April 19, 2024
McDonald's McRib and Bitcoin: A Taste of Memetic Market Observations
Bitcoin News

McDonald’s McRib and Bitcoin: A Taste of Memetic Market Observations

Fintwit and cryptocurrency proponents have been keen to draw attention to an unexpected association that will be evident next month when the venerable McRib makes a reappearance.

McDonald’s normally does not provide the oblong sandwich; instead, it occasionally does and only for a brief period (this is ascribed, among other things, to their marketing approach and the price of pork).

Now, with less than a month until it returns to menus, market observers are attempting to draw a correlation between McRib’s comeback and global asset markets, including Bitcoin.

Ritholtz Wealth Management’s COO, Nick Magguilli, noted that the average daily return on the S&P 500 was 0.04% greater while the McRib sandwich was accessible than when it wasn’t.

It is absurd and serves as a good lesson that correlation does not imply causation. However, for a business that depends on memes, this one is about as tasty as it gets.

Some cryptocurrency analysts are currently busy tracing lines on charts to make comparisons between the price performance of Bitcoin and the juicy presence of the McRib on the menu.

The outcomes? Pretty erratic.

Every year since 2016, McDonald’s has brought back the McRib, and in the previous seven iterations, the cost of Bitcoin has increased four times.

In 2016 and 2020, the peak return over the first 90 days after McRib’s reappearance was slightly over 50%. The returns over the same period are far more dramatic in 2017 and 2021, exceeding 200%.

The latter surge, however, occurred throughout those years’ bull markets.

Following the reintroduction of the spicy sandwich in 2019, Bitcoin remained unchanged, momentarily climbing in the same month McDonald’s reintroduced McRibs. More likely to have had an impact on this price movement was the Chinese government’s decision to encourage the domestic blockchain industry.

In contrast, bullishness peaked between 2018 and 2022. The launch of the McRib was timed to coincide with an important drop in both situations.

After plummeting by over 50% in 2018 and by 22.5% in 2022, Bitcoin crashed to $3,250, reaching lows of $15,500 in the weeks that followed McRib’s reappearance.

It’s important to note that McDonald’s regularly reintroduces the sandwich around October, November, and December, towards the end of the year.

Data from CoinGlass shows that since 2016, Bitcoin has performed well in October six out of seven times, giving rise to yet another meme: Uptober.

On only three out of seven occasions has it been positive in November and December, though.

Performance of Bitcoin during the past ten years in October, November, and December from CoinGlass.

The other Jarvis Labs co-founder, Ben Lily, connected market ennui with the need to identify a linkage, whether it be with the McRib or seasonal shifts.

“I’m guessing not everyone even knows what the pressed-like-a-rack of ribs questionable meat sandwich is, but the fact we are talking about it goes to show you just how slow things are,” he stated. “Analysts are starting to find any explanation for price movement.”

The association is probably simply a (wonderful) meme because there is no clear trend or causality. And that’s most likely okay.

Image: Wallpapers.com

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