Why Bitcoin, Ethereum, Dogecoin, and Shiba Inu dropped today

The crypto market is struggling to start the week.

| More on:
bitcoin represented by gold coin with letter b sitting atop circuit board

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened 

Cryptocurrency investors woke up to a down market on Monday, which just happens to also be tax day in the U.S. In a volatile market like crypto, it seems like every day is either up or down big and today the sellers are winning. 

Bitcoin (CRYPTO: BTC) had fallen as much as 4.1% as of noon ET, while Ethereum (CRYPTO: ETH) dropped up to 5.8%, Dogecoin (CRYPTO: DOGE) fell 6.9%, and Shiba Inu (CRYPTO: SHIB) fell up to 8%. The selling was widespread so there's no reason to be especially worried about any particular cryptocurrency. 

So what 

It's hard to ignore that today is tax day in the U.S. Crypto traders may be selling in order to pay taxes due, which can be surprising if this is your first time paying taxes on large trading gains. 

Over the weekend there was also news of a $182 million hack of the Beanstalk protocol, a stablecoin credit protocol built on Ethereum. This continues a series of hacks of cryptocurrencies across the industry, which undermines investor confidence in the ecosystem. This is an industry wide problem and it doesn't seem that there's a great solution right now.

The stock market overall is down today as well and that has generally meant that more volatile cryptocurrencies will magnify those losses. 

Now what 

Volatility is the name of the game in cryptocurrency and that doesn't seem to be changing anytime soon. Search the internet and you can find analysts and investors who are afraid of inflation, or regulation, or hacking, while others are bullish for reasons that range from innovation to crypto being an inflation hedge. 

For today, I don't see anything to be worried about in any of these cryptocurrencies. Given the trends of the industry, I think Ethereum is the best bet given the real utility that can be built in the ecosystem and the projects being built there already. Bitcoin, Dogecoin, and Shiba Inu simply can't claim the same kind of digital ecosystem. 

If today's selling is indeed due to tax season or the down stock market this could be a good buying opportunity for investors. Nothing has fundamentally changed about crypto today and we're seeing the industry build more and more applications every day. We are also likely to get some regulatory updates in the U.S. and Europe this year, which could be a boost to the industry's development long-term. 

When I see moves like this today I tend to brush them off because nothing about cryptocurrencies is fundamentally different than a day ago. It's just that current portfolios are a little lower for the time being. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Travis Hoium owns Ethereum. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin and Ethereum. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 

More on International Stock News

Happy woman on her phone while her electric vehicle charges.
International Stock News

Is Tesla the best EV stock for you?

Tesla stands out as the premier EV maker, but it might not be right for every investor.

Read more »

A woman sits on sofa pondering a question.
International Stock News

After Nvidia's 10-for-1 stock split, is it still a buy?

Nvidia shares saw a bump after their recent split.

Read more »

Investor looking at falling ASX share price on computer screen
International Stock News

Nvidia stock drops 6.5%, dragging artificial intelligence stocks lower

Is the AI bubble bursting?

Read more »

A cool young man walking in a laneway holding a takeaway coffee in one hand and his phone in the other reacts with surprise as he reads the latest news on his mobile phone
International Stock News

Thinking about buying Nvidia stock? Here's why you might already own it

You might not have missed out on Nvidia's gains after all.

Read more »

Man smiling at a laptop because of a rising share price.
International Stock News

Nvidia investors just got some bullish news

The GPU leader has opportunities for robust growth beyond the artificial intelligence market.

Read more »

A beautiful ocean vista is shown with a woman whose back is to the camera holding her arms up in triumph as she stands at the top of a rock feeling thrilled that ASX 200 shares are reaching multi-year high prices today
International Stock News

Is Nvidia stock going to $200 in the wake of its 10-for-1 stock split?

Wall Street analysts are boosting their price targets in the wake of Nvidia's high-profile stock split.

Read more »

A boy with a gold crown stands stoically looking straight ahead.
International Stock News

Can anyone topple Nvidia as the king of artificial intelligence investments?

There are many comparisons, but nearly all fall short.

Read more »

A woman stands triumphant with arms outstretched as she overlooks a city at sunset.
International Stock News

Nvidia shares reach world's most valuable milestone. Where to now?

Nvidia beats out Apple and Microsoft to be number one in the world.

Read more »