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Shares of the popular meme are on the rise again as cryptocurrencies stabilize after the volatile month of May. Analysts call it “fear of missing out,” or FOMO, as traders rotate from one hot market to another.
“We continue to see a spin off cryptocurrency and a return to stocks favored by the Reddit crowd,” wrote Lev Borodovsky, editor of The Daily Shot newsletter, in an email to CoinDesk. “I noticed this link a couple of months ago.”
With bitcoin under pressure lately, meme stocks are chasing after a show. Stocks such as AMC Entertainment (NYSE: AMC), BlackBerry (NYSE: BB), GameStop (NYSE: GME) and even Wendy’s (NASDAQ: WEN) have risen strongly over the past month.
Borodovsky uses an equal weight basket of seven popular meme stocks overlaid with the price of bitcoin. His chart shows episodic rotation over the past few months.
“Mimi’s stock is rising far beyond its reasonable valuations that rely solely on the enthusiasm of retail investors who are often in it for lulz more than to turn a profit,” Quantum Economics founder Matty Greenspan wrote in a newsletter published Wednesday.
More than 63% of all new trades executed by UK traders between May 23 and June 2 involved derivatives linked to AMC stocks, according to David Jones, market analyst at Capital.com, a European trading and investment platform.
“The volatility is really off the charts and opportunities, a bit like a cryptocurrency trajectory in May, when the price turns and then a lot of fingers get burned,” Jones wrote in an email to CoinDesk.
Bitcoin is up 25% year-to-date, versus a nearly 1,000% increase for GME and AMC over the same period.
The cryptocurrency’s yield is still 14% ahead of the S&P 500 yield so far. Bitcoin lags behind the Thomson Reuters Core Commodity CRB index return by 26% over the same period.
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