What happened
Boy, meme cryptocurrencies have had a rough go lately. Top dog-inspired cryptocurrencies such as Dogecoin (DOGE 2.01%) and Shiba Inu (SHIB 4.13%) have been hit hard by the market volatility we've seen in the crypto world in recent weeks. However, as of 8:45 a.m. ET, these top meme tokens have surged back today. Dogecoin and Shiba Inu saw increases of 9.2% and 9.3%, respectively, over the past 24 hours.
Dogelon Mars (ELON) was also up 14.7% over this time frame. This little-known meme token has surged to 125th spot in the cryptocurrency market cap rankings, and is now the doggy-coin to watch among meme token aficionados.
Image source: Getty Images.
A market-driven rebound in the crypto world appears to be responsible for most of the rally in these meme tokens. The entire crypto sector appreciated 8.2%, though it is worth noting that meme tokens have moved more aggressively than the market in recent weeks. Today, that's been a good thing.
Dogecoin in particular has received another boost from Elon Musk today, as the celebrity CEO suggested McDonald's accept Dogecoin as payment, saying he'd eat a "Happy Meal on TV" if McDonald's followed through.
So what
Looking at the macro and token-specific drivers for meme tokens, today appears to be much more of a positive day. The outlook for the Federal Reserve's upcoming meeting on Wednesday isn't all doom and gloom right now. Elon Musk is lightheartedly tweeting once again about Dogecoin. And, perhaps most importantly, sentiment among retail investors has improved with this recent pop.
The benchmark U.S. 10-Year Treasury yield, often used as the discount rate for stocks and now (seemingly) being tied to crypto valuations as well, has started to inch higher today. That said, bond yields did drop on Friday and Monday, suggesting investors may not be as worried about an ultra-hawkish 50 basis point move this coming meeting. For risk assets, that's a good thing.
Meme tokens tend to be among the most volatile cryptocurrencies, and therefore swing much more wildly to the upside or downside on specific catalysts. Today's move suggests near-term momentum is once again positive.
Now what
The question investors looking at Dogecoin, Shiba Inu, or Dogelon Mars must consider right now is whether this near-term move can be sustained. As we've seen over the course of the past few months, brief spikes have often interrupted longer-term declines. However, the longer-term negative trends have remained in place. Whether a few good days can be strung together or not remains to be seen.
For now, I think it's too early to tell which way the winds are blowing in the crypto world. Betting on a resurgence among speculative tokens seems too risky right now. That said, the crypto market always seems to have a way of amazing everyone.
