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Bitcoin Although they are not moving in line with meme stocks like they were three years ago, this week’s stock market movements may indicate that a big crypto rally is on the way.
GameStop and fellow meme stock AMC Entertainment have each risen more than 160% over the past two days. Meanwhile, Bitcoin was little changed, declining just 0.1% over the same period, according to Coinmetrics. In contrast, in 2021, GameStop and AMC rose 821% and 373%, respectively, from January to April. Bitcoin’s increase during this time was more modest, but still reached 96%.
“This is not 2021, when the world was locked down and there was a lot of liquidity,” said Antoni Trenchev, co-founder of crypto exchange Nexo. “It’s worth remembering that the GameStop frenzy peaked in January 2021, long before Bitcoin hit highs of over $60,000 in April and November of that year. If you want to read the events of the past 24 hours, I would suggest that GameStop may be acting as a leading indicator of what’s to come.”The next step after Bitcoin’s halving. ”
“Today’s stronger-than-expected U.S. producer price data indicates that the macroeconomic[economic] And the inflationary backdrop is unfavorable for Bitcoin’s rally, which is likely to remain range-bound after an explosive start through 2024, he added.
Certainly, there is a world of cryptocurrencies beyond Bitcoin, including meme coins. Yet they did not join the party in the same way. dogecoin According to Coin Metrics, the and Shiba Inu coins have gained about 3% each in the past two days.
Bitcoin is unique in the crypto world, driven by macro factors in the absence of concrete triggers to consider, such as the launch of a Bitcoin exchange-traded fund in the United States or the Bitcoin halving that occurs every four years. It is widely considered to be a class of .
Noel Acheson, an economist and author of the newsletter Crypto is Macro Now, said the rise in meme stocks was “more like a revving up of the engine than a complete takeoff” and that macro issues are It added that it still puts pressure on Bitcoin.
“It could be encouraging if tomorrow’s inflation numbers come in better than expected, but there is a lot of uncertainty,” he said.
This year, the United States allowed the introduction of the first Bitcoin ETF, led by BlackRock, the world’s largest asset manager. These funds are expected to attract new types of investors and provide a steady flow of new capital, while reducing volatility. Furthermore, the 2023 US local banking crisis, which started the current Bitcoin cycle, turned many people to the potential of cryptocurrencies as an alternative financial system and hedge against uncertainty.
“Bitcoin is no longer considered a purely speculative asset,” Acheson said. “The story of its preservation of value is much more deeply rooted, its holder base is much broader, and it is institutionalized to some extent.”
Sylvia Jablonski, CEO and Chief Investment Officer of Defiance ETF, said that while Bitcoin “fell into the meme stock category” in 2021, the market is now more serious. He added that the company is beginning to show signs of being accepted.
“We’re seeing a shift in confidence in the length of Bitcoin’s holding period,” she said. “Bitcoin has become more commercial as an ETF wrapper, with both retail and institutional investors tending to hold both Bitcoin and Ether rather than day trading them like meme stocks.”
Bitcoin has soared so far in the first quarter of this year, at one point nearing $73,000, but has recently returned to what many investors describe as a healthy move. With few catalysts and exposure to macroeconomic headwinds, these investors are warning that the Bitcoin price slump could continue for several more months, causing the price to fall further.
“This period of recovery could last for a long time and be very slow,” Trenchev said. “Bitcoin’s narrative faucet has run dry…and I don’t expect a resurgence in meme stock enthusiasm to be the catalyst for Bitcoin’s next move.”
