Popular meme stocks bounce back as cryptocurrencies stabilize after a volatile May. Analysts call it a “fear of missing out” or FOMO as traders move from one hot market to the next.
“We continue to see the rotation out of crypto and back into stocks preferred by the Reddit crowd,” said Lev Borodovsky, editor of the The daily shot Newsletter, wrote in an email to CoinDesk. “I noticed this connection a few months ago.”
With Bitcoin under pressure lately, meme stocks are getting an offer. Stocks like AMC Entertainment (NYSE: AMC), BlackBerry (NYSE: BB), GameStop (NYSE: GME), and even Wendy’s (NASDAQ: WEN) have rallied strongly over the past month.
Borodovsky used an equilibrium basket of seven popular meme stocks that came with the price of. are superimposed Bitcoin. His graph shows the occasional rotation over the past few months.
“Meme stocks rise above their reasonable ratings based solely on the excitement of retail investors, who are often more there for the lulz than to make money,” wrote Mati Greenspan, founder of Quantum economy, in a newsletter published on Wednesday.
More than 63% of all new trades made by UK traders between May 23rd and June 2nd were loud David Jones, Market strategist at Capital.com, a European trading and investment platform.
“The volatility is really off the charts and the odds are good, a bit like the cryptocurrency rout in May, if the price turns it’ll burn a lot of fingers,” Jones wrote in an email to CoinDesk.
Bitcoin is up about 25% since the start of the year, compared with GME and AMC increasing nearly 1,000% over the same period.
The return on the cryptocurrency is still above the 14% return on the S&P 500 so far this year. Bitcoin trailed the Thomson Reuters Core Commodity CRB Index’s return of 26% over the same period.