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Why Bitcoin and Ethereum Popped, but Dogecoin Dropped

By Rich Smith - Jul 22, 2021 at 1:12PM

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Elon Musk is in effect today.

What happened

Has Dogecoin (DOGE 12.52%) ever had a better friend that Elon Musk? Well, not today. For months, the Tesla (TSLA 4.67%) boss has off-and-on hyped or denigrated the one-time joke cryptocurrency, helping to drive the former sub-$0.01 coin's value past $0.72.

But today, Musk's distraction from Dogecoin may be the reason the price is diving -- and also the reason that Bitcoin (BTC -0.09%) and Ethereum (ETH -0.72%) are both moving higher.  

To recap, here's how the values stand as of 1:30 p.m. EDT:

  • Bitcoin is up 1.2%
  • Ethereum is up 3%
  • Dogecoin is down 3.5%.
Red arrow swoops up and blue arrow swoops down.

Image source: Getty Images.

So what

So why are Bitcoin and Ethereum outperforming Dogecoin today? Two reasons (and Musk is a part of both).

In the case of Bitcoin, Musk commented today that although he still needs to do "a little bit more due diligence to confirm" this, as soon as he sees that renewable energy is being used for at least 50% of Bitcoin mining, Tesla will "most likely" resume accepting Bitcoin as payment for Tesla electric cars.  

Meanwhile on the subject of Ethereum, Musk confirmed that he personally owns some of that cryptocurrency as well as Bitcoin -- an offhand comment that nonetheless, at one point today, sent Ethereum prices up as much as 12%!  

Now what

Here's the thing: At the same "B Word Conference" at which Musk made the comments that are lifting Bitcoin and Ethereum prices today, Musk also confirmed that he owns Dogecoin as well. I suspect that most investors already assumed that, however, given the cryptocurrency's frequent appearance on Musk's Twitter feed.  

In contrast, the revelation about his owning Ethereum, and the confirmation that Bitcoin could soon become legal tender for Tesla-shopping as well, were both "new" news -- and they're moving the cryptocurrency market accordingly.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Bitcoin and Tesla. The Motley Fool recommends Ethereum. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Dogecoin Stock Quote
Dogecoin
DOGE
$0.08 (12.52%) $0.01
Tesla, Inc. Stock Quote
Tesla, Inc.
TSLA
$900.09 (4.67%) $40.20
Bitcoin Stock Quote
Bitcoin
BTC
$24,477.68 (-0.09%) $-21.03
Ethereum Stock Quote
Ethereum
ETH
$1,974.45 (-0.72%) $-14.41

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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