By Frances Yue
Hello! Welcome back to Distributed Ledger. This is Frances Yue, crypto and markets reporter at MarketWatch.
Bitcoin hit an all-time high at $69,208.79 on Tuesday, its first time reaching a record high since November 2021.
On such optimism, meme coins rallied as well: Dogecoin (DOGEUSD) rose about 50% over the past seven days, and another dog-themed coin, Shiba Inu (SHIBUSD), surged 209.8% over the past seven days, according to CoinDesk data.
Some newer meme coins also saw significant gains. Bonk coin went up 112% during the past seven days, and frog-themed Pepe coin (PEPEUSD) jumped 158% for the same period, according to data from CoinGecko. Dogwifhat, based on a picture of a dog wearing a hat, rallied 180%.
What drives the rally
Meme coins’ rise came as investors “tried to squeeze every last bit of bullish conditions,” according to Slater Heil, co-founder and chief operating officer of decentralized-finance platform Blueberry Protocol. Meme coins are usually much more volatile than bitcoin, often outperforming bitcoin in bull markets and underperforming the No.1 cryptocurrency in bear markets.
Despite meme coins’ recent rally, the level of retail participation in the crypto market is still much lower than in 2021, when bitcoin last hit a record high, according to Rich Rosenblum, co-founder and president of digital-asset trading firm GSR.
Still, when bitcoin “approaches and hits new highs, that’s a great reason for the retail interests to come back,” Rosenblum said during a call.
Adding to the evidence of retail investors’ gradual return is that crypto exchange Coinbase (COIN) was ranked in the top 100 again in the U.S. Apple App Store earlier this week for the first time since February 2022, according to data from the Block.
As bitcoin scored a new record high, some investors may sell some of the bitcoin they own in order to capture the gains and invest in other areas of the crypto market, such as meme coins and nonfungible tokens, Rosenblum said.
The trading of meme coins is highly speculative, Rosenblum added.
Bitcoin and stocks both near record highs?
Bitcoin reached an all-time high on Tuesday of $69,208.79, while the S&P 500 SPX ended lower that day at a level 1.1% off its record high reached last week.
The last time bitcoin hit an all-time high high while the S&P 500 closed in on a record was on April 13, 2021, according to Dow Jones Market Data. One month later, bitcoin had declined 23.8% and the S&P 500 had lost 0.7%. Six months following the date, bitcoin had fallen 10% while the S&P 500 had gained 5.4%. Bitcoin had dropped 35.6% one year afterwards, while the S&P 500 had risen 7.4%.
This data set is not statistically significant and is not indicative of future performance.
Crypto in a snap
Bitcoin gained 8% over the past seven days, and ether rose 10.8% during the same period, according to CoinDesk data.
Must-reads
Bitcoin is halving again in April. Here’s why it’s different this time. (MarketWatch)As bitcoin hits record high, only two members of Congress have bought crypto since 2021 (MarketWatch)
-Frances Yue
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
03-06-24 1641ET
Copyright (c) 2024 Dow Jones & Company, Inc.
