Why Bitcoin, Ethereum, and Dogecoin Jumped Today

Bitcoin (Bitcoin 3.12%) Climbs again on Monday after Accurate strategy The massive buying spree continued. This time, the company announced another 1,070 bitcoins acquired over the past week and said it would raise another $2 billion to buy more.

Investors returned to higher-risk assets such as cryptocurrencies and growth stocks to start trading in 2025 and this has continued until today. As of 4pm EST, in the past 24 hours, Bitcoin is up 4%. Ethereum (Ethereum 1.26%) rose by a more modest 1.1%, and Dogecoin (Doug 3.05%) It rose by 1.4%.

Big buyer of Bitcoin

MicroStrategy implements what it refers to as a Bitcoin yield strategy, which involves issuing equity and debt in order to purchase Bitcoin. If MicroStrategy shares are worth more than the value of Bitcoin held on the balance sheet, the company can issue shares to purchase Bitcoin, increasing the amount of Bitcoin held per share. This is called the “yield”.

That’s why MicroStrategy has been a big buyer of Bitcoin in recent weeks. The stock price is more than twice the value of Bitcoin per share, which means the company can quickly increase its “yield.” In 2024, the company achieved a 74.3% return on Bitcoin, according to management.

What’s not clear is how long MicroStrategy stock will hold a premium over the underlying Bitcoin assets or what the downside risk is if MicroStrategy stops buying. With such a large buyer in the market, investors know there is always a buyer in MicroStrategy, but that momentum could reverse if the stock declines.

Ethereum and Dogecoin are riding the wave

There isn’t any huge news driving Ethereum or Dogecoin, but that’s not surprising given the cryptocurrency’s recent price action. The influx of money into the industry was the biggest driver of the rise in value.

What investors should watch over the next year is an improvement in the utility of these tokens, which will likely drive more value than the memes or non-fungible tokens (NFTs) that led the last cycle.

Leading crypto and cryptocurrency companies have already discussed plans to increase the benefit under the Trump administration, which takes office this month. If regulatory clarity is achieved, the industry could move from Wild West trading during the height of the COVID-19 pandemic to more fundamental innovations in blockchain technology, such as disrupting global financial and fiscal infrastructure. But a fast and cheap blockchain will be key. I’m not sure if Ethereum or Dogecoin fall into this category.

Will trading momentum fade in 2025?

Cryptocurrency trading has been associated more with growth stocks than as a hedge against inflation or economic activity, as it was sold before the pandemic. In this sense, the rise in the value of stocks has also led to a jump in cryptocurrency valuations.

But we’ve seen this story before and the euphoria of 2021 led to a crash in 2022. This could be a similar cycle for cryptocurrencies, and there is now more money involved and more leverage in the system from players like MicroStrategy.

I am looking at cryptocurrencies cautiously today and look to take profits on days like these more than buying the bounce at higher token values.