This article originally appeared in First Mover, CoinDesk’s daily newsletter, putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.
Bitcoin fell below $61,000 on Thursday as the crypto market continued its downward movement that has persisted throughout the week. BTC dipped to $60,815 at around 11:00 UTC, trading about 2.25% lower than 24 hours before. The CoinDesk 20 Index (CD20), which measures the performance of the broader digital asset market, meanwhile has sunk by about 2%. Ether is trading just below $3,000, down 0.9%, while SOL has declined by nearly 3%. The crypto market could also soon be faced with a wave of supply events delaying a return to upward movement, with nearly $11 billion worth of BTC set to be distributed to creditors of Gemini’s Earn program and the long-defunct Mt. Gox, according to cryptocurrency analysts K33.
VanEck subsidiary MarketVector has started an index based on the performance of the top six meme coins. The MarketVector’s Meme Coin Index, which trades under the symbol MEMECOIN, is up 195% on a yearly basis. For comparison, the CD20 is up 97% during the same period. MEMECOIN tracks Dogecoin, Shiba Inu, Pepe, dogwifhat, Floki Inu and BONK, which account for nearly $47 billion of the total meme coin market cap of $51 billion, according to CoinGecko. While they unashamedly represent the lighter side of the cryptocurrency market, some commentators believe that meme coins could continue to show impressive returns due to low fees on Solana allowing traders to make small bets for potentially large profits.
The ‘Boden’ meme coin surged on Wednesday following a throwaway comment from former President Donald Trump. Jeo Boden (BODEN), the joke crypto token referring to a misspelling of President Biden’s name, jumped after Trump said he didn’t like it as an investment. The Republican challenger for the White House was hosting an impromptu Q&A session at the Trump Cards NFT Gala in Florida when he was asked about BODEN. The token jumped as high as $0.42 before retreating below $0.40 over the ensuing hours. At the time of writing, it is priced at around $0.36, up nearly 16% in the last 24 hours. Trump also said he intends to start accepting donations for his presidential campaign in cryptocurrency.
The table shows bitcoin and ether’s correlation with major equity indices, the dollar index and the VIX index.
The correlation has declined to nearly zero, meaning the two cryptocurrencies have decoupled from the broader market.
Their uncorrelated nature could potentially attract macro traders looking to lower their portfolio volatility while improving risk-adjusted returns.
– Omkar Godbole
