Why Dogecoin, Shiba Inu and THORChain are on the rise today

Meme tokens and other cryptocurrencies rallied today as economic conditions turned more favorable and on some token-specific news. Price of meme tokens Dogecoin (DOGE 6.93%) and Shiba Inu (SHIB 14.84%) traded more than 5% higher and nearly 10.5% higher, respectively, around 1 p.m. Meanwhile, the price of the crosschain cryptocurrency THORChain (RUNE 7.71%) increased by about 10%.

Renewed interest

Cryptocurrencies appear to have benefited from renewed interest following the Federal Reserve’s half-point interest rate cut last week, setting the stage for a “risk-on” environment and potentially a weaker US dollar. Cryptocurrencies, viewed as altcoins, tend to do well when the dollar is in decline. Today, the price of Bitcointhe world’s largest cryptocurrency, broke above $65,000 for the first time in about two months as investors become more bullish on the soft landing scenario. Most of the market also appears to be benefiting from the new stimulus measures announced by Chinese officials this week.

Interestingly, economic data such as initial jobless claims and second quarter gross domestic product data came in better than expected today, sending Treasury yields higher.

But a new report from BlackRock today says some investors have begun to think of Bitcoin as a “flight to safety” because of its separation from geopolitical events and currency risk. That’s good news for crypto investors.

Also the massive payment platform PayPal announced yesterday that US traders on its platform can now buy and sell cryptocurrencies from their accounts, adding to the optimism. The company said in a press release that there has been a lot of interest from businesses to have cryptocurrency capabilities. PayPal also said it will allow businesses on the platform to send and receive certain cryptocurrencies to and from eligible third-party wallets. Given that Paypal and Venmo customers already have these capabilities in their digital wallets, this could lead to greater utility for crypto on one of the world’s largest payment platforms.

In more token-specific news, Shiba Inu seems to be on the rise thanks to the increase in the network’s burn rate, which recently managed to burn millions of tokens in single transactions. There is a massive amount of Shiba tokens in circulation, so being able to reduce the amount would lead to better supply and demand dynamics.

Altcoins benefit

I think the main thing driving these altcoins higher today is the rise of Bitcoin. As the largest and original cryptocurrency, Bitcoin serves as a proxy for the sector. Altcoins tend to be more volatile than Bitcoin, which is why they can experience larger movements.

THORChain’s ability to allow users to exchange tokens and assets across different blockchain networks presents an interesting applicability. But ultimately, I’m not interested in any altcoins or meme tokens right now. They are far too volatile and it is often difficult to understand a real investment case. Speculation seems to be the main driver of meme tokens like Dogecoin and Shiba Inu. I prefer to invest in some of the more liquid mainstream tokens like Bitcoin.