Why Bitcoin, Ethereum, and Dogecoin Popped -- Then Dropped
- And for the first time ever, JPMorgan clients can start buying Ethereum, Bitcoin, and Dogecoin.
- More banks may follow JPMorgan's lead.
It's finally Friday, and while this morning it looked like cryptocurrencies would end the week on a high note, things got ugly in a hurry.
Buoyed by good news out of investment bank JPMorgan Chase, the price of Bitcoin (CRYPTO:BTC) bounced nearly 2% out of the gate, Ethereum (CRYPTO:ETH) ran past 3%, and Dogecoin (CRYPTO:DOGE) briefly passed a 4% gain. But things took a sudden turn for the worse around about 10:30 a.m. EDT, and have deteriorated as the day dragged on.
Here's where prices on the three best-known cryptocurrencies stand at 12:45 p.m. EDT, according to the price-trackers at CoinDesk:
- Ethereum (CRYPTO:ETH) -- Elon Musk's new favorite cryptocurrency -- gave up all its gains and now shows a 0.1% loss.
- Bitcoin (CRYPTO:BTC), too, has retraced to a 0.6% loss.
- Dogecoin (CRYPTO:DOGE) is doing worst of all -- down 3.6%.
So what's happening in the world of cryptocurrency right now? Early in the day, investors seemed to react to investment bank JPMorgan's announcement -- reported today by Forbes magazine -- that all of its wealth management clients will henceforth be permitted to invest in Bitcoin (and other cryptocurrencies, too) via the bank.
As Forbes explains, JPMorgan will be the first major U.S. bank to permit its clients to do so, potentially blazing the trail for other banks to follow suit. In the meantime, just the fact that JPMorgan alone is giving its blessing to cryptocurrency investing opens the floodgates to a perhaps significant portion of the $630 billion in money that JPMorgan manages, which can now be invested in cryptocurrency. Furthermore, the new policy permits all JPMorgan clients to invest in cryptocurrency through the bank -- even its self-directed clients.
Forbes does note that JPMorgan will not permit its advisors to recommend cryptocurrency products to clients -- "the clients must ask to make crypto trades," says the magazine.
Does that single caveat, though, explain why the cryptocurrency buyers who came out in force this morning have suddenly turned into cryptocurrency sellers in the afternoon? I can't imagine why.
To the contrary, JPMorgan's announcement seems to me to suggest that cryptocurrency is gaining broader market acceptance as something that reasonable people might reasonably want to invest in. And the fact that this announcement comes from the bank headed by Jamie Dimon -- who in May famously declared, "My personal advice is to stay away from crypto" -- just emphasizes the point.
I really have to wonder if the people who are selling cryptocurrencies today might be better off buying it instead.