Meme coins outperform BTC, ETH and SOL as traders rotate their holdings
The $53 billion meme coin sector surged more than 11% on Tuesday, with coins like pepe (PEPE) and dogwifhat (WIF) rising 22% and 25% respectively.
The continued strong performance of meme coins suggests that traders are making profits on larger market cap assets like BTC and ETH and diversifying those profits into more speculative bets.
The CD20 index, which measures the performance of large-cap tokens, is up 1.72% in the last 24 hours.
Due to varying levels of liquidity, meme coins historically perform well during periods when BTC and ETH are in a range close to local highs and perform poorly when the broader market is down.
Dogwifhat, for example, was up more than 60% in May, while BTC was trading between $66,000 and $69,000.
WIF then lost 60% of its value over the course of 30 days following a market crash that saw BTC drop 21% over the same time period.
