If you needed another sign that the market was getting very frothy, the Roundhill Meme Stock ETF is back in business.
Roundhill Investments’ exchange-traded fund that seeks to offer exposure to stocks retail traders are hyped up about online is trading again after its predecessor launched in December 2021 and shut down in November 2023.
“Meme stocks were a large part of the exuberant sentiment in the 2020-2021 market, ultimately leading to a cyclical peak,” writes Jonathan Krinsky, BTIG’s chief market technician. “One sign that the froth was reaching fever pitch was the launch of a ‘Meme ETF’ on 12/8/21. That was essentially the peak in the Nasdaq before the ’22 bear market.”
He notes that the Nasdaq has rallied 60% since the ETF shuttered in 2023.
“History doesn’t repeat, but it often rhymes and this is another sign of some exuberance right now,” Krinsky writes. “It has been a relentless climb with very little pullbacks, but that doesn’t mean the divergences and issues in the consumer stocks should be ignored.”
This time around, the ETF’s top holdings include Opendoor Technologies, Plug Power, Applied Digital, QuantumScape, Cipher Mining, and Rigetti Computing. It’s return hasn’t scared off Wall Street so far: The Nasdaq is up 0.8%. The S&P 500 is up 0.6%. The Dow is up 194 points, or 0.4%. The actual Roundhill Meme Stock ETF is down 2.6%.