The market started 2023 with a roar, and it’s not just Wall Street that feels it. The meme-based, retail-focused trade that in many ways represented both highs and lows from 2021 to 2022 is back. So-called meme stocks and ‘memcoins’ – their equivalent in the cryptocurrency world – outperform conventional risk-sensitive assets.
The same is true in the world of digital assets. Dogecoin, a crypto based on a dog meme, has jumped 25% since the beginning of the year. Shiba Inu, which is itself a memecoin that refers to dogcoin – is up about 50%. The Bitcoin
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, the biggest crypto of the bunch, and in many ways, also the favorite of those with a penchant for memes, is up 27% since the start of the year. While there is some substantial news about Shiba Inu – its developers have big ideas for a wider blockchain universe “Shibarium”. Let’s say the stock market is a steam engine, the meme and crypto stocks are like the valve that whistles when the steam picks it up. And beyond the eye-popping price jump, there are some indicators that may convey optimism.
The CBOE Volatility Index — Wall Street’s so-called fear gauge, known as the VIX — fell slightly in recent days to its lowest level since early April 2022, when the S&P 500 was 15% higher. The Crypto Fear Index shows neutrality and stands at 52 on a scale of 1 to 100. Not bad considering we’re only two months after the unprecedented bankruptcy of crypto exchange FTX, which looked like an existential crisis for digital assets.
Economic data suggest that inflation is moderating and that the U.S. economy is slowing enough to warrant a downgrade by the Federal Reserve, whose aggressive inflation-fighting monetary policy was largely responsible for last year’s market declines. That’s good news, and it’s also what’s driving the broader stock market higher. In recent days. From Wall Street to Reddit, few need to mention how bad 2022 was, but we’ll remind you anyway. It was the worst year for the stock market since 2008 and one of the bleakest ever for crypto. And this rally is a sign of how much investors hope that 2023 will be better.
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