Bitcoin can be considered as a good indicator of retail sentiment, although it isn’t the best, said JJ Kinahan, the chief market strategist at Tastyworks.
Kinahan noted a recent decline in retail sentiment, which had likely seen several popular meme stocks lag Bitcoin.
Bitcoin Is a Good Indicator For Retail Sentiment: JJ Kinahan
During a discussion on CNBC’s “Squawk Box” on April 22, JJ Kinahan agreed that Bitcoin has been a good retail sentiment indicator in many ways as people believed it to be. Crypto adoption is growing among people in the U.S. as many holds Bitcoin and other cryptocurrencies in their portfolios.
“Many of us thought for a long time that Bitcoin sort of was going to be the ultimate retail indicator,” says JJ Kinahan. “It shows there is becoming more acceptance of digital currencies in general…it is a good indicator, maybe not the best indicator of retail sentiment.”
JJ Kinahan believes meme stocks such as GameStop, Robinhood, and AMC Entertainment have more sustainable long-term volumes now, despite the decline in stock prices. Moreover, the confidence of retail investors has faded in meme stocks with the opening of offices, businesses, and other things.
In addition, the Federal Reserve’s reaction to the rising inflation rate and expectations of investors on meme stocks will be key for future growth prospects. With Bitcoin moving in correlation with Nasdaq, it will also impact retail sentiment for meme stocks. Moreover, Bitcoin and other cryptocurrencies have performed better than meme stocks.
He believes people are still participating, but not participating at the levels they were in 2021.
Performance of Bitcoin and Meme Stocks
Meme stocks such as GameStop, Robinhood, and AMC Entertainment skyrocketed in 2021 as trading volumes shot to record levels. However, the prices have now dropped as retail investors are not participating much. GameStop, Robinhood, and AMC stock prices are currently trading at $142, $10.58, and $17, respectively.
Likewise, Bitcoin also dropped from its higher levels in November 2021, with the current price trading near $40,000 levels. However, Bitcoin (BTC) and other cryptocurrencies have performed better than meme stocks in year-to-date terms.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.