Since yesterday afternoon, the price of Dogecoin (DOGE 5.26%) traded roughly 3% higher, as of 10:47 a.m. ET. While Dogecoin typically moves for no reason it all, the crypto sector is benefiting today as Bitcoin (BTC 2.71%), the world's largest cryptocurrency, continues to storm higher, surpassing $119,500, as of this writing.
A major Wall Street bank just gave a big nod to crypto
Bitcoin has been marching higher over the past week, likely due to the U.S. government shutdown. Bitcoin and the rest of crypto are alternative currencies, so when the mainstream financial system struggles, Bitcoin and other cryptocurrencies can benefit. In addition, Bitcoin is viewed as a bellwether for the entire crypto sector.
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Recently, Bitcoin and the entire sector got a big nod when JPMorgan Chase, the largest bank in the U.S. by assets, hiked its price target on Bitcoin to $165,000, implying significant upside from current levels. While some experts have much higher long-term price targets, having JPMorgan Chase, one of the most respected Wall Street banks with one of the strongest research divisions, become bullish on Bitcoin is a big moment for the industry.
Even better for Bitcoin, JPMorgan analysts are comparing Bitcoin to gold as a strong store of value with its 21 million finite tokens. JPMorgan says Bitcoin is undervalued compared to gold, but now has a volatility ratio to gold of less than 2.0.
Dogecoin likely to continue to track Bitcoin
While Bitcoin has broken away from the broader crypto sector to an extent, I still think the trajectory of most cryptocurrencies is tied to that of Bitcoin. I expect Dogecoin to be much more volatile, meaning it should see bigger gains than Bitcoin rises but also bigger losses when Bitcoin falls. I still have no interest in Dogecoin due to its lack of real-world utility.
