If there was any doubt about the return of animal spirits in the digital asset space, one only needs to look at the recent surge of dog-themed memecoins, Dogecoin and Shiba Inu, which have taken the lead in the latest crypto rally.
Notably, it isn’t just Bitcoin that is benefiting from this rally. Smaller tokens, known as altcoins, are beginning to outperform their larger counterpart, indicating a spreading sense of optimism in the market.
The Rise of Memecoins
Dogecoin and Shiba Inu, named after internet jokes rather than serious blockchain projects, represent the most exuberant segments of the crypto market. Dogecoin, associated with the internet-famous Shiba Inu dog meme, serves as the inspiration for the Shiba Inu token.
Over the past couple of weeks, these memecoins have outperformed Bitcoin. While Bitcoin has seen a 22% increase since November 21st, Dogecoin prices have surged by 40% during the same period, with Shiba Inu gaining 34% in value. In fact, both Dogecoin and Shiba Inu experienced a 14% jump in the past 24 hours, surpassing Bitcoin’s 5% gain.
Broader Market Trend
The bullish sentiment towards altcoins, particularly memecoins, suggests that the crypto rally is expanding. This trend can have a positive impact on companies like Coinbase Global, as altcoin trading plays a significant role in their brokerage business.
However, it’s important to note that if the fervor surrounding memecoins begins to fade, it could be a signal for a potential market correction. When smaller coins experience outsized gains and the market becomes excessively speculative, caution should be exercised.
The recent surge in memecoins is currently viewed as a positive development for the overall cryptocurrency market. But it is crucial to monitor the situation closely to ensure stability and sustained growth.