Why Bitcoin, Ethereum, and Dogecoin Rose This Morning
It’s Wednesday morning, and cryptocurrencies are on a tear.
As negative news out of Washington, D.C., wars with positive news that Robinhood is rolling out a new feature promising to protect investors from volatility, here’s how crypto prices look as of 10:20 a.m. EDT:
Good news first: Bloomberg reported yesterday that soon-to-be-IPO Robinhood is developing a new feature that promises to “better protect [its users] against volatility in cryptocurrency trading.” Dubbed “price volatility protection,” this feature promises to “skip … recurring orders or buy less than your chosen amount” in the event of dramatic price fluctuations.
Although details are scarce at this point, the idea behind the feature appears to be that a customer might elect, when Bitcoin or other cryptocurrency prices are falling dramatically, to skip purchases and so avoid trying to grab a falling knife. Conversely, when prices are surging, the feature might protect a customer from buying more than they intended to.
Utilizing such a feature might cause a Robinhood customer to forego cheap prices in the event of a sell-off — or miss out on a rally when prices are surging. Still, it’s possible that the peace of mind of knowing one won’t accidentally put too much money at risk either way will prove attractive, and remove an obstacle to investors investing in cryptocurrency.
Now, at the same time as this good news is coming out, there’s also more (potential) bad news from Washington. As CoinDesk reports, in a letter to U.S. Treasury Secretary Janet Yellen dated Monday, Sen. Elizabeth Warren inveighed against “the growing risks that cryptocurrencies pose to the financial system,” and said she’s “increasingly concerned” about the lack of “sufficient regulation” of the crypto market.
Calling the $2 trillion cryptocurrency market a systemic risk to the U.S. economy, Warren warned that volatile crypto prices pose “unique threats” to the economy, and that “material distress in the cryptocurrency market could spread throughout the financial sector.”
So far today, buyers of Bitcoin, Ethereum, and Dogecoin don’t seem to share the senator’s concerns. But if a government clampdown on crypto trading is coming… maybe they should.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.