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Meme Stocks and Crypto in the Spotlight
This past week, meme stocks made a resurgence in the spotlight when Roaring Kitty, the key figure behind the GameStop phenomenon in 2021, reemerged on social media. His return sparked a renewed frenzy around meme stocks, consequently boosting other meme stocks in the market. However, the surge in meme stock activity did not have a significant impact on the prices of cryptocurrencies like Bitcoin and popular memecoins such as Dogecoin and Shiba Inu.
Steady Performance of Cryptocurrencies
Despite the exciting developments in meme stocks, cryptocurrencies like Dogecoin and Shiba Inu showed stable performance. On Wednesday, both Dogecoin and Shiba Inu experienced minor increases of 2.5% and 1.5%, respectively, while Bitcoin, the leading cryptocurrency, saw a growth of over 5%. During the peak of GameStop’s rally on Monday, Dogecoin and Shiba Inu saw a rise of nearly 6% and 5%, respectively, reflecting the relationship between meme stocks and memecoins.
The success of Dogecoin in 2021 can be largely attributed to the GameStop saga. Investors seeking a cryptocurrency equivalent to meme stocks turned to Dogecoin, propelling its value to a peak of $0.74 per coin in May 2021. However, despite the recent surge in meme stock activity, Dogecoin and Shiba Inu remained relatively unaffected this time around.
Evolution of the Crypto Market
The resilience of Dogecoin and Shiba Inu amidst the meme stock craze highlights the evolution of the cryptocurrency market. According to blockchain researcher Pat Doyle of Amberdata, the recent rally in meme stocks was not expected to have a prolonged impact similar to that of 2021. Factors such as the COVID-19 pandemic, remote work trends, increased online presence, and stimulus payments that contributed to the cryptocurrency boom in 2021 are not prevalent in 2024.
Doyle emphasized that while certain memecoins like Floki and Popcat saw significant gains during the recent meme stock rally, they lack the market dominance and popularity of Dogecoin and Shiba Inu. The crypto market has matured over time, with various crypto assets responding differently to movements in the equity market.
One noteworthy mention is the memecoin “GME” (no relation to the stock), which witnessed remarkable returns following Roaring Kitty’s resurgence on Twitter. However, other crypto assets in decentralized finance (DeFi) segments remained steady, indicating the diverse reactions within the crypto sector to market dynamics.
Mainstream Adoption of Cryptocurrency
The mainstream acceptance of cryptocurrency has been highlighted by significant regulatory developments, such as the approval of spot Bitcoin exchange-traded funds (ETFs) by the Securities and Exchange Commission in January. This regulatory approval has attracted major financial institutions like BlackRock and Fidelity into the blockchain and crypto sphere, propelling crypto to new heights in terms of adoption and market presence.
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