Here Are 3 Meme Coins That Are Rallying Nicely Today, as Meme Mania Picks Up

Most investors are well aware there’s some significant overlap between meme stocks and the dog-inspired meme cryptocurrencies we’ve all grown to love or hate. In today’s market, most attention is being paid to meme stock GameStop, which more than doubled in pre-market trading this morning, on a tweet from meme stock legend Keith Gill (also known as Roaring Kitty).

For investors in meme cryptos Dogecoin (DOGE -2.13%), Floki Inu (FLOKI -4.18%), and Bonk (BONK -6.82%), intraday moves of 3.7%, 14.8% and 9.7%, respectively, make sense. These moves were seen as of 11:45 a.m. ET, from yesterday’s close.

Let’s dive more into what’s driving these tokens higher today, and what traders are pricing in.

Meme rally picks up steam

Gill’s purported bet is one that has certainly raised eyebrows. The meme trader, who many rallied behind during GameStop’s previous rally, has amassed an absolutely massive $116 million position in GameStop. The move suggests he believes another rally is more likely than not over the next three weeks (his call options expire on June 21).

For meme traders in the stock market or on digital asset exchanges, timing is everything. Betting on when a flood of capital will come into these assets, and being right, is really the only way to benefit from the massive volatility many of these assets see. It’s also true that historically, meme tokens have seen greater upside (in many cases) relative to meme stocks during previous rallies. Accordingly, it’s not surprising to see interest build in Dogecoin, Floki Inu and Bonk in recent days.

Interestingly, the options trade and massive stock position Gill has reportedly taken appears to be shorter-term in nature than his previous bet in late 2020, which included options that expired roughly six months in the future. Given the incredible volatility we’ve seen in recent weeks, and the seemingly endless pressure from short-sellers (tied to GameStop’s lack of reticence to issue new shares), it’s entirely feasible this shorter time frame is appropriate right now.

Is there enough fuel for this rally to continue?

There are a number of key differences to note between today and the late 2020, early 2021 meme rallies that took hold in both the stock and crypto markets. For one, the interest rate environment is vastly different. Investors don’t have access to ultra-cheap (nearly free) money, which was directed by retail investors en masse into these speculative assets. To a great degree, the Federal Reserve has done a good job of tamping down such speculation. And the ability of companies or crypto projects to issue shares or tokens when prices rise could act as a natural deterrent to squeeze cycles. That’s not good for speculators.

On the other hand, there are trillions of dollars on the sidelines sitting in money market funds that may be looking for higher returns, should the opportunity present itself. The question is whether retail investors who may have benefited from the last meme rally will jump back into the fray. Today’s price action in most meme assets suggests that some level of caution is being exhibited by investors, with much of this morning’s rally dissipating as of early afternoon trading.

Personally, I think these assets are simply too risky from a volatility perspective, and will be gladly watching the mayhem from the sidelines. But suffice it to say, I think we’re going to be in for a wild and wacky three weeks ahead in these assets.