Why Ethereum and Dogecoin are dropping today

A big hack, and some profit taking, are key factors investors are watching today.

| More on:
Disappointed man with his head on his hand looking at a falling share price his a laptop.

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

Today's price action in the overall cryptocurrency market is generally bearish. Ethereum (CRYPTO: ETH) and Dogecoin (CRYPTO: DOGE) have dropped 2.1% and 3.2%, respectively, over the past 24 hours as of 11 a.m. ET. These moves appear to be driven by the high-profile hack of Ethereum sidechain Ronin, a significant development in both the size and scale of this heist. Dogecoin is doing what it does best, providing a high-volatility vehicle for investors to trade short-term market movements. 

Convex Finance (CRYPTO: CVX) has seen a larger drop of 4.4% over the same time frame, driven by what appears to be profit taking, following a rather dramatic rise over the past couple weeks. Convex Finance has seen its CVX tokens approximately double since mid-March on bullish expectations around this network's ability to boost staking returns on Curve Finance pools, as well as new incentives for veCRV holders. 

So what

It's important to keep these recent 24-hour moves for these tokens in the context of some rather impressive upside moves over the past couple of weeks. Most investors would agree that some profit taking is healthy for these tokens to resume their long-term march higher. Accordingly, perhaps there's nothing to see here, at least for investors with a perspective that's longer than 24 hours.

That said, this significant hack of an Ethereum sidechain may cause investors some concern. Security issues remain a key talking point for crypto bears, who are likely emboldened by this news today.

Now what

It remains to be seen whether the crypto market will brush off this hack, as it has done with the previous $320 million hack of the Solana Wormhole bridge in February. 

However, investors looking at the crypto sector as a safe place to park funds for the long term are being reminded today of some of the (potentially expensive) growing pains that can impact investor portfolios in the near term. 

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

Chris MacDonald owns Ethereum and Solana. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Ethereum and Solana. The Motley Fool Australia owns and has recommended 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

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 »

US economy and sharemarket with piggy bank
Share Market News

Here's why Goldman Sachs sees a decade of lower returns ahead for US shares

Aussie investors have placed a lot of faith in US shares this year.

Read more »