The cryptocurrency market has been witnessing a significant surge in the past week, with meme coins such as Shiba Inu, Dogecoin, Pepe Coin, and Floki Inu making more notable strides compared to Bitcoin and Ether. According to data from CoinDesk and Benzinga Pro, these meme coins have recorded growth rates of 8%, 7%, 92%, and 76% respectively, outpacing the weekly gains of Bitcoin and Ether at 22% and 16.5%.
The industry's anticipation around the US Securities and Exchange Commission (SEC) potentially approving BlackRock’s Bitcoin ETF application is considered a driving factor behind this meme coin surge. Additionally, actions such as the PEPE team's token burn of nearly 7 trillion tokens, which has decreased supply and possibly enhanced value, might also be contributing to this trend.
In the backdrop of Bitcoin's surge, altcoins typically rally after Bitcoin's significant price increases, a trend that is evident in the current market scenario. For instance, open interest in Dogecoin futures surged by 50%, indicating expected volatility. Dogecoin's value has risen over 23% in the past week and nearly 8% in the last 24 hours. Despite being below its all-time high of approximately 74 cents, Dogecoin trends among top tickers on platforms like Stocktwits.
Anthony Pompliano of Pomp Investments shared his optimistic outlook for Bitcoin with CNBC. He expects Bitcoin to rally "hundreds of percent" above its old highs, potentially leading to larger gains for riskier altcoins like Dogecoin and Ethereum, which recently topped $1,800. He noted that investors are "buying these assets at suppressed prices", suggesting a positive sentiment among crypto investors.
Despite the potential for high returns due to their extreme volatility, it's important to note that meme coins present substantial risks as many lack practical applications. This surge in meme coins comes amid broader optimism in the crypto market, as firms like Grayscale aim to convert their Bitcoin trust into a spot Bitcoin ETF, and JPMorgan anticipates SEC approval soon. However, the specific timeline for these approvals remains uncertain.
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