Why cryptocurrencies surged again on Friday

[ad_1]

What happened

Cryptocurrencies had another crazy day today, this time soaring to mid-digit to end the week. At 3 p.m. EDT, Bitcoin (CRYPTO: BTC) is up 2.8% in the last 24 hours, Ethereum (CRYPTO: ETH) is up 4%, and Dogecoin (CRYPTO: DOGE) has jumped 5, 6%.

It has been a crazy week of cryptocurrency trading, and over the past seven days Bitcoin is up 3.4%, Ethereum is up 1.5%, and Dogecoin is actually down 9. 8%. The volatility has left investors very close to where they were a week ago and very little has fundamentally changed when it comes to crypto investing.

Image source: Getty Images.

So what

There was some significant news for crypto investors today. Cuba has announced that it will recognize and regulate cryptocurrencies as a method of payment on the island. The United States has sanctioned Cuba, restricting the use and transfer of U.S. currency within the country, so citizens and government alike see crypto as a potential way around these rules.

Venture capitalist Bill Gurley also told Bloomberg that he personally invested in Ethereum. He thinks the transaction costs will be lower and he thinks the developers are “clearly in Ethereum’s camp.” As an industry legend, Gurley’s opinions can be seen as a seal of approval for crypto investors.

In contrast, crypto account hacks are gaining more attention this week. CNBC highlighted hacks in Coinbase accounts earlier this week and yesterday the BBC wrote about hack victims around the world. Cryptocurrency may be gaining validation from elites in Silicon Valley and countries with unstable currencies, but if it is to be a haven for hackers, crypto will not gain the widespread adoption that people hope.

Now what

There was a lot going on with crypto this week and investors didn’t seem to know if any of the news was particularly bearish or bullish. On the bullish side, it looks like countries and financial institutions are taking cryptocurrency more seriously. Cuba and El Salvador are leading the way, although I would view their endorsements more as a sign of instability in their countries than as a core belief in cryptocurrency. Earlier this week, PayPal launched its crypto service in the UK, another sign that major financial institutions believe in crypto.

The downside is that hackers are stealing hundreds of millions of dollars in cryptocurrency this month alone, and that’s exactly what’s being reported by the media. If the hacks continue to take place, it will disrupt confidence in cryptocurrencies and slow the flow of money into the industry. This is the case with the bear, and I think it got a lot of attention this week.

By the weekend, volatility was once again the story of cryptocurrencies. This may just be the norm for now and it is the price to pay for being a crypto investor.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a premium Motley Fool consulting service. Were motley! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

[ad_2]