Insights

These 3 cryptos are feeling the Elon Musk effect today

Elon Musk’s power in the crypto community remains unparalleled.
The post These 3 cryptos are feeling the Elon Musk effect today appeared first on The Motley Fool Australia. –

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

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

What happened

Today has been a broadly positive day for investors, with a number of top cryptocurrencies catching a bid after a tough long weekend. Today, Dogecoin (CRYPTO: DOGE) is among the tokens investors are watching most closely, following some bullish comments from Tesla CEO Elon Musk around the dog-inspired meme token. As of 3:30 p.m. ET, Dogecoin has shot 15.3% higher, as Musk reiterated support for Dogecoin and its “hodlers.” 

As far as mega-cap tokens go, Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) have posted solid performances today (up 5.6% and 4.4% over the past 24 hours, respectively), buoyed by a marketwide sentiment shift. Certainly, some of this bullish sentiment can be tied to Elon Musk’s comments. However, more broadly, investors in higher-risk parts of the market are seeing fit to hit the bid today. Tech stocks and other “growthier” areas of the market are up dramatically today, alongside the crypto sector. 

So What 

Dogecoin’s fundamental underlying value is very difficult to put a price on. Accordingly, the volatility this token has seen over the past two years has been remarkable. Emboldened by Musk, the self-proclaimed “Dogefather,” investors have piled into this meme token with fervor, taking the token on a wild ride to an all-time high of more than $0.73 a little more than a year ago. Trading at around $0.06 per token after this recent rally, perhaps there’s a speculative argument that can be made with this token.

Investors in Dogecoin tend to read the tea leaves more than investors in other projects do. The speculative nature of this meme token can’t be ignored. Thus, when Musk speaks, investors pay attention.

On the other hand, Bitcoin and Ethereum are often viewed as proxies for investor sentiment across the entire crypto sector. During bull market rallies, these tokens have generally led the way, with investors gauging how the market is doing largely by assessing these two tokens’ performance. Thus, today’s rally in line with the broader crypto market makes sense.

However, a high correlation to riskier equities is also a phenomenon that’s catching the attention of investors. While Bitcoin (and Ethereum to some extent) were previously viewed as stores of value, more investors are now taking the view that these tokens are much more sensitive to macro forces, such as monetary policy, than previously thought.

Now what

Today’s face-ripping rally across the equity and crypto markets is a welcome reprieve for many growth investors. This year has not been kind to the aggressive investor, to say the least. However, there have been a few bear market bounces that have surprised investors thus far. The question is whether this recent bounce can be sustained, or if further downside is on the horizon. 

For today, at least, investors have found some positive momentum to jump on. Given the nature of the crypto market, perhaps this momentum can turn into meaningful near-term rewards for investors. That said, as always, the risk profile with this asset class is higher than others. Accordingly, it’s important for investors to practice prudent risk management with any such positions, especially in this market. 

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

The post These 3 cryptos are feeling the Elon Musk effect today appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of January 12th 2022

More reading

What to expect from the Bitcoin price following last week’s thrashing Is Solana the next Bitcoin? Can Ethereum reach $5,000? The key driver behind the recovery in Bitcoin, Ethereum, and Solana today Ethereum price collapses 35% in a week. Are crypto sharks to blame?

Chris MacDonald has positions in Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin, Ethereum, and Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Free Share Allocation Reward Levels

STARTER

Class
$ 2,500 Deposit & Trade
  • REWARD^
  • 1 x Marathon Oil Corporation (NYSE:MRO)

ECONOMY

Basic
$ 5,000 Deposit & Trade
  • REWARD^
  • 1 x Pfizer Inc (NASDAQ:PFE)

ECONOMY

Standard
$ 10,000 Deposit & Trade
  • REWARD^
  • 1 x Amazon.com Inc (NASDAQ:AMZN)

ECONOMY

Plus
$ 25,000 Deposit & Trade
  • REWARD^
  • 2 x Apple Inc (NASDAQ:AAPL)
POPULAR

BUSINESS

Class
$ 50,000 Deposit & Trade
  • REWARD^
  • 4 x Apple Inc (NASDAQ:AAPL)

FIRST

Class
$ 150,000 Deposit & Trade
  • REWARD CHOICES^
  • 12 x Apple Inc (NASDAQ:AAPL)
  • 2 x Tesla (NASDAQ:TSLA)
^Please refer to the Free Share Promotion Terms and Conditions for details.

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex Securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here To Get Started
FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here For More Info