Why Bitcoin, Ethereum, and Dogecoin Were All Up Today

What happened 

The value of some of the biggest cryptocurrencies in the world had a nice bounce on Wednesday. It helps that the stock market is up, led by growth stocks, which has helped push correlated cryptocurrency values higher as well. 

As of 2:15 p.m. ET today, Bitcoin (CRYPTO:BTC) was up 3% in the last 24 hours, Ethereum (CRYPTO:ETH) jumped 5.6%, and Dogecoin (CRYPTO:DOGE) was up 2.4%. This follows a slow but steady climb for valuations over the past week. 

So what 

The biggest news in the world of cryptocurrency is that federal officers arrested a couple accused of stealing $3.6 billion of Bitcoin from the exchange Bitfinex in 2016. A number of hacks over the last few years have resulted in hundreds of millions of dollars of cryptocurrencies being stolen. But it also shows that with the blockchain, it might only be a matter of time before criminals are caught.

Russia also seemed to drop the idea of banning cryptocurrencies, which was floated a few weeks ago. The country’s regulators and central bankers said they would treat cryptocurrencies as currencies, not securities, and only tax transactions over about $8,000. 

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Initial proposed rules would allow banks to act as intermediaries and help people report taxes. And miners would also not be banned, potentially allowing Russia to be a leader in crypto mining. 

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Countries are starting to jockey for position in the future of cryptocurrencies. Not only do they want miners to build, but they also want developers to create in their countries as well. While China has banned cryptocurrency, Russia has embraced it, and we may see the U.S. do the same, with regulators looking into the industry right now. 

Now what 

The news continues to be steadily bullish for cryptocurrency investors on the regulatory front. Rather than banning digital assets, countries are increasingly finding ways to regulate and tax cryptocurrency activities. 

A big shoe that hasn’t dropped is in the U.S., where we don’t know exactly how regulators are going to view digital assets in the long term. Given the billions of dollars in value and investment that’s going into the cryptocurrency economy, investors are likely anticipating relatively light regulation, even in the U.S. 

Let’s not forget that the short-term moves in cryptocurrencies are also driven by the stock market’s trajectory. Today, the stock market is up, and that’s a reason cryptocurrencies are up as well. This is what’s known as a risk-on trade as investors buy riskier assets. But with volatility comes risk, and the positive move could change course tomorrow, so keep an eye on long-term trends more than short-term price movements.