The move upward mirrors the stock market rally.
Cryptocurrencies and related assets were doing a fine job getting over the hump of Hump Day. As of mid-afternoon Wednesday, many of the leading cryptos were trading higher; some were even up by double-digit percentages — take a bow, Dogecoin (CRYPTO:DOGE), with your 10%-plus rise.
As for the better-reputed cryptos, Bitcoin (CRYPTO:BTC) was more than 6% higher on the day, while Ethereum (CRYPTO:ETH) enjoyed an 8.5% gain. On the related assets side, Riot Blockchain (NASDAQ:RIOT) and Bit Digital (NASDAQ:BTBT), to name two stocks, were both up by around 13%.
No single factor appears to be responsible for this rally, which is broad and extensive. As with the equity markets, which dived on Monday but have since marched higher, investors seem to be taking advantage of recent crypto price swoons.
High-profile crypto bull Elon Musk might also be an influence. Wednesday afternoon in a cryptocurrency conference, the Tesla (NASDAQ:TSLA) CEO admitted that he personally owns Bitcoin, Dogecoin, and Ethereum. Tesla and Musk’s space exploration venture SpaceX also hold Bitcoin.
In fact, next to Tesla and SpaceX, Bitcoin is his largest portfolio holding. He also revealed that “I am not selling any Bitcoin, nor SpaceX or Tesla.”
We should never blindly follow along with the portfolio moves of a famous investor. And we should also bear firmly in mind that cryptos as an asset class are highly volatile and, especially in the case of the more obscure altcoins, extremely speculative at even the best of times. Buyer, please beware.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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