Market Wrap: Cryptos Rise as Russia Mulls Bitcoin for Oil Payments; Dogecoin Rallies

Most cryptocurrencies traded higher on Thursday after Russia’s Duma committee chairman suggested during a news conference that bitcoin (BTC) could be accepted as payment for the nation’s oil and other resource exports.

Russia’s announcement contributed to a spike in BTC above $44,000, although cryptos were already tracking upside moves in equities earlier in the New York trading day. Still, traditional safe-haven assets, such as gold and the U.S. dollar, also rose on Thursday, suggesting some caution among global investors.

Alternative cryptocurrencies (altcoins) remain in the lead, evidenced by a decline in bitcoin’s market cap relative to the total crypto market cap over the past two weeks.

Dogecoin (DOGE), the popular dog-themed meme token, rallied as much as 6% in the past 24 hours, compared with a 4% rise in BTC over the same period. Meanwhile, Solana’s SOL token was up 10% and Axie Infinity’s gaming token AXS surged by 20% on Thursday.

Typically, a rally in altcoins signals a turnaround in the overall crypto market as investors increase their appetite for risk.

Elsewhere, meme stocks tend to lead traditional equities higher, similar to the risk-on nature of altcoins in the crypto market.

Meme stocks are popular among retail investors who exchange trading ideas through social media. In 2020, internet memes were created to symbolize periods of sky-high prices.

The chart below shows a recent uptick in the correlation between bitcoin and an index of meme stocks, created by Lev Borodovsky, editor of The Daily Shot newsletter. Several meme stocks, such as AMC Entertainment (AMC), rallied as much as 30% over the past week.

Decentralized finance (DeFi) tokens, however, continue to lag behind large market cap cryptos.

The chart below plots CoinDesk’s DeFi Index (DFX) versus CoinDesk’s Large Cap Index (DLCX). Over the past few months, the gap between DLCX and DFX has widened, which could indicate less appetite for risk among crypto investors.

Still, recent rallies in DeFi tokens could lead to outperformance versus large-cap tokens, similar to what occurred in mid-2021. For example, DeFi tokens such as AAVE and AMP have rallied as much as 9% over the past week, compared with a 7% rise in BTC over the same period.

Digital assets in the CoinDesk 20 ended the day higher.

There are no losers in CoinDesk 20 today.

Sector classifications are provided via the Digital Asset Classification Standard (DACS), developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets. The CoinDesk 20 is a ranking of the largest digital assets by volume on trusted exchanges.