(Bloomberg) -- It’s memecoin season in the digital-asset market, once again.

Some of the most speculative cryptocurrencies introduced in the past few years are trading at record highs. And old favorites such as Dogecoin are outperforming Bitcoin while the original digital asset approaches its peak price reached during the pandemic-fueled rally more than two years ago. 

Pepe, a frog-themed coin, and Dogwifhat — yes, a dog pictured wearing a hat — have been racking up fresh highs almost daily, according to data tracker CoinGecko. With most memecoins trading around a dollar or less, traders are piling into futures on 1,000 tokens per contract to help magnify price moves.

“Retail is hearing about the large crypto run-up from the Bitcoin ETFs, and has re-entered the market buying all the cheap coins,” said Jordi Alexander, founder of digital-asset trading firm Selini Capital. “PEPE and WIF are some of the new entrants of this cycle compared to last, as well as BONK. DOGE and SHIB getting a bit of comeback also — the key question is do dogs keep the lead, or is there a faster animal?”

Memecoins have long been a phenomenon among retail crypto investors and promoters, who see the microscopic prices as an opportunity to quickly post huge returns despite the lack of traditional fundamentals. The token Shiba Inu was considered the most popular in the last bull market, while Dogecoin is viewed as the original memecoin by many in the industry. Traders are positioning PEPE, WIF and other newcomers as the next big opportunity. 

It feels like “the usual bull market sentiment is back where people are eager to trade,” said Annabelle Huang, managing partner at digital-asset investment firm Amber Group.   

While prior memecoin rallies tended to indicated the top of the market, some advocates say this time is different, in part because of a change in the Bitcoin code know as the halving.

“It’s just the beginning,” said Ayesha Kiani, chief operating officer at crypto hedge fund MNNC Group. We “still have to go through halving and that’s normally the peak.”

Halving refers to a planned reduction in the rewards Bitcoin miners receive and it happens once every four years or so. Some analysts argue that the halvings benefit Bitcoin’s price. Optimism certainly abounds: for instance, MicroStrategy Inc., the largest corporate holder of Bitcoin, proposed increasing its cache of the token through the sale of $600 million in convertible senior notes.

Read: What Is Bitcoin ‘Halving’ and Does It Push Up the Cryptocurrency’s Price?

“Previous cycles saw projects pushing blockchain as a cure all for many societal and technological challenges,” said Ben Yorke, vice president of crypto exchange WOO X. “Now investors are ignoring those and focusing on what’s really important, the community driven narrative which are a hallmark of memecoins and decentralization in general.”

Bitcoin traded at $67,915 as of 8:36 a.m. in Singapore on Tuesday, in touching distance of its record peak of $68,991.85 from 2021.

(Updates the ninth paragraph with MicroStrategy’s plan to buy more Bitcoin.)

©2024 Bloomberg L.P.