What happened
Many of the most watched cryptocurrencies are seeing an interest spike today as investors continue to digest macro data and adjust their portfolios according to the aggregate risk profile the market is comfortable with. Main tabs Bitcoin (CRYPT: BTC) Y Ethereal (CRYPT: ETH) appreciated 1.8% and 3.5%, respectively, in the last 24 hours at 11 am ET.
These moves generally lined up with the broader crypto market, which was up 3% during this same time frame. These movements also correlated with the price action that we have seen in the last few days, showing Bitcoin as a lower beta game relative to the general market on bull days and also on bear days.
For meme token dogecoin (CRYPT: DOGE), an increase in traders' risk appetite has boosted this token 4.8% more in the last 24 hours. Additional support for Dogecoin from talking heads like Mark Cuban, and a greater acceptance of Dogecoin as a means of payment by various corporations, has continued to spark interest in this meme token over the past day.
Image source: Getty Images.
And that
Today marks the first day in a long time that we see cryptocurrencies really differ from risky assets in the stock market in terms of performance. The directional movements of these top tokens don't line up with most of the high-growth stocks today, which were down late in the morning. Consequently, perhaps the crypto bulls claiming that digital tokens could be seen as a hedge of the market have a leg to lean on.
Investors appear to be focusing once again on the risk-reward ratio of cryptocurrencies relative to stocks today. As investors continue to diversify their portfolios, allocations towards digital currencies appear to hold steady. Currently, the entire crypto market continues to hover around the $ 2 trillion mark, with these three tokens collectively representing more than half of the overall market.
Now what
Bitcoin and Ethereum remain the top two tokens that most crypto investors watch closely. The daily price action of these tokens drives much of the sentiment in the broader crypto markets. That said, the outsized moves that some smaller tokens like Dogecoin are making today provide an interesting bullish thesis for those looking to take additional risk.
Given this macro environment, adding more risk to one's portfolio seems like a risky game. However, the divergence we are seeing once again between crypto assets relative to equities adds to the intrigue of this sector for investors. As always, investors looking to put some money to work in CRYPTOCURRENCY they should be aware of the risks and should practice proper portfolio discipline to size positions appropriately and ensure risk management protocols are in place.
This article represents the opinion of the author, who may not agree with the "official" recommendation position of a premium Motley Fool counseling service. We are variegated! Questioning an investment thesis, even your own, helps all of us think critically about investing and make decisions that help us be smarter, happier, and wealthier.
