What happened
Investors are pouring back into stocks and cryptocurrencies on Tuesday after Russia said it was pulling troops back from the Ukraine boarder and resuming talks with European leaders. The S&P 500 has risen 1.4% on that news, and the tech heavy Nasdaq Composite is up 2.2%.
On the cryptocurrency side of the market, Polkadot (CRYPTO:DOT) rose as much as 8.2% in the last 24 hours as of 2:30 p.m. ET and is currently up 7.3% over that time. Chainlink (CRYPTO:LINK) has jumped 9.3% and is currently up 8.8% over the last day. The Sandbox (CRYPTO:SAND) was up 8.7% at one point and is now up 7.7%.
Image source: Getty Images.
So what
There were a couple of interesting news items that have helped crypto values today, especially those tied to the metaverse. One is that JPMorgan (NYSE:JPM) opened a lounge in Decentraland, a virtual world built on the blockchain. The Onyx lounge, as it’s known, is the latest corporate location in the metaverse and is intended to show customers the possibilities for Web 3 and blockchain applications in the future.
Coinbase (NASDAQ:COIN) also announced a cash-out service in Mexico, which allows users to convert crypto into fiat currency, saving on fees. This is meant to address high fees users pay for remittances, or funds immigrants and expatriates send home to Mexico. The World Bank estimated that $700 billion was sent from the U.S. to Mexico in 2020, so this is a massive market. Coinbase expects to expand this service to more countries.
Given the widespread gains in cryptocurrencies today, the reality is that this is a rising market lifting all values more than the effects of one specific news item. But the news from JPMorgan and Coinbase helps push cryptocurrency further into the mainstream.
Now what
I wouldn’t read into today’s move too much because it was driven by a rising market and investors moving back into riskier assets. What’s more meaningful is the fact that some of these cryptocurrency projects are finding meaningful ways to impact the real world. Coinbase was actually started to make international transactions faster and easier, while JPMorgan is clearly one of the biggest financial institutions in the world. They wouldn’t be making these moves if they didn’t think cryptocurrency is a big part of the future.
The biggest risk for cryptocurrency long term is heavy regulation or the lack of adoption by large investors and institutions. But we’re clearly seeing that institutions are betting on the blockchain in a big way, and that’s helping cryptocurrencies like Polkadot, The Sandbox, and Chainlink today.
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