Why Dogecoin Is Surging Today

Since Friday afternoon, the price of meme token Dogecoin (CRYPTO: DOGE) has traded 9.4% higher, as of 11:11 a.m. ET Monday. The crypto market started to recover from a rocky last week, driven by growing trade tensions between the U.S. and China and concerns over the macro environment.

Crypto can move with the broader market

While cryptocurrencies are viewed as alternatives to the mainstream financial system, they have now gotten more common and can be impacted by moves in the broader market, especially if they have to do with the macro environment. More tension between the U.S. and China, as well as concerns about bad bank loans last week, hit the sector hard.

Image source: Getty Images.

But conditions seemed to settle down over the weekend. President Donald Trump said on Friday that he does in fact plan to meet with Chinese President Xi Jinping in a few weeks in South Korea. Trump also seemed to retreat on imposing additional 100% tariffs on China.

This drove a nice rebound in Bitcoin, the world's largest cryptocurrency and a bellwether for industry, which the rest of the market seemed to follow. With some of these larger events not as much in focus, investors may be more encouraged by lower U.S. Treasury yields, which riskier assets like crypto tends to benefit from.

Investors seem jumpy right now

After a big run for the market and for many cryptocurrencies this year, investors seem a bit jumpy. Tariff news and the threat of an economic downturn last week had investors selling quickly. Dogecoin tends to move with the broader crypto sector, which it has continued to do last week and today. Ultimately, I am not interested in the token, due to its lack of real-world utility.

Bram Berkowitz has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.