Sanctions are a good thing? Why Bitcoin, Ethereum, and Dogecoin are recovering nicely today

There's some interesting divergence taking place between cryptocurrencies and stocks today.

| More on:
Man sitting at a desk facing his computer screen and holding a coin representing discussion by the RBA Governor about cryptocurrency and digital tokens

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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

What happened

When investors check their watch lists for daily price action in the crypto world, Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and Dogecoin (CRYPTO: DOGE) are three of the top cryptocurrencies most often looked at for an idea of which direction the winds are blowing on a given day. As of noon ET today, these three top tokens have appreciated 2.6%, 4%, and 2.9%, respectively, over the past 24 hours. 

These strong moves higher are noteworthy for a few reasons. From a macro level, global macroeconomic uncertainty related to geopolitical tensions between Russia and Ukraine remains high. As of noon ET, all three major indexes traded lower on these concerns. However, the crypto market overall has risen dramatically, driven by outperformance from these three top tokens.

Bitcoin received a boost from investor recognition that sanctions may be more limited against Russia than previously thought. Additionally, it appears crypto is receiving a boost from news that Russia may be removed from the SWIFT payment network, a move that could boost crypto transaction volumes in the near term.

Bitcoin, Ethereum, and Dogecoin all also saw adoption pick up today. Sling TV announced that it would accept these three tokens, among others, for payment. News that a Dubai-based restaurant has opened with a Dogecoin theme also appears to have some investors excited. 

So what

The macro environment is starting to settle down, or at least investors appear to be better able to understand the risk-reward of crypto in the context of these concerns. Perhaps there's an argument that can be made that economic sanctions could boost the value of these digital payment networks. Sometimes, bad news can be good news. Today, crypto investors appear to be interpreting the geopolitical environment as such.

Continued adoption of crypto via various corporate entities continues to drive a bullish long-term trend for investors keen on holding Bitcoin, Ethereum, and other more speculative tokens such as Dogecoin right now. Should adoption continue to increase, perhaps these near-term market-related headwinds will be an afterthought in short order.

Now what

To be sure, cryptocurrencies are likely to remain volatile assets to hold through these trying times. For top tokens such as Bitcoin and Ethereum, often thought to be among the most defensive cryptocurrencies, this holds true. For Dogecoin, this volatility risk is obviously elevated further. Accordingly, these digital assets remain risk-on trades that many investors may want to be careful with.

That said, the market appears to have an interesting take on the geopolitical issues we're seeing right now. It's entirely possible that investors could refocus on the crypto sector as a way for Russia, or other governments, to counteract the centralization in the global payments system. Whether this turns out to be a turning point for the market, or merely a small blip on a longer-term downtrend, remains to be seen. However, today's price action is certainly intriguing to watch and warrants further investigation from investors. 

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

Chris MacDonald owns Ethereum. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin and Ethereum. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 

More on International Stock News

Man holding up betting slip and cheering along with two friends in front of TV
International Stock News

Elon Musk's big gamble: Will Tesla stock plunge if Kamala Harris wins the election?

The Tesla CEO has been an outspoken advocate for GOP presidential candidate Donald Trump. Will it backfire?

Read more »

Four investors stand in a line holding cash fanned in their hands with thoughtful looks on their faces.
Economy

Up 20% this year. Does the S&P 500 Index have more in the tank for 2024?

Will US stocks hold up after the election?

Read more »

two young boys dressed in business suits and wearing spectacles look at each other in rapture with wide open mouths and holding large fans of banknotes with other banknotes, coins and a piggybank on the table in front of them and a bag of cash at the side.
International Stock News

2 magnificent S&P 500 dividend stocks down 27% to 51% to buy and hold forever

These stocks hold potential to act as growth and income plays.

Read more »

A young female investor with brown curly hair and wearing a yellow top and glasses sits at her desk using her calculator to work out how much her ASX dividend shares will pay this year
International Stock News

One Wall Street analyst thinks this emerging Artificial Intelligence stock could rise 60% in the next year

SoundHound AI is on the doorstep of a big year.

Read more »

man looks up at apple on his head
International Stock News

Why did Warren Buffett sell more Apple shares?

Does Buffett know something we don't?

Read more »

A male party goer sits wearing a party hat and with a party blower in his mouth amid a bunch of balloons with a sad, serious look on his face as though the party is over or a celebration has fallen flat.
International Stock News

What snapped the S&P 500 winning streak last night?

The S&P 500 almost made October a winner, but fell at the final hurdle.

Read more »

Man going down a red arrow, symbolising a sliding share price.
International Stock News

Why Nvidia stock is sinking today

Investors were spooked by economic data and the ambitions of a deep-pocketed rival.

Read more »

Rede arrow on a stock market chart going down.
International Stock News

Why Microsoft stock is sinking today

Microsoft just beat quarterly earnings estimates. So why is the stock falling?

Read more »