What happened
A wild week of ups and downs continued on Friday in the cryptocurrency market but this time there were some positive moves, at least in stocks. Bitcoin (BTC -4.17%) was still down 3.5% in the last 24 hours as of 1:45 p.m. ET, but it’s now down just 0.6% over the past week. A crash early on Thursday seems to have subsided.
On the positive side, Coinbase Global (COIN 4.03%) shares jumped as much as 10.5% and are currently trading 4.4% higher for the day. Silvergate Capital (SI 3.21%), which is a crypto bank, climbed as much as 7.5% and is now up 2.4% on the day.
Image source: Getty Images.
So what
As we’ve seen all week, there hasn’t been any bombshell news in cryptocurrencies, but values have ground lower nonetheless. Today, there were some generally positive announcements.
Russia said that it is considering allowing cryptocurrencies to be used for international payments. Crypto advocates have fought for adoption in countries like Russia to give citizens more financial freedom, so this could be a step toward rising adoption.
JPMorgan Chase said it is using blockchain technology for some collateral settlements as well, adding to use cases for the blockchain and crypto.
U.S. Federal Reserve Vice Chair Lael Brainard also said that the central bank sees a digital dollar as a part of the financial system’s future. Governments in Europe and the U.S. have been fairly favorable to stable coins recently and this could be another sign that a government-backed stable coin is in our future.
Bitcoin Price data by YCharts
As you can see above, today’s rally is a small bounce from a rough month for crypto investors. But it may be a sign that we’re seeing a bottom.
Now what
Volatility continues to be standard for cryptocurrencies, but the last few weeks have been particularly bad. Taking a longer-term view, I think the news from the crypto industry has been fairly positive for its future use cases. Governments seem to be embracing crypto, and developers and investors continue to be active in the space.
What we’re seeing now is traders and short-term investors moving out of the market as values fall. But long-term builders are still here, and that will be the case no matter the price of cryptocurrencies. Coinbase and Silvergate Capital are two of the companies building this future, and that gives them tremendous upside potential.
Expect volatility to continue, but I’m getting more bullish on companies that have strong moats and revenue in the crypto and Web3 market. There’s tremendous upside for buy-and-hold investors who can live with the volatility in the booming crypto market.