FOMO Is Increasing Demand for Meme Cryptocurrencies
The fear of missing out is pushing investors to choose cryptocurrencies with a lower capitalisation and higher growth potential. This is especially visible in a rallying market. Last week, the cryptocurrency market’s capitalisation rose by 8%, with Bitcoin’s moving up by 13% and SHIB’s increasing by 300%.
US Federal Reserve chairman Jerome Powell’s comment about the regulator’s unwillingness to ban cryptocurrency has positively affected the cryptocurrency market’s dynamics. It has relieved big investors, who have again expressed interest in Bitcoin as a hedge against inflation. JPMorgan analysts wrote about it in their note on Thursday. As confirmation of this inference’s accuracy, on 6 October, news emerged that the world’s second best-performing hedge fund, Soros Fund Management, invested in Bitcoin. Starting in 2020 (when the Federal Reserve switched on the money-printing machine), institutional investors started to overtake the retail sector in terms of trading volume.
Meanwhile, with big capital opting for Bitcoin, traders and small investors are looking for small coins capable of growing fast in a short period. Yet again, an ‘underdog’ cryptocurrency saw a boost with assistance from Elon Musk; on Monday, he published a photo of a Shiba Inu puppy in a Tesla boot.
Whether it was a pump organised for lucrative reasons or not is unknown. Analysis by the company Kaiko shows that, on 4 October, the volume across all cryptocurrency exchanges increased, which indicates demand from a large audience.
But a few days before the tweet, on 30 September, Santiment registered a whale’s attempt to buy 6 trillion SHIB at $44,000. They now cost $282,000.
Meme cryptocurrencies are at the top of their popularity and are showing considerable growth far ahead of the market. But if you succumb to FOMO, be sure you don’t become plankton for the whales.
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