May 26, 2024

This week, meme stocks came back into the limelight after Roaring Kitty, the investor behind the GameStop saga in 2021, made a comeback on social media and sparked a renewed frenzy, lifting other meme stocks.

However, the price of Bitcoin and memecoins, such as Dogecoin and Shiba Inu, did not rise significantly. On Wednesday afternoon, Dogecoin and Shiba Inu both were up 2.5% and 1.5%, respectively, while the top cryptocurrency Bitcoin was up over 5%.

During GameStop’s hike on Monday, Doge and Shiba jumped nearly 6% and 5%, respectively, but this is not extraordinary given how memecoins have rallied in the past after the meteoric rise of meme stocks.  

The GameStop saga contributed greatly to Doge’s success in 2021. Dogecoin caught the attention of investors who were looking for a cryptocurrency equivalent to meme stock GameStop. Just as GameStop reached its peak, Dogecoin started to gain traction, peaking in May 2021 at $0.74 per coin.

But this time, nothing like that happened.

When meme stocks returned to action earlier this week, memecoins like Floki and Popcat experienced double-digit gains, but they don’t have the same market share and popularity as Doge and Shiba. To everyone’s surprise, Dogecoin and Shiba Inu remained unfazed by the meme stock craze as if they had no relationship to it.

That’s because crypto has evolved and become more macro, said Pat Doyle, a blockchain researcher at Amberdata, in an email.

The recent meme stock rally wasn’t expected to last long the way it did in 2021, as mentioned by some experts. Doyle echoed the same sentiment by saying that 2021 had many catalysts, including covid, remote work, online time being increased, and stimulus checks being issued, among others, and none of them are happening in 2024.

However, this doesn’t mean that these trends don’t affect crypto at all, as different pockets of crypto will react differently to equity market movements, he clarified.

“One memecoin called GME (no relation to the stock) saw insane returns after Roaring Kitty returned to Twitter. However, the rest of the crypto assets in DeFi segments remained stable,” he wrote.

“While the crypto space has grown and seen more adoption and maturity, the cost of deploying a memecoin is relatively low, which is why we are seeing such growth in this segment.”

Cryptocurrency has become more mainstream this year as the Securities and Exchange Commission allowed the spot Bitcoin ETFs in January. This resulted in financial giants such as BlackRock and Fidelity jumping into the blockchain and crypto world and sending crypto to new heights.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *