E Reddit Stocks Continue Benefiting From Cryptocurrencies & Speculation

Are Small-Cap Stocks Over-Hyped Right Now?

I think a lot of the attention on small-cap stocks has recently gained momentum from the growing interest in higher-risk assets like cryptocurrency. Everything from Bitcoin and Ethereum to meme coins like Dogecoin and SafeMoon are experiencing speculation-fueled breakouts this year. Why would cryptocurrencies spark momentum for stocks? Now I am only suggesting the relationship here based on the pool of traders we're talking about. Retail/mom & pops are usually more open to taking on risk, especially when certain markets are hot. Furthermore, the growing use of platforms like Robinhood and Webull has also opened up an opportunity for your average trader to gain exposure to cryptocurrency and stocks on the same platform. 

When stocks cooled, we saw an almost immediate rotation into cryptocurrency from traders. Similarly, when Dogecoin, Bitcoin, and other cryptocurrencies dropped with capital gains tax news, the "reset" saw stocks moving first. Obviously, the bullish sentiment in the stock market today also has cryptocurrencies back in focus. All the same, this is now a factor to consider. With the IPO of companies like Coinbase (COIN), this once-fringe area of the market has become much more prevalent, especially with more mainstream figureheads like Tesla (TSLA) CEO Elon Musk and Mark Cuban getting behind the trend. 

Something For Everyone?

BUZZ ETF chart

Whether you're trading cryptocurrency or stocks, the goal is the same: making money and repeating the process. With the rise of social media helping fuel demand in the stock market, we've got millions of new traders flooding into stocks and crypto right now. Whether they're experienced or not is secondary to what it has resulted in, hundreds of millions of dollars coming into the public markets. We've even seen new ETFs pop up that focus on this emerging trend. Take the VanEck Vectors Social Sentiment ETF (BUZZ), for example. According to its documentation, the ETF "seeks to track, as closely as possible, before fees and expenses, the price and yield performance of the BUZZ NextGen AI US Sentiment Leaders Index (BUZZTR), which is intended to track the performance of the 75 large-cap U.S. stocks which exhibit the highest degree of positive investor sentiment and bullish perception based on content aggregated from online sources including social media, news articles, blog posts, and other alternative datasets."

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William K. 1 month ago Member's comment

Why is crypto-currency surging? It is "something new" and so it attracts attention, plus it is not that well understood, and so the mystery attracts some folks. The market is certainly not all cold science, and thus arriving at a totally logical analysis will be challenged a bit. And so certainly there is "Something for Everyone."