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Why Bitcoin, Ethereum, and Dogecoin Are All Climbing Today

What happened

Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) are both up more than 5.5% as of 12:30 p.m. EDT. Dogecoin (CRYPTO: DOGE) is also up a more modest 3% so far today. The rise is a follow through from Monday when well-known stock picker Cathie Wood had positive comments about the two primary digital currencies.

So what

The founder and CEO of investment management firm ARK Invest told attendees at the SALT conference -- an event focused on technology, finance, and geopolitics -- that she expects Bitcoin to rise tenfold over the next five years to $500,000. She also shared that her confidence in ether had grown.

Image source: Getty Images.

The comments come on the heels of El Salvador becoming the first country in the world to make Bitcoin legal tender. Other countries are reported to be on deck.

Now what

Wood's statement was definitely a headline grabber. It's the type of statement that has driven short-term moves in the cryptocurrency space over the past year. However, her prediction came with a condition.

She said the price target rests on the assumption that companies will diversify their balance sheets by purchasing Bitcoin as well as institutional investors allocating 5% of their funds to the cryptocurrency.

As of now, only a few public companies that aren't directly tied to trading or mining Bitcoin own a meaningful amount. And they are controlled by somewhat eccentric billionaires. On the other hand, institutional investors have been buying digital currencies hand over fist. One survey showed 82% expect the purchases to increase in the future. That group is led by BlackRock -- a firm with $9.5 trillion under management.

It's hard to say how it will all play out. But there is clearly momentum again in the world of cryptocurrency after a summer that saw prices drop precipitously.

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Jason Hawthorne has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.


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