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What happened
Cryptocurrencies and related assets were doing a good job overcoming the Hump Day bump. By mid-afternoon on Wednesday, many of the major cryptos were trading higher; some were even up by double-digit percentages – take an arc, Dogecoin (CRYPTO: DOGE), with your increase of more than 10%.
As for the most famous cryptos, Bitcoin (CRYPTO: BTC) was over 6% higher that day, while Ethereum (CRYPTO: ETH) profited from a gain of 8.5%. On the side of related assets, Riot blockchain (NASDAQ: RIOT) and Digital bit (NASDAQ: BTBT), to name just two stocks, both rose about 13%.
Image source: Getty Images.
So what
No single factor seems to be responsible for this rally, which is wide and extensive. As with the stock markets, which plunged on Monday but have since climbed higher, investors appear to be benefiting from recent crypto price swings.
High-profile crypto bull Elon Musk could also have an influence. Wednesday afternoon at a cryptocurrency conference, the You’re here (NASDAQ: TSLA) The CEO admitted that he personally owns Bitcoin, Dogecoin, and Ethereum. Tesla and Musk’s space exploration firm, SpaceX, also owns Bitcoin.
In fact, alongside Tesla and SpaceX, Bitcoin is its largest holdings in the portfolio. He also revealed that “I am not selling any Bitcoin, nor SpaceX or Tesla”.
Now what
We should never blindly follow the portfolio movements of a famous investor. And we also have to keep in mind that cryptos as an asset class are very volatile and, especially in the case of more obscure altcoins, extremely speculative even at the best of times. Buyer, please beware.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.
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