It would be premature to say that this latest, and rather long-tail, crypto rally is over. While investors remain keen on owning coins, tokens, and related stocks, this week has been a pretty bleak picture for cryptocurrencies overall. With the decline in the group's main assets, a number of meme and utility coins also felt the pinch.
One of the most enduring and popular meme coins, Shiba Inu (Code: SHIB)According to data compiled by S&P Global Market Intelligence, the stock has fallen more than 12% over the period.utility cipher Polka dot pattern (cipher: dot) suffered a similar decline. avalanche (cipher: AVAX) and Aptos (cipher: APT) The results were even worse, with decreases of 14% and 21%, respectively.
Where the top cryptocurrencies go, others will follow
These four titles and other altcoins are more or less Bitcoinwhich also fell significantly this week.
At least some of that has to do with comments from Federal Reserve officials, some of whom now appear hesitant to pull the lever on the series of rate cuts that officials say they aim to introduce this year. . All things being equal, lower interest rates increase the preference for riskier investments because assets that are considered safer now pay out less than before.
This week, many investors took advantage of these safety measures. The yield on the benchmark 10-year U.S. Treasury note rose more than 9 basis points on Friday alone, a relatively high percentage increase for a relatively solid investment. Earlier on Wednesday, the yield hit a new yearly high of nearly 4.43%.
Meanwhile, precious metal prices also rose significantly, with one tracking index showing a 5% weekly gain. Gold, silver, and other valuable metals are also traditionally popular as safe investments, and many people prefer them to bonds because they consider their inherent value to be higher.
Reason for encouragement
So is this a “boring low” as some crypto enthusiasts call it, or the beginning of a much longer and more worrying slide?
In fact, I think the growth train will restart in the near future. Investors may be losing patience with interest rate cuts, but if the U.S. economy remains strong and inflation subsides, even modestly, a rate cut is almost certain to happen. Cryptocurrencies are a more dynamic and exciting asset class than precious metals and (especially) bonds, so we'll probably see more than a few discount hunters putting their money in coins and tokens in the near future.
Should you invest $1,000 in a Shiba Inu right now?
Before purchasing Shiba Inu stock, consider the following:
of Motley Fool Stock Advisor Our analyst team has identified what they believe Best 10 stocks For investors to buy now…and Shiba Inu wasn't among them. These 10 stocks have the potential to generate impressive returns over the next few years.
stock advisor provides investors with an easy-to-understand blueprint for success, including guidance on portfolio construction, regular updates from analysts, and two new stocks each month.of stock advisor Since 2002, the service has more than tripled S&P 500 returns*.
See 10 stocks
*Stock Advisor will return as of April 4, 2024
Eric Volkman has a position in Bitcoin. The Motley Fool has positions in and recommends Avalanche and Bitcoin. The Motley Fool has a disclosure policy.
“Why Memes and Utilities Cryptocurrencies Stumbled This Week” was originally published by The Motley Fool.
