Traders have been using meme tokens as a proxy bet on the growth of Ethereum or other blockchains.
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Meme coins like PEPE, SHIB, and DOGE have surged as much as 26% in the past 24 hours due to a “spillover effect” from the growth of Bitcoin and Ethereum.
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Traders have been using meme coins as a proxy bet on Ethereum’s growth since late February, and the bullish demand for ETH has been increasing since mid-January due to expectations of a spot ETF approval in the U.S.
PEPE jumped 26% on renewed optimism, while DOGE and SHIB reversed Thursday’s losses to rise 10%. The meme coin category tracked on CoinGecko showed an 8.6% sector growth on average, as CoinDesk 20, a broad-based index of various tokens, rose 2.53%.
“As bitcoin and ether rise, a spillover effect is caused where coins deployed on ethereum and solana also surge – including meme coins,” shared Slater Heil, co-founder and COO of DeFi platform Blueberry Protocol, in a message to CoinDesk.
“Investors will take advantage of bullish conditions as much as possible, and meme coins are one way for them to do so. In the short-mid term, I expect a transition back to ‘fundamentally driven’ altcoins,” Heil cautioned.
Bullish demand for ether started to increase in mid-January amid expectations that it would be the next major token after bitcoin (BTC) to get a spot exchange-traded fund (ETF) in the U.S.
Coinbase premiums for Ethereum ecosystem tokens were higher than usual in the past week, suggesting recent demand was led by U.S. investors, as per CryptoQuant.
Link: https://www.coindesk.com/markets/2024/03/08/pepe-leads-meme-coins-rally-as-ether-nears-4k/?utm_source=pocket_saves
Source: https://www.coindesk.com
