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Why Bitcoin, Ethereum and Dogecoin Surge Today
The cryptocurrency space is getting a nice boost today from yesterday’s comments from Federal Reserve Chairman Jerome Powell. The market got a jolt from Powell’s comments in a press release; he suggested that the direction of the Fed’s next move will most likely be lower. The market had previously priced in some possibility of an interest rate hike, which seems to be off the table, at least for now.
With a likely looser monetary policy environment ahead, risk assets along the curve have seen a big push in the last 24 hours. Obviously, the further investors move along the risk curve, the more prolonged this move can be. For major cryptocurrencies Bitcoin (CRYPTO: BTC), Ethereal (CRYPTO: ETH), and Dogecoin (CRYPTO: DOGE), is up 3.8%, 2.2%, and 4% over the 24 hours, respectively, as of 4:00 PM ET on Thursday.
Additionally, there are some token-specific factors at play with these three tokens that investors seem to be pricing in today. Let’s dive into what’s moving these closely watched digital assets.
The rally continues
Since hitting a new all-time high right around the time of its latest halving, Bitcoin’s rally has faltered. Expectations for a potential continuation of this slide had taken hold due to economic factors that could impact the world’s largest cryptocurrency.
But with interest rate hikes seemingly out of the question, analysts have become increasingly bullish on Bitcoin in the short to medium term. Lower interest rates should push the U.S. dollar lower, inflating the price of various commodities and assets that serve as stores of value. For those who believe in this thesis for Bitcoin, this is a great thing. In fact, yesterday’s press conference probably had the biggest impact on Bitcoin for this very reason.
Ethereum’s status as a commodity or store of value is also debatable. As the second largest in terms of market cap in this space, Ethereum should benefit from a similar trend of capital flowing into cryptocurrencies that Bitcoin investors have benefited from. This is because the market still expects the Securities and Exchange Commission to approve Ethereum spot ETFs at some point (though some suggest it’s possible the SEC could still consider the asset a security), which should improve the supply and demand dynamics around the token. As Ethereum has transitioned to a proof-of-stake protocol and implemented some deflationary measures for its token, there’s a strong bull case building in the market that the same drivers that drove Bitcoin to record highs could be in play for Ethereum this year.
The story continues
Dogecoin remains among the most speculative cryptocurrencies out there, meaning it is a prime choice for traders and investors looking to play short-term price swings in the market. It is no surprise that Dogecoin has seen a more pronounced move than its larger peers, for this reason alone. However, the large liquidation data tied to a previous decline in these three tokens in recent days could also play a role in today’s rally. Investors appear to have been looking for any reason to risk-load and put capital to work on this decline. This recent macro catalyst appears to have provided the necessary boost.
Is this recovery set to continue?
Today’s move needs to be put into context. Bitcoin fell to a low of around $58,000 per token yesterday, and while it is moving towards the $60,000 mark at the time of writing, it is still far from its all-time high of around $73,000 hit earlier this year. So, there is certainly both upside and downside potential in the short term, as this token has gapped up rather rapidly in a short period of time.
Other cryptocurrencies like Ethereum and Dogecoin tend to follow Bitcoin’s lead, so I would say this is the token that most investors should be focused on right now. I am of the opinion that if several bullish catalysts materialize in the coming days, it is entirely possible that Bitcoin could make another run to a new high, and that Ethereum and Dogecoin could follow suit. It is just a question of whether this specific macro catalyst can be amplified by some additional news. There is not much on my radar at this time, so I will sit out this recent pop.
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Chris MacDonald has positions in Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.
Why Bitcoin, Ethereum and Dogecoin Surge Today was originally published by The Motley Fool