Meme coin prices have staged a strong comeback this week after spending the past few months going sideways or plunging. Shiba Inu token jumped to $0.000026 on Wednesday, a 43% increase from its April lows.
Pepe, Shiba Inu, and Milady Meme Coin are soaring
Pepe price surged to a record high of $0.000142, up by 256% from its April lows. As we mentioned previously, this rebound happened after the token formed an inverse head and shoulders pattern. This year, it has become one of the best-performing cryptocurrencies, increasing by over 1,500% from the year-to-date low.
Meanwhile, the Milady Meme Coin (LADYS) token jumped to $0.0000021, more than double its lowest point in April. Other meme coins like Floki, Dogecoin, and Book of Meme (BOME) have all jumped sharply recently.
There are a few reasons why these tokens have surged. First, there are signs that whales are accumulating some of these tokens. For example, on-chain data shows that Block Tower Capital bought 202 billion tokens worth over $2.2 million last week.
Bitcoin ETFs inflows
Second, Bitcoin ETFs have started seeing strong inflows recently. Data shows that the iShares Bitcoin Trust (IBIT) has added over 277k coins while FBTC, ARKB, BITB, and BTCO have over 159k, 48k, 36k, and 7.5k Bitcoins. Altogether, Bitcoin ETFs hold over 842,823 coins worth over $58 billion today.
This trend may continue in the coming years as more companies and hedge funds seek exposure to the coin. Historically, Bitcoin has outperformed stocks and some analysts believe that this trend will continue as a demand and supply mismatch continues.
Meme coins like Floki (FLOKI), Dogecoin (DOGE), and Milady Meme Coin (LADYS) do well when there is strong demand for Bitcoin (BTC). The theory among many traders is that it is always cheaper to buy these tokens instead of Bitcoin, which is changing hands at over $70,000 apiece.
Third, these tokens have jumped after last week’s US inflation report. According to the Bureau of Labor Statistics (BLS), the headline Consumer Price Index (CPI) dropped to 0.3% MoM and 3.4% YoY.
If this trend continues, the Federal Reserve will opt to start cutting interest rates to support an economy that is slowing. Consumer confidence has tumbled, retail sales have slowed, and the manufacturing and services PMIs have moved to the contraction zone.
Meme coins and other risky assets like stocks perform well when there is hope that the Fed will start cutting interest rates. This explains why US equities have jumped to a record high, with the Dow Jones sitting above $40,000.
Therefore, there is a likelihood that meme tokens like Floki, Bonk, Pepe, Milady Meme Coin, and Shiba Inu will continue doing well in the near term.
