It’s been an incredible day for high-risk assets, with speculators clearly moving back into various meme stocks and cryptocurrencies today. For Bitcoin (CRYPTO:BTC)a 2.5% move over 24 hours may seem like small potatoes, given what’s happening in the market today. Stoppage of play (NYSE:GME) stocks are up more than 70% this afternoon, with Reddit (NYSE:RDDT) also seeing its stock price rise around 10%, with the return of Keith Kill (“Roaring Kitty”) to social media. The meme craze that we all thought was dead may have just taken a break.
We will see. The message that brings speculators back into the market shows a man leaning forward in his chair, with many predicting that this could mean Roaring Kitty is considering adding a position (or has already done so). Its previous timing of moves in GameStop, which aligned with speculative surges in other high-risk assets such as cryptocurrencies, could mean that there are now the right catalysts to create a surge in demand for these assets, leading to an increase in prices in the short term.
Let’s see what to make of this news and another key catalyst for Bitcoin that many are now paying close attention to.
Meme mania is a big problem for speculators
Bitcoin’s daily movement has actually been quite orderly, and certainly much quieter than many thought, given this news. The fact is that Bitcoin’s status as a store of value and hedge for large money managers means these headlines don’t mean much to those with the kind of capital needed to move the price of this token .
Given the size of Bitcoin and its current market cap, it is also true that larger capital is needed to invest in this token to see the type of appreciation many expect to see in the largest crypto- currency of the world. However, calls for $1 million worth of Bitcoin are now proliferating, with Jack Dorsey among the top executives ringing the bell with this number. His recent announcement that Block (NYSE:SQ) Deploying approximately 10% of the company’s cash flow to acquire Bitcoin each month has provided another demand catalyst for Bitcoin that investors are clearly banking on.
Now the question is whether this increased demand from retail investors and speculators, combined with already strong demand from corporations and institutional investors, could be enough to spur Bitcoin’s next rally toward a six or seven range. numbers.
It’s a game of supply and demand
I certainly think Bitcoin is past the speculation stage. Those betting on a rise to a price target of, say, $1 million are likely to estimate that the road to that level will be long and arduous. Of course, historically speaking, this has not been the case. There are many reasons to believe that if history once again proves to be our guide (in terms of post-halving movements), Bitcoin could see excellent performance in the near term. But I think it’s also becoming increasingly clear that to see the market capitalization of an asset increase by billions of dollars, it’s going to take a very large increase in demand.
The new supply of Bitcoin has become increasingly limited, and there are certainly retail, corporate, and institutional investors who have reason to continue adding Bitcoin at this point in the cycle. However, I think it will be important for investors to take a level-headed approach to adding to this token over time. Spreading the dollar cost across these assets over time, as Block executive Dorsey would expect to do, might be the best solution.
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Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Bitcoin and Block. The Motley Fool has a disclosure policy.
Bitcoin Rises Today Following Speculation Meme Mania Is Back was originally published by The Motley Fool
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