Cryptocurrencies had another wild day today, this time climbing mid-single digits to end the week. At 3 p.m. EDT, Bitcoin (CRYPTO:BTC) is up 2.8% over the last 24 hours, Ethereum (CRYPTO:ETH) is up 4%, and Dogecoin (CRYPTO:DOGE) has jumped 5.6%.
It has been a wild week of trading for cryptocurrencies, and over the last seven days Bitcoin is up 3.4%, Ethereum is up 1.5%, and Dogecoin is actually down 9.8%. Volatility has left investors very near where they were a week ago and very little has fundamentally changed about crypto investments.
There was some meaningful news for crypto investors today. Cuba announced that it will recognize and regulate cryptocurrencies as a form of payment on the island. The U.S. has sanctioned Cuba, limiting the use and transfer of U.S. currency in the country, so citizens and the government see crypto as a potential way around those rules.
Venture capitalist Bill Gurley also told Bloomberg that he has personally invested in Ethereum. He believes it will have lower transaction costs and he thinks developers are “clearly in the Ethereum camp.” As a legend in the industry, Gurley’s views can be seen as a stamp of approval for crypto investors.
On the downside, hacks of crypto accounts are getting more attention this week. CNBC highlighted hacks in Coinbase’s accounts earlier this week and yesterday the BBC wrote an article about hacking victims around the world. Cryptocurrency may be gaining validation from Silicon Valley elites and countries with unstable currencies, but if it’s going to be a haven for hackers, crypto won’t gain the widespread adoption people hope for.
There was a lot going on with crypto this week and investors didn’t seem to know whether any of the news was particularly bearish or bullish. On the bull side, it appears that countries and financial institutions are taking cryptocurrency more seriously. Cuba and El Salvador are leading the way, although I would take their endorsements more as a sign of instability in their countries rather than a fundamental belief in cryptocurrency. Earlier this week, PayPal launched its crypto service in the U.K., another sign that big financial institutions are believing in crypto.
The downside is hackers stealing hundreds of millions of dollars worth of crypto this month alone, and that’s just what’s being reported by the media. If hacks continue to take place it’ll disrupt confidence in cryptocurrencies and slow the flow of money into the industry. That’s the bear case, and I think it got some significant attention this week.
At the end of the week, volatility was once again the story for cryptocurrencies. That may simply be the norm for now and it’s the price to pay for being a crypto investor.
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