Is The Era Of Meme Stocks And NFTs Already Over?
With an excess of stimulus money and time on their hands, people's attention landed on commission-free trading platforms, leading to an exuberant rise in prices this year.
Now, with vaccines rolling out, final stimulus checks being spent and warm weather returning, attention is returning to socializing and traveling.
Memes Fall Flat: So goes the explanation for why prices in meme stocks have been flat since the frenzy reached fever pitch in late January, according to Bloomberg.
Searches for “Google flights” reached their a popularity score of 100 (the highest possible for a given period of time) in the past week, while searches for phrases like “stock trading” and “investing” have plunged, Bloomberg said, citing Google Trends data.
“The stimulus check impact on retail trading is waning,” Bloomberg quoted Edward Moya, senior market analyst at Oanda, as saying. “Many Americans are looking to go big on attending sporting events, traveling across the country, vacationing, visiting family and friends, and revamping wardrobes before going out to restaurants, pubs and returning to the office.”
Retail traders accounted for nearly 25% of trading activity in the past year, up from an average of about 10% over the decade prior to the pandemic, Benzinga noted two weeks ago, citing Goldman Sachs.
NFT Prices Plunge: Meanwhile, interest in another source of exuberance, non-fungible tokens, appears to be on the wane as well, just weeks after the $69.3 million Beeple artwork sale brought the digital innovation to the world's attention.
What is an NFT? Read Benzinga's primer on what they are, how they work and where to buy them.
Average prices for NFTs peaked in February at about $1,400 but have fallen by almost 70% since then, according to Bloomberg, using data from NFT market-tracker Nonfungible.com.
Bitcoin.com noted a decline in interest in NTFs. The site said search terms for NFTs have been falling since mid-March highs on Google in the U.S. and worldwide, though the numbers still remain high, mostly in the 90s.
Bitcoin quoted an author who's written on NFTs saying that the market suffers from an oversupply as more people realize how easy NFTs are to create.
NFTs are not likely to go away, as they represent a new innovation with promising uses for proving ownership and tracking ownership history, as well as for people's online identities.
But the fall in prices suggests the recent boom was a temporary rush of excitement for a concept that's still taking shape.
Before long, the meme stocks and NFTs of early 2021 may appear in retrospect to have been nothing more than the oddities of a feverish pandemic.
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