple, no-fuss way to gain long-term exposure to global equities without having to pick and manage multiple funds. It was recently named as one to consider by Betashares.

Foolish takeaway

Whether it is the explosive growth potential of Asian tech, the emerging world of cryptocurrencies, or a simple globally diversified growth portfolio, these three ETFs offer something for every investor. Held for the long term, they could provide a strong foundation for compounding wealth well beyond September.

The post 3 fantastic ASX ETFs to buy in September appeared first on The Motley Fool Australia.

Some ETFs focus on regular indices, whereas others focus on themes with the potential to deliver outsized returns.

Today we are going to look at the latter and three explosive ASX ETFs in particular that could reward patient investors over the coming decade and beyond. They are named below:

Betashares Crypto Innovators ETF (ASX: CRYP)

The Betashares Crypto Innovators ETF offers exposure to the world of cryptocurrencies and blockchain technology — without having to directly buy and store digital assets yourself. It invests in global companies building the infrastructure and services that support crypto adoption.

Holdings include Coinbase Global (NASDAQ: COIN), one of the world's leading crypto exchanges, and Galaxy Digital (TSX: GLXY), which is an investment firm focused on digital assets.

While crypto markets can be extremely volatile, the underlying blockchain technology has a wide range of potential applications, from decentralised finance to supply chain management. For investors who believe in the long-term growth of this space, the Betashares Crypto Innovators ETF offers an easy way to gain diversified exposure.

Betashares Global Cybersecurity ETF (ASX: HACK)

Cybersecurity has become one of the fastest-growing areas of technology, as businesses and governments increase spending to protect critical systems from cyberattacks.

The Betashares Global Cybersecurity ETF invests in leading cybersecurity companies like CrowdStrike (NASDAQ: CRWD), Palo Alto Networks (NASDAQ: PANW), and Fortinet (NASDAQ: FTNT). These businesses provide software, hardware, and services that safeguard data and defend against evolving threats.

With cyberattacks on the rise and the shift to cloud computing and remote work increasing the need for digital protection, the companies in this fund look set to benefit greatly.

Betashares Asia Technology Tigers ETF (ASX: ASIA)

Finally, the Betashares Asia Technology Tigers ETF targets some of the most dynamic technology companies across Asia (excluding Japan).

This allows investors to tap into a region experiencing rapid digital adoption and a growing middle class.

The fund's top holdings include TSMC (NYSE: TSM), which is the world's largest semiconductor manufacturer; Meituan (SEHK: 3690), a major player in food delivery and local services; and PDD Holdings (NASDAQ: PDD), one of China's fastest-growing e-commerce platforms and the owner of Temu.

With Asia expected to lead global economic growth in the coming decades, the Betashares Asia Technology Tigers ETF gives investors exposure to technology leaders at the heart of that transformation.

The post 3 explosive ASX ETFs to buy for big potential returns this decade and beyond appeared first on The Motley Fool Australia.

For those with $5,000 to invest, exchange-traded funds (ETFs) can provide simple, diversified exposure to some of the most powerful trends shaping global markets.

Here are three ASX ETFs that could be worth considering as we move into the new month.

Betashares Crypto Innovators ETF (ASX: CRYP)

For investors with a higher risk appetite, the Betashares Crypto Innovators ETF could be worth considering. It offers exposure to the rapidly growing cryptocurrency and blockchain sector. But rather than holding digital coins directly, this ASX ETF invests in companies building and supporting the digital asset ecosystem — from crypto exchanges and miners to blockchain infrastructure firms.

While the sector remains volatile, growing institutional adoption and the development of regulated crypto markets could provide long-term tailwinds.

Its holdings currently include Coinbase Global (NASDAQ: COIN), Marathon Digital (NASDAQ: MARA), and MicroStrategy (NASDAQ: MSTR). These are businesses that are helping to build the infrastructure and applications around digital assets.

Betashares Global Quality Leaders ETF (ASX: QLTY)

The Betashares Global Quality Leaders ETF could be another ASX ETF to look at. It focuses on high quality companies with strong balance sheets, high returns on equity, and steady earnings growth. This could make it an appealing option for investors who want a degree of resilience in uncertain markets.

The ETF's holdings include companies like Visa (NYSE: V), a global payments leader benefiting from the ongoing shift toward cashless transactions, and Netflix Inc (NASDAQ: NFLX), an entertainment giant with over 300 million subscribers. These quality-driven businesses help anchor portfolios through volatility while still offering growth potential.

Betashares recently tipped this fund as one to consider buying.

Betashares Cloud Computing ETF (ASX: CLDD)

Cloud computing is one of the most important growth drivers in global technology, with businesses investing heavily in scalable, secure infrastructure. The Betashares Cloud Computing ETF provides exposure to leading names like Snowflake (NYSE: SNOW), a data warehousing and analytics specialist, and Twilio (NYSE: TWLO), which powers cloud-based communication services used by companies around the world.

As artificial intelligence becomes more integrated into enterprise operations, demand for cloud-based services is likely to accelerate, positioning the fund's holdings to benefit from this multi-year trend.

For this reason, it was no surprise to see Betashares recently tip it as one to buy.

The post Invest $5,000 into these ASX ETFs in August appeared first on The Motley Fool Australia.

That's because there are a growing number of exchange traded funds (ETFs) out there for investors to choose from.

But which ones could be buys for Aussie investors right now?

To narrow things down lets take a closer look at five ASX ETFs that could be worth considering if you have $2,000 to invest into the share market this week. They are as follows:

Vanguard MSCI Index International Shares ETF (ASX: VGS)

The first ASX ETF for investors to look at is the Vanguard MSCI Index International Shares ETF. It gives you exposure to around 1,200 large and mid-cap companies from developed markets — including the US, Japan, the UK, and Europe. It is a low-cost, highly diversified way to invest in the world's most established economies and industries.

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

Another ASX ETF for investors to look at is the VanEck Morningstar Wide Moat ETF. It holds a concentrated portfolio of US companies that analysts believe have sustainable competitive advantages. It also blends in value by selecting stocks trading at attractive prices relative to their fair value. Current holdings include giants such as Walt Disney (NYSE: DIS), Boeing (NYSE: BA), and Nike (NYSE: NKE).

Betashares Asia Technology Tigers ETF (ASX: ASIA)

A third ASX ETF to look at is the Betashares Asia Technology Tigers ETF. It is focused on leading tech companies across Asia, including Tencent, Alibaba, Samsung, and PDD Holdings. For investors who want exposure beyond Silicon Valley, this fund taps into one of the fastest-growing digital economies on the planet.

Betashares Crypto Innovators ETF (ASX: CRYP)

If you are bullish on the long term outlook of cryptocurrencies but don't want to invest in coins then this ASX ETF could be for you. It offers investors exposure to the companies building the crypto economy. This includes exchanges like Coinbase (NASDAQ: COIN), as well as miners and blockchain infrastructure providers.

Betashares Australian Quality ETF (ASX: AQLT)

A final option for Aussie investors to consider buying is the Betashares Australian Quality ETF. It is a smart way to own high-quality ASX shares with strong balance sheets, low debt, and stable earnings. In many respects, this is a refined version of the ASX 200 index, which could be ideal for long-term compounding. It was recently named as one to consider buying by the team at Betashares.

The post 5 excellent ASX ETFs to buy with $2,000 appeared first on The Motley Fool Australia.

And for ASX investors, exchange-traded funds (ETFs) offer one of the easiest ways to build a resilient portfolio that can ride out market cycles and capitalise on powerful global trends.

If you're looking to buy and hold for the next decade, here are three ASX ETFs that could make a strong case for a place in your portfolio.

Betashares Crypto Innovators ETF (ASX: CRYP)

While cryptocurrencies have endured bouts of extreme volatility, the infrastructure behind it is growing stronger by the year. The Betashares Crypto Innovators ETF provides exposure to a global portfolio of leading crypto-focused businesses – not the tokens themselves, but the picks and shovels of the digital asset economy.

This includes stocks like Coinbase (NASDAQ: COIN), one of the largest crypto exchanges in the world, Circle (NYSE: CRCL), which is a leading provider of stablecoins and related services, facilitating payments, commerce, and financial applications on the blockchain.

Over the next decade, if digital assets continue to mature as an asset class, and institutional adoption ramps up, this fund could benefit greatly while avoiding the direct volatility of individual coins.

Betashares Global Cybersecurity ETF (ASX: HACK)

With data breaches, ransomware attacks, and digital espionage on the rise, global governments and corporations are pouring billions into securing their infrastructure.

The Betashares Global Cybersecurity ETF allows investors to tap into this powerful trend, with exposure to global leaders like Palo Alto Networks (NASDAQ: PANW), CrowdStrike (NASDAQ: CRWD), and Fortinet (NASDAQ: FTNT).

These companies are on the front lines of digital defence – providing firewalls, endpoint protection, threat intelligence, and next-generation cybersecurity solutions.

As the world becomes increasingly connected – from smart homes to autonomous vehicles to remote workforces – demand for cybersecurity will only intensify. This bodes well for the companies held by the fund.

Betashares Global Quality Leaders ETF (ASX: QLTY)

What if you could build a portfolio of the world's most consistent performers – companies with fortress balance sheets, high returns on equity, and long-term profit stability? That's the idea behind the Betashares Global Quality Leaders ETF.

This ASX ETF doesn't chase hype or fleeting trends. Instead, it filters for quality. Its holdings are typically those that have weathered economic storms, grown earnings steadily, and operated with discipline.

In a world where hot stocks can come and go, this fund quietly compounds by backing businesses with proven operating histories and economic moats. Over a 10-year horizon, that kind of consistency can become very powerful. It was recently named as one to consider buying by the team at Betashares.

The post Top ASX ETFs to buy and hold for the next 10 years appeared first on The Motley Fool Australia.

Investment choices can provide insights into the mood of different investor demographics.

Data from broker Selfwealth Ltd (ASX: SWF) has revealed where investors have been putting their money in FY24 to date, from 1 July 2023 to 7 August 2023.

Most popular trades

Selfwealth has provided a list of ASX shares and investments that millionaire millennials have been trading in. It's sorted by the number of trades rather than the number of units or value of trades so that a few rich investors don't skew the results with large trades.

That said, here are the ASX investments with the most amount of trades:

BetaShares Geared Australian Equity (Hedge Fund) (ASX: GEAR) is an exchange-traded fund (ETF) that's betting on the S&P/ASX 200 Index (ASX: XJO) to rise. It borrows money to amplify the gains (and losses) made by the portfolio. Current gearing is 57%, which to some people may not be a comfortable level of borrowing for their own portfolios.

Global X Ultra Long Nasdaq 100 Hedge Fund (ASX: LNAS) is invested in 100 of the largest businesses on the NASDAQ 100 stock exchange while utilising futures contracts.

BetaShares Australian Equities Strong Bear Hedge Fund (ASX: BBOZ) is an ETF that enables investors to bet that the ASX 200 is going to fall by using futures. It uses leverage, which amplifies the returns and losses. Since its inception in April 2015, the ASX ETF has delivered an average return per annum of negative 20.3% to June 2023.

Vanguard Australian Shares Index ETF (ASX: VAS) is an ETF focused on 300 of the largest ASX shares.

BetaShares Crypto Innovators ETF (ASX: CRYP) is an ETF that's invested in global companies that provide exposure to the cryptocurrency economy. In this portfolio are names like Marathon Digital Holdings, Riot Platforms, and Coinbase Global.

Stanmore Resources Ltd (ASX: SMR) is an ASX coal share that has seen its share price rise to a much higher level than before Russia invaded Ukraine.

Other interesting data points

Looking at the wider millennial cohort, not just the rich ones, the largest number of trades involved ETFs. They were: the VAS ETF, Vanguard Diversified High Growth Index ETF (ASX: VDHG), Vanguard MSCI Index International Shares ETF (ASX: VGS), iShares S&P 500 ETF (ASX: IVV), and Betashares Nasdaq 100 ETF (ASX: NDQ).

Miners made up some of the most popular investments by the wider millennial cohort, including Fortescue Metals Group Ltd (ASX: FMG), Core Lithium Ltd (ASX: CXO), and Pilbara Minerals Ltd (ASX: PLS).

Non-millionaire baby boomers and Gen Xers liked trading in Core Lithium as well. It seems Gen X hasn't been doing much ETF trading. Millionaire baby boomers have, unsurprisingly, been trading a lot in ASX blue chips, and predominately selling the cash ETF Betashares Australian High Interest Cash ETF (ASX: AAA).

Meantime, millionaire Gen X investors have been interested in technology businesses like Advanced Micro Devices, Intel, and Quantumscape.

The post Top ASX shares wealthy young investors are buying right now appeared first on The Motley Fool Australia.

Nor does it stop the so-called professionals, including Goldman Sachs.

According to a Reuters report, the investment banking giant – famously described in 1999 by Rolling Stone journalist Matt Taibbi as a "great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money" – warned the US equity bear market is not over yet.

This is despite the S&P 500 having rallied 10% off its recent lows, with the ASX 200 index up 11% since the beginning of October. Excerpt:

Goldman Sachs on Monday warned that the global equity bear market is not over as the markets are yet to see a trough in the momentum of global growth deterioration, a peak in interest rates and valuations lowered to reflect a likely recession.

"We continue to think that the near-term path for equity markets is likely to be volatile and down before reaching a final trough in 2023", Goldman Sachs said in a note.

2) According to the Australian Financial Review, Morgan Stanley equity strategist Chris Nicol has set an ASX 200 index target at 7200 with a total return of 7 per cent. Excerpt: 

The range of outcomes is wide with a bullish forecast of 8100 or a 20 per cent return and a bearish forecast of 5900 or a negative 11 per cent return.

The firm is overweight energy, healthcare and diversified mining companies, and underweight banks, housing and consumer stocks.

"2023 looms as a year of peaking signals and stress. Australia lags in terms of tightening impact, with earnings and activity still to adjust. Index target [is] seen at 7200," Mr Nicol says.

At the close of trade on Tuesday, the S&P/ASX 200 Index (ASX: XJO) finished at 7181, almost bang on the target set by Morgan Stanley.

It seems Nicol is banking on the big dividends from the likes of BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO), and Woodside Energy Group Ltd (ASX: WDS) continuing into next year to get to his total return target of seven per cent.

3) A trading update today from discount apparel retailer Best & Less Group Holdings Ltd (ASX: BST) makes sombre reading for shareholders like myself. It also delivers pain to shareholders, with the Best & Less share price plunging more than 13% lower to $2.35. Excerpt:

After reporting +38.0% total sales growth for the first eight weeks of FY23, sales growth has since moderated, reflecting the delayed start to summer weather and supply chain delays.

While unaudited year to date (YTD) earnings to the end of October are in line with the prior corresponding period (PCP), a significant increase in sales growth from current levels is required to maintain this result for the first half.

Last week, I named Best & Less as "one consumer discretionary stock I'm playing for the coming economic slowdown". 

Today's update suggests trading has fallen off a cliff in recent weeks. I'm hopeful it's weather related, although subdued consumer confidence largely as a result of rising interest rates will no doubt have played a role. The big unknown is the competitive threat from the likes of Wesfarmers Ltd (ASX: WES) owned K-Mart, something that will be far more enduring than a bout of soggy weather.

Buying something because it's cheap – Best & Less shares previously traded at less than nine times earnings and on a fully franked dividend yield of over 9.1% – offers some level of downside protection, but not enough to offset a poor trading update and the real possibility that profits will fall. 

It's yet another reminder to myself that…

• Investing in the retail sector is incredibly tough, courtesy of the competitive and economic environment. 
• You are better to pay up for a quality company with a sustainable competitive advantage – one that can steadily compound earnings for years to come – than buying a mediocre company on the cheap, hoping it will re-rate before the inevitable profit warning.
• Investing is hard.

I'm holding onto my Best & Less shares for now. They are a small position in my diversified portfolio, and I hold out hope that trading will improve in the run-up to Christmas. I'm most certainly not adding to my position – even after today's sell-off, the risks are to the downside for Best & Less shares.

4) Crypto investors are in a world of hurt, with the Bitcoin price down 72% over the past 12 months.

Writing on Livewire, Coolabah Capital's Christopher Joyce says the crypto crash "bears the hallmarks of a standard non-bank financial crisis that inevitably arises every time there is a liquidity shock. Unfortunately, it is likely to get worse." Excerpt:

Non-banks, including many crypto concerns such as exchanges and coins, have almost no regulation and/or scrutiny. And they tend to be murky private businesses, run by anonymous individuals, often located in dubious jurisdictions, that are protected from the reporting demands of public market enterprises.

Most of what we see today in the crypto universe will die. There will surely be some residual winners, and there are doubtless some impressive technological innovations that will sustain. But anything of serious value will likely be absorbed by the traditional banking system. The dominant digital currencies of the future will be those issued and guaranteed by nation states.

As an equities person, I've happily let the whole crypto craze pass me by, not tempted by the once seemingly easy money on offer in months and years gone past. I've had no problems losing money this past year without adding crypto to my list of things to worry about.

Still, I never like to see people losing money, especially those who trusted the now-bankrupt FTX exchange with their crypto assets. They are staring down the barrel of a near-total loss.

I'd warn against trying to bottom-fish the crypto space. The current lack of trust in the asset class combined with a potential liquidity crunch means future returns are highly unpredictable and incredibly risky. There are surely easier ways to make money. 

5) That said, Cathie Wood of Ark Investment Management is wading into the space, scooping up shares of struggling cryptocurrency exchange Coinbase Global Inc (NASDAQ: COIN), despite the collapse of Sam Bankman-Fried's FTX. 

According to Bloomberg…

Wood's Ark Investment Management funds have bought more than 1.3 million shares of Coinbase since the start of November, worth about $56 million based on Monday's trading price, according to data compiled by Bloomberg. The shopping spree, which started just as FTX's demise began, has boosted Ark's total holdings by roughly 19% to about 8.4 million shares. That equates to around 4.7% of Coinbase's total outstanding shares.

The Coinbase share price has fallen almost 84% so far this year, outpacing the 64% fall in Cathie Wood's flagship ARK Innovation ETF. It's been a very tough year for growth investors, crypto and stocks alike.

The post Bear market not done yet says Goldman Sachs, while Morgan Stanley predicts dividends will be the driver of returns in 2023 appeared first on The Motley Fool Australia.

It's no surprise that 2022 has been a volatile year for both the capital and crypto markets. The days of meme stocks and mooning assets seem so long ago. Since its public debut in April 2021, Coinbase (NASDAQ: COIN) has been one of the most scrutinized stocks on the Nasdaq. It's become challenging to keep up with the company's developments amid increasing regulatory concerns over the crypto markets and waning investor enthusiasm.

Yet despite all of this turbulence, Coinbase has managed to make some significant progress. In this article, we are going to discuss how Coinbase has started laying the foundation to become a full-spectrum crypto conglomerate and mature beyond simply a trading exchange.

Big tech follows Wall Street 

Over the summer, Coinbase announced that it had partnered with asset-management firm BlackRock. More specifically, the partnership revolves around BlackRock's proprietary risk-management software called Aladdin. At a high level, Aladdin's software is leveraged by hedge funds and other financial institutions to process analytics across stocks, bonds, and foreign exchange currencies as well as derivatives and alternative assets. While that is an impressive roster of asset classes, do you see anything missing? Coinbase did.

According to a press release on Coinbase's blog, BlackRock selected the exchange to serve as its integrator to provide "crypto trading, custody, prime brokerage, and reporting capabilities to Aladdin's Institutional client base who are also clients of Coinbase." 

While this partnership is nascent, it is probably not a surprise that other large companies, albeit in different industries, took notice. Just last week, Internet behemoth Alphabet announced a strategic partnership with Coinbase. Let's explore why this is a big step forward for Coinbase and the crypto economy. 

Is this partnership a big deal?

There are a lot of moving pieces in Alphabet's deal with Coinbase, and both companies are well-positioned to benefit. 

Essentially, Alphabet has decided that it will allow its cloud customers to pay for its services in Bitcoin, Ether, or Dogecoin should they choose. Coinbase will be the technology powering these payments via its Coinbase Commerce offering. This is an interesting position for Coinbase because as Alphabet's cloud platform continues to grow, there is an argument to be made that Coinbase's infrastructure will power more transactions. The two biggest variables in question are the pace at which adoption of crypto payments moves, and the increasing number of crypto tokens supported by Google Cloud.     

While this is exciting for Coinbase, this is also a big win for Alphabet. While Amazon and Microsoft dominate cloud computing, Alphabet's platform, Google Cloud, is quickly gaining market share. According to the terms of the partnership, Coinbase "selected Google Cloud as a strategic cloud provider to build advanced exchange and data services. In addition, Coinbase will use Google Cloud's powerful compute platform to process blockchain data at scale, and enhance the global reach of its crypto services by leveraging Google's premium fiber-optic network." 

According to CNBC, Coinbase will move some of its existing applications away from Amazon's cloud platform, AWS. This is a huge deal for Alphabet. While it is still early innings, Coinbase's management has not allowed the crypto winter to deter its vision. Despite cratering asset prices and lower trading volumes, Coinbase's leadership has focused relentlessly on the wider adoption of crypto, especially with large institutions. 

Keep an eye on valuation

Owen Lau is an equity research analyst with Oppenheimer. He currently has a Buy rating on the stock and a projected price target of $107. During a recent interview, he was asked about the implications of this partnership and what it could mean for Coinbase.

Interestingly, although not surprising, Lau did not explicitly state whether this deal would impact Coinbase stock in the short term. Instead, his rationale is that since the markets are still operating in a crypto winter, investors are best served acting with caution.

Coinbase is slated to release third-quarter 2022 earnings on November 3. While there may be some near-term volatility leading up to earnings, prudent investors should wait until after the earnings release to make a decision about the stock. While Coinbase is trading well-off its highs, it is still very much a speculative stock to own. It is highly likely that investors will learn more about the company's progress with BlackRock, Alphabet, and any other potential partnerships during the call. 

One thing that is highly likely is that crypto is here to stay one way or another. Its role in the larger economy and financial markets will certainly evolve. However, investors should feel encouraged that the world's largest financial and technology firms are not only involved with crypto but are also partnered with Coinbase specifically. Coinbase could be a good stock to own for investors with a long-term market outlook. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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In early September, Coinbase Global's (NASDAQ: COIN) CEO, Brian Armstrong, appeared on CNBC to discuss his company's management of the crypto winter, his thoughts about particular cryptocurrencies, and where he thinks the market is headed in the coming months. 

Armstrong has been at the helm of Coinbase since he founded the company in 2012. Since then, the cryptocurrency market has gone through numerous boom-and-bust cycles. When Armstrong started his business, Bitcoin (CRYPTO: BTC) traded for less than $15. Today, it is hovering around $20,000, and Armstrong's net worth is believed to be around $2 billion. 

A challenging time, but there is reason for hope

Just because Armstrong is the CEO of one of the most popular cryptocurrency exchanges doesn't mean he knows exactly what will happen next in the crypto market.

But he has been around since just about the beginning of cryptocurrencies and has managed to keep his company afloat regardless of economic conditions. So when he shares his thoughts on the market today, people inevitably listen. 

In the CNBC interview, Armstrong was asked about the current crypto environment and what it could look like once it returns to healthier levels. Most notable were his comments on a transition from primarily retail investing in crypto to larger institutions now joining in.

Armstrong believes that one particular sector will drive the next wave of crypto adoption: big tech. He cited the agreement between Coinbase and the world's largest asset manager, BlackRock (NYSE: BLK).

In the agreement, the latter's investing software will integrate directly with Coinbase so BlackRock clients can purchase Bitcoin seamlessly.

Armstrong thinks that more and more companies will follow this business model in the future. Since these large companies typically have more money on hand than retail investors, he is optimistic that this influx of capital entering the crypto market could send it to heights we have yet to see. 

But until then, Armstrong's company faces an uphill battle as investors shy away from risky assets like cryptocurrencies due to poor macroeconomic conditions.

Coinbase primarily generates profits from the transaction fees it charges for trades. With less trade volume, Coinbase's profits are taking a severe hit. 

He was asked about when he sees the current crypto winter ending. He said that this one is a little different from other crypto winters in the past since it "happens to coincide with the broader macro environment coming down." He was mainly referring to rising inflation and climbing interest rates. 

Armstrong hopes that the macro environment improves in the next 12 to 18 months, allowing crypto to have a "nice recovery".

The main takeaway

Investors shouldn't hang on to every word that comes out of the mouths of billionaires, but they should consider these statements when making decisions because they may contain valuable insights.

Armstrong does have more experience in the crypto industry than just about anyone else, and his knowledge can be helpful in gaining more perspective on the sector's current position. 

Armstrong believes that there are cycles when it comes to crypto, similar to the stock market. The incredible growth that the sector experienced from 2020 to 2021 was not sustainable, and it was inevitable that some sort of correction would follow.

Suppose Armstrong is correct, and the market is in for a lackluster performance over the next year and a half. In that case, that means now could be the time for investors to take advantage of incredibly discounted prices in preparation for a return to a healthier market. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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It has been a tumultuous year in crypto, with prices falling dramatically since the start of the year but rallying this summer. Massive catalysts that will bring permanent changes to the second-largest cryptocurrency and the crypto world have arrived. With all of this going on, it's a good time to keep a long-term perspective and look at three top cryptocurrencies to buy and hold forever. 

1. Ethereum

The Merge, Ethereum's (CRYPTO: ETH) long-awaited transition from the proof-of-work consensus to proof of stake, was completed last week. 

While it has become a common misconception that The Merge will speed up transactions on the Ethereum network and lower fees, there will be other benefits. The transition to proof of stake will enable more Ethereum holders to participate in earning rewards from the network because they can now stake their Ethereum to earn a cut of transaction fees. While holders need to have 32 Ethereum and meet several other requirements to do this, plenty of third-party services like Coinbase (NASDAQ: COIN) allow customers with smaller amounts of Ethereum to commit their Ethereum to staking pools to earn interest. Coinbase currently pays out an annual percentage yield of 3.25% on staked Ethereum.

The Merge will also dramatically reduce Ethereum's carbon footprint, because power-hungry mining equipment will no longer be running night and day to produce blocks of Ethereum. Some sources estimate that Ethereum's pre-Merge energy consumption was equivalent to that of a country like Chile. Experts predict that the switch to proof of stake will reduce this energy intensity by over 99%, which is a big deal for the planet and for investors who may now feel more comfortable investing in Ethereum. 

The great thing about holding Ethereum for the long term is that while The Merge is a huge deal, Ethereum's developers aren't stopping there. Vitalik Buterin, Ethereum's co-founder, estimates that the blockchain will only be at 55% of its potential after The Merge. The Merge paves the way for sharding, in which the blockchain is split into many chains to ease congestion on the network, which should eventually help improve speed and lower fees once fully implemented. The level of progress so far and the future ambition make Ethereum, the second biggest crypto by market value, an asset to buy now and hold forever.  

2. Bitcoin 

While all eyes have been on Ethereum ahead of The Merge, Bitcoin (CRYPTO: BTC) has been quietly rebounding, gaining about 15% since hitting its cycle low of $17,664 in mid-June. 

After The Merge, Bitcoin, the No. 1 crypto by market value, will stand alone as the major proof-of-work asset atop the crypto world. Bitcoin proponents view Bitcoin's proof-of-work consensus as more secure than proof of stake and believe that The Merge will enhance Bitcoin's image as a secure decentralized network. I believe that both proof of work and proof of stake have their own merits and I view owning both Bitcoin and Ethereum as the most sensible approach for investors.  

Some have questioned Bitcoin's status as an inflation hedge as the price of Bitcoin has fallen this year in part due to rising inflation in the U.S. But it's important to remember that Bitcoin is a global network with users all over the world. Despite its decline this year, it still represents a viable and accessible safe-haven asset for individuals in countries with rampant long-term inflation, such as Turkey and Venezuela. The maximum supply of 21 million Bitcoin is an appealing feature in a world where governments are printing ever-increasing amounts of currency, decreasing the purchasing power of the existing currency in the process. I don't know if the price of Bitcoin will be higher or lower a week from now, but I feel good owning it as a potential hedge against future inflation and believe all investors can benefit from owning even just a small amount in their portfolios.  

3. Ravencoin 

With a market cap of $530 million and a ranking of 71 in terms of market cap, Ravencoin (CRYPTO: RVN) is much smaller and less established than Bitcoin or Ethereum. There is thus more risk when investing in Ravencoin, but there is substantial upside as well. Unlike Bitcoin and Ethereum, which have price points in the thousands of dollars, you can buy Ravencoin for just about $0.06. Ravencoin has posted a scintillating performance this summer, with a gain of more than 50% in the past 30 days alone.

Ravencoin's summertime surge is because it is a proof-of-work crypto that can be mined with GPU (graphics processing unit) mining equipment. All of the GPUs that were mining Ethereum needed somewhere to go after the Ethereum Merge, and Ravencoin is one of the most attractive destinations. Ravencoin's hash rate has surged, indicating that miners have already moved over to Ravencoin.

A short-term catalyst is all well and good, but here's why Ravencoin is much more than just a short-term trade. Ravencoin was created with the purpose of allowing individuals to create their own tokens. Users can burn 500 Ravencoin and make their own token that represents a real-world asset. An example of how this could be useful is real estate tokenization. A property owner could use Ravencoin to tokenize an investment property and divide it into 100 pieces. This would give property investors significantly more liquidity than they enjoy today and lower the barriers to entry for investing in real estate.

Bitcoin, Ethereum, and Ravencoin are all good choices to buy now and hold forever. Cryptocurrencies are volatile and are best suited for risk-tolerant investors. For these investors, buying the top cryptocurrencies now while the market is uncertain is a move that could pay off over the long run. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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A Coinbase (NASDAQ: COIN) executive just explained the best part of the long-awaited Ethereum (CRYPTO: ETH) Merge. Coinbase COO Emilie Choi pointed out Ethereum's most exciting strength -- and how the platform upgrade shines a spotlight on this quality.

The Merge is in the books now, and cryptocurrency investors should keep an eye on how Ethereum executes its move from a proof-of-work (PoW) platform to a proof-of-stake (PoS) system. In Choi's view, the journey is more important than the destination.

What is The Merge?

Around 2:40 a.m. ET on Thursday, Ethereum started merging its digital ledger with a new system, formerly running as a testing network known as the Beacon Chain. Ethereum's developers and blockchain node operators had executed a couple of mergers on smaller test networks, and all signs pointed to a successful platform upgrade on Ethereum's main network.

As expected, The Merge went off without a hitch. Leading crypto-trading platforms such as Coinbase, Kraken, Binance, and Robinhood Markets paused transactions for Ethereum and Ether-based tokens for a few hours, giving the technology update time to roll out. Today, Ethereum's transactions are validated by a much faster system that requires just 0.05% of the electric power that the old PoW platform consumed.

This game-changing move has been in the works for six years, and also sets the stage for three more rounds of important network upgrades. Ethereum co-founder Vitalik Buterin considers Ethereum's functionality to be 55% complete after The Merge, leaving plenty of room for further improvements.

What Choi said

That's where Emilie Choi comes in. Choi delivered this crucial insight at the annual Goldman Sachs Communacopia + Technology Conference earlier this week:

"I think the most important thing that [The Merge] represents is that there can be continued sustained technological development done by decentralized communities at scale," she said. "To me, that's the most important kind of takeaway about the Ethereum merge."

This is important. Like Buterin, Choi expects Ethereum to get better over time. This platform was designed with long-term flexibility in mind, allowing Ethereum to overcome expected challenges and uncharted surprises via platform updates. The Merge was a fantastic example of this capability, proving that the network can undergo truly fundamental changes without breaking the crypto platform.

The next few updates will continue to lower transaction costs and boost execution speeds. They will also introduce a work-sharing feature known as sharding, improve Ethereum's security model, and expand the system's scalability. In the long run, Ethereum will evolve to take advantage of improvements in computing systems. For example, the Ethereum network of 2030 might secure and validate its transactions with quantum computing systems.

What's good for the Ethereum goose may not be right for the Bitcoin gander

Every cryptocurrency indeed has some capacity for platform upgrades, but the Ethereum community takes this quality more seriously than most of its peers. Bitcoin (CRYPTO: BTC) has barely changed since its launch in 2009, apart from a few tweaks to tackle unexpected security issues. The unchanging nature of Bitcoin is an advantage because its holders can trust that the long-term supply is limited to 21 million coins.

However, the largest cryptocurrency should probably consider switching from PoW to PoS (or another validation system with lower computing and power requirements) someday. That change took years of planning and testing in the more flexible Ethereum community. Will we see a proof-of-stake version of Bitcoin in this decade? Probably not.

So the two leading crypto names are walking down strikingly different paths. One size does not fit all cryptocurrencies, and that's quite all right. Each digital coin was designed with a unique set of features and long-term goals, and those fundamental differences will always drive their development. In Ethereum's case, an openness to new ideas is the name of the game and investors should embrace that attitude.

The Merge showed us that even ambitious platform changes can take place without a hitch. As Choi said -- and Buterin would surely agree -- sustained development is the secret sauce in Ethereum's recipe for success.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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What happened 

Today's inflation report sent the crypto world reeling as a sell-off hit the entire industry. Headline inflation was 0.1% month over month in August, but core inflation (which excludes energy) was up 0.6%. On a year-over-year basis, overall inflation was 8.3%. The market had rallied in recent days on hope that inflation is slowing, but that doesn't appear to be the case, at least for now. 

Three of the big movers in crypto today are Coinbase Global (NASDAQ: COIN), which fell as much as 9.3% and is down 6.6% as of 2:30 p.m. ET; Silvergate Capital (NYSE: SI), which fell 7.4% and is now down 6.4%; and cryptocurrency Solana (CRYPTO: SOL), which is down 7.2% today. 

So what 

From a trading perspective, the move is pretty simple. Higher inflation likely means the Federal Reserve will increase interest rates for longer than investors were hoping. That results in a lower valuation for assets like stocks, especially growth stocks, and that's why the Nasdaq Composite is down 4.3% today. Crypto values are generally correlated with stocks, which is why crypto valuations plunged today. 

A drop in crypto prices is generally seen as negative for Coinbase and Silvergate, which offer crypto solutions to their customers. Coinbase's trading, for example, tends to fall in down markets and that's where the company generates most of its revenue. Silvergate may not see adoption of crypto and digital banking products increase if crypto values drop. 

As much as the crypto industry would like to think that it's independent of the broader market, trading has been driven by traditional financial trends like interest rates and economic activity. Given the fact that inflation is still high and the Federal Reserve is likely to act aggressively next week to increase rates, that means lower valuations for crypto and crypto-related companies. 

Now what 

The market is trying to grapple with multiple competing trends right now. Employment is strong and much of the economy is doing well, but inflation is high and interest rates are going up, which generally leads to a recession. 

As these macro factors persist, the crypto market continues to innovate and build, which is a chaotic process. There are days when it seems like crypto could enable great innovations and others that it seems like hacks and scams are more common than real builders. 

I think the crypto industry has a lot going for it long-term, but this is like investing in internet stocks in the 1990s when the industry was very immature. No one knew exactly which companies would win or what business models would be best, but it was clear there was an opportunity.

As painful as days like this are, they can also be great buying opportunities. A few years from now no one will remember a single day's drop, but investors never forget buying great companies when the market is down because that's where the big money is made. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Crypto stocks plunged today appeared first on The Motley Fool Australia.

What happened 

The crypto market is once again seeing a lot of volatility, but right now the moves have been positive. Investors are moving back into crypto assets broadly, and the big cryptocurrencies are leading the way. 

At 11:40 a.m. ET on Thursday, Bitcoin (CRYPTO: BTC) was up 2% in the last 24 hours, Ethereum (CRYPTO: ETH) was up 6%, and Solana (CRYPTO: SOL) has risen 7.3%. These major tokens have pulled the entire crypto space higher. 

So what 

The theme of the day is regulation, and there were mixed signals for the crypto industry. Securities and Exchange Commissioner (SEC) Chairman Gary Gensler said in a speech this morning that the agency has all of the rules it needs to regulate cryptocurrencies. Gensler reiterated that he thinks "most crypto tokens are investment contracts," which would indicate that most cryptocurrencies will need to be registered as securities, in his eyes.

Gensler's comments followed those of Michael Barr, a member of the Federal Reserve Board of Governors who is in charge of regulating U.S. banks. Barr said he's pushing for congressional action on stablecoins. In his view, stablecoins can present systemic risk, and investors should have transparency around how they work and what they own. This might mean increased scrutiny for cryptocurrencies, but Barr doesn't seem hostile to the industry.

The push for increased regulatory oversight isn't surprising, but it's taking a long time for Congress and federal agencies to finalize rules for the industry. Gensler would like companies like Coinbase Global (NASDAQ: COIN) to register as brokers and have increased disclosures from token operators, whether they're companies or decentralized organizations. 

In a very surprising move, Coinbase also announced that it is funding a lawsuit brought by six people who are challenging the Treasury Department's sanction of Tornado Cash open-source smart contracts and its users. This is an aggressive move by Coinbase to push back against regulators who are starting to having an effect on commonly used crypto products.

Coinbase acknowledged that Tornado Cash could have been used by criminals, but that doesn't mean the code itself or other users of the code should be affected by sanctions. This will take time to play out, but Coinbase is planting a flag on the side of crypto developers. 

Now what 

Every day there seems to be another big move in cryptocurrencies, and today the market is more bullish on the space. While there's a lot of regulatory uncertainty, I do see a willingness to find regulatory solutions for the industry that will encourage innovation. 

At the same time, it's interesting that Coinbase, which has tried to be friendly with regulators, is aggressively defending the industry through funding the Tornado Cash lawsuit. That could give it some good public relations within the community, for now. 

I see today's moves as typical volatility, but investors will want to watch regulators' actions in the crypto space. Some tokens could eventually become securities, and it's possible that companies will need to register with the SEC as well. It's all part of the maturation of crypto as an industry. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Bitcoin, Ethereum, and Solana were up Thursday morning appeared first on The Motley Fool Australia.

What happened 

The crypto market was moving higher for most of the day on Wednesday despite the fact that the stock market was moving lower. There wasn't any major news driving token prices upward, but there were small steps toward mainstream crypto adoption. Credit Suisse disclosed in a filing that it held $31 million in "digital assets" for clients last quarter and Binance froze a wallet related to a Russian gun manufacturer, which shows even the biggest exchanges are complying with international sanctions.

As of 1 p.m. ET, shares of Coinbase (NASDAQ: COIN) were up 1.4% for the day after having climbed by as much as 5% in early trading. Ethereum (CRYPTO: ETH) was up 4.2% in the last 24 hours and NEXO (CRYPTO: NEXO) was up by 7.3%. 

So what 

The biggest news of the day was that crypto lending platform Nexo announced it was authorizing a $50 million buyback plan for its native crypto token. The company authorized a $100 million buyback plan in November; this authorization adds on to that. 

Nexo has been in discussions with investment bankers about the possibility of it acquiring distressed crypto companies like Celsius Network, Voyager Digital, and BlockFi, or their assets. Management of Nexo said the buyback authorization was intended to show that the company has a "solid liquidity position."

It's also possible Nexo could do what it called "token mergers," which would be an innovation in the crypto space. Nonetheless, Nexo is telling the market that it is in a strong financial position and that news is being received well right now. 

Lending has become a difficult business model in cryptocurrency, with companies balancing on-chain and off-chain risks that are evolving quickly. During the collapse of Three Arrows Capital, on-chain lending held up well because collateral could be seized if loans weren't repaid as contracts stated. Off-chain lending became more problematic because the risks weren't well understood by counterparties who thought their assets were safe. Nexo has navigated this space so far, and now it's trying to consolidate power before the next crypto boom. 

Now what 

Wednesday's moves upward were mostly driven by volatility in the crypto market and shouldn't sway your long-term investment thesis. Values are moving higher or lower daily on little more than the market's whims. 

What I do take from the day's news is that a company like Nexo being bullish is a signal that the worst of the 2022 crypto lending crisis is behind us. It seems that the industry went through a rapid process of exposing risk and crushing the companies that didn't handle their own risks well. 

Ethereum's "Merge" -- scheduled to occur in a little over two weeks -- continues to be a hot topic as well. Energy usage on Ethereum will fall by about 99% after the Merge, but it's not clear if transactions on the blockchain will be any faster or cheaper, which is really what will be needed to drive growth. Coinbase has a vested interest in Ethereum's success because it has a big staking business and has built an NFT platform on that blockchain. 

While Wednesday's volatility has been helpful to values, the market could turn downward tomorrow. That's why I'm holding tight to my assets and waiting for the long-term thesis of crypto growth and innovation to play out. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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New York Stock Exchange operator Intercontinental Exchange (NYSE: ICE) knows a few things about investing. The company has booked monster profits from two crypto investments and is now investing in another area of its business. This time, the company could change the game in the giant mortgage industry. Here's what happened.

What's next after crypto?

In December 2014, before anyone had ever heard of Bitcoin, Intercontinental Exchange invested $10 million for 1.4% ownership of a little-known crypto exchange called Coinbase Global (NASDAQ: COIN). The exchange was firmly entrenched in the crypto frenzy years later. Though it was almost unnoticeable at the time of its investment, it eventually sold its stake when Coinbase IPO'd in April 2021 for a mind-numbing sum of $1.24 billion.

Intercontinental Exchange's Coinbase investment foreshadowed another crypto-related investment. Bakkt (NYSE: BKKT) was initially launched in 2018 with majority backing from Intercontinental Exchange. The company was formed to provide digital wallets to institutional and consumer users to buy, sell, and spend digital assets. Of course, digital assets include crypto but also extend to airline miles, hotel loyalty points, and credit card points.

In late 2021, Bakkt merged with VPC Impact Acquisition, a special purpose acquisition company (SPAC) sponsored by Victory Park Capital, and the shares went public in October. In its annual report a few months later, Intercontinental Exchange booked an astonishing $1.4 billion gain from the transaction. Unlike its Coinbase investment, though, the exchange still holds its stake in Bakkt because it sees a future in digital currency, even if it doesn't include cryptocurrency.

More recently, however, the SPAC has made a more significant investment in the mortgage tech company Black Knight (NYSE: BKI). In May, Intercontinental Exchange announced it had agreed to acquire Black Knight for $85 per share, implying a market value of $13.1 billion. Prior to the acquisition, the exchange had a competing mortgage tech business.

Intercontinental Exchange's mortgage tech business provides software for loan officers, mortgage origination, closing, funding, and compliance. Black Knight's mortgage tech business overlaps in origination and expands the combined company's capabilities to multiple listing service (MLS) solutions and loan servicing. In addition, Black Knight is a leading data analytics provider in the real estate market.

Before the agreed tie-up, Black Knight made a significant mortgage tech investment of its own. In February 2022, the company completed a deal to acquire the remaining shares of Optimal Blue that it did not already own. Optimal Blue's mortgage tech business provides a software suite that aids its customers in carrying out secondary transactions in the mortgage market. Ironically, Black Knight funded part of the deal with 37 million shares of Dun & Bradstreet Holdings it owned from a previous investment.

Altogether, the complementary capabilities of the mortgage tech companies provide one of the first end-to-end software packages on the market. On top of that, the combined company will have a mountain of real estate and mortgage data it can use to bolster its data and analytics business.

Intercontinental Exchange points out that the average origination costs have ballooned from about $4,000 in 2009 to $9,000 in 2021. The company believes the new mortgage tech segment can shave off $2,600 -- nearly 30% -- of those costs. Savings at that level make hiring Intercontinental Exchange a very compelling proposition, especially considering the massive number of originations some banks and mortgage companies do.

Is Intercontinental Exchange a buy right now?

The Intercontinental Exchange/Black Knight mortgage tech portfolio is a compelling reason to get excited about the stock. The mortgage portfolio adds to the exchange's existing exchange segment consisting of 13 regulated stock and commodity exchanges, including the New York Stock Exchange and six clearing houses.

The Black Knight deal is not expected to close until the first half of 2023, but Intercontinental Exchange expects the accretive to its earnings per share in the first year after the deal closes. In addition, the deal should cut expenses by $200 million and provide $125 million in revenue synergies.

The company's stock is down about 19% this year because rising mortgage rates could potentially slow down the real estate market and crimp fees earned from mortgage originations.

If you're worried about the same things, consider that Intercontinental Exchange projects recurring revenue in its mortgage tech segment will increase from 50% of its revenue mix to 70% after the Black Knight acquisition. The stock's fall could represent an outstanding opportunity for long-term investors.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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What happened 

A strong bull run that's lasted all week came to a screeching halt on Thursday as crypto values fell and pulled Coinbase Global (NASDAQ: COIN) down with them. Some of the move was simply trading volatility, while some was because of very real concerns about the health of the market. 

Shares of Coinbase dropped as much as 6.6% today and were down 2.9% at 3 p.m. ET. Solana (CRYPTO: SOL) fell as much as 10.1% in the past 24 hours and is currently down 1.8%, while Cardano (CRYPTO: ADA) fell as much as 7.3% and is currently down 4.1%. 

So what 

The biggest news out of crypto was Blockchain.com announcing it will cut staff by 25%. The company said it will close an office in Argentina, cancel expansion plans in other countries, and cut back institutional lending.

It hasn't been widely reported, but Blockchain.com had lent $270 million to Three Arrows Capital, and when the company filed for bankruptcy, it exacerbated an already down market. 

Funds Blockchain.com raised earlier this year are expected to keep the company solvent for the foreseeable future, but there was a need to cut back expenses dramatically. With customers' funds being frozen at some exchanges, it wouldn't be surprising if the company also loses customers as a result. 

Another big story was an insider at Coinbase and two related people being charged with insider trading in relation to trades made ahead of tokens being listed on Coinbase. The U.S. Department of Justice made the announcement this morning, and Coinbase has been cooperating for months on the investigation. At the very least, this is a black eye for the company.

The broader crypto sell-off seems to be simply taking a breather from a relatively hot week of trading. Some cryptocurrencies are up over 50% in just a few weeks, and naturally there can be a pullback when that happens. 

Now what 

As fast as the crypto industry moves, we continue to see fallout from the Three Arrows Capital collapse, and Blockchain.com is the latest victim. This may ultimately be good news as companies eventually take fewer risks and focus on their core businesses. Coinbase said earlier this week that it wasn't impacted significantly by recent bankruptcy filings and hasn't taken any losses on loans. 

I would expect more volatility for tokens and crypto stocks, but the companies that survive are well positioned to generate tremendous value for shareholders. Coinbase is currently proving that a conservative business model with a long-term vision is better than taking risks no one in crypto fully understood. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Shares of cryptocurrency stock Coinbase Global (NASDAQ: COIN) have dropped over 85% from their peak in late 2021 as the crypto market has imploded. Trading is down, prices are down, and there's concern that margins will be under pressure all year.

As terrible as the operating conditions are today, Coinbase continues to build for the future. And if it can execute on plans to become more than just an exchange, this could be one of the biggest winners in the future of crypto and Web3.

The exchange problem

Coinbase has made its money by being a popular crypto exchange, particularly in the U.S. But there are other exchanges with lower fees, and there will naturally be pricing pressure for Coinbase to lower transaction costs for all users. Combine that with the decline in transaction volume overall and you have a recipe for declining revenue and margins in 2022. 

In the first quarter of 2022, retail trading volume plummeted from $177 billion to $74 billion sequentially. A vast majority of revenue is generated from retail traders, so this was the biggest reason for the decline in revenue and earnings.

There's no easy fix to the exchange problem. Margins will continue to be squeezed and retail traders may not be coming back anytime soon. So Coinbase needs to look elsewhere for revenue.

Business is where the money is

Coinbase may be known for being a popular exchange for traders, but the future of its business may be business services. Subscription and Services revenue jumped 169% in the first quarter of 2022 versus a year ago, while transaction revenue dropped 34%.

There are a number of opportunities like staking services, which take a 25% commission for helping users stake cryptocurrencies. Custodial fees were also $31.7 million, and I think that could grow as the company offers security products to users. Coinbase is looking to combine its app and wallet into an easier to use platform, which could make onboarding users easier.

COIN Revenue (Quarterly) data by YCharts.

Cloud services could be a big part of the company's future as well as developers look to build faster in Web3. There's no point in building wallet integrations, commerce tools, or trading capabilities when they're available through Coinbase Cloud. This could be a cloud giant for Web3 companies.

For example, Coinbase is one of the providers of Shopify's crypto payments platform, and the same tools are available to anyone. If you think commerce is going to be disrupted by "crypto rails" -- or cryptocurrency being the path the funds move from a customer to a merchant -- rather than credit or debit cards, Coinbase could be a huge player.

Crypto and NFTs will someday be invisible

If I had to sum up the case for Coinbase long term, it's that no company could make cryptocurrencies and NFTs invisible better than Coinbase. As someone told me at the world's largest non-fungible token conference NFT.NYC, "this should be a non-event for most people."

What does that mean? It means that users shouldn't have to worry about remembering security phrases that could compromise their accounts or wallet integrations or signing nefarious transactions in Web3. They should be able to feel comfortable using Web3 tools, and the technical details should fade into the background.

I think this is what we're seeing with Coinbase integrating more of its app and wallet products together, introducing an NFT marketplace, and having "Pay with Coinbase" available to merchants. When concert tickets move to the blockchain, it'll be a nonevent because the tickets will simply go to your Coinbase App. Or when a coffee shop sends you a loyalty NFT, it may sit in the background of your Coinbase App, invisible to you because it lives on the blockchain but can be hidden from sight.

Focus on the next billion users

Coinbase is building the tools to onboard the next billion people to crypto, NFTs, and Web3 more broadly. That's what the company is doing in this bear market, and if it succeeds, the company could come out of this stronger than ever. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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