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Eurozone Deal Remains Elusive
ETFS Multi-Asset Weekly Eurozone Deal Remains Elusive
Coffee rebounds following Brazilian Real appreciation.
Chinese stocks cheer signs of further stimulus.
Sterling comes under pressure on inflation concerns.
Today Angela Merkel will host talks with Alex Tsipras, the Greek premier, in a bid to improve relations between the two nations and ensure the future of Greece within the Eurozone. The meeting comes as recent negotiations over the conditions of a Greek bailout package have divided public opinion and strained political ties. Elsewhere, the release of a series of manufacturing and home sales data this week will give investors the opportunity to gauge the health of major global economies. CPI data from the US and the UK will give clarity on the impact of low energy and food prices on inflation and the potential pace of rate hikes.
Commodities
Coffee rebounds following Brazilian Real appreciation. Coffee prices have come under significant pressure this year, falling 24% to US$1.26 per pound last week. This downward trend has been driven by healthy rainfall and a significant depreciation of the Brazilian Real. A weaker Real allows Brazilian producers to export coffee internationally at lower prices in US Dollar terms, without receiving less in their domestic currency. Last week the return of drier weather conditions and a temporary appreciation of the Real on Tuesday caused a reversal of the recent trend with coffee ending the week up 8.7%. US crude fell to a six-year low last week as stockpiles continued to accumulate and shale production showed little to no signs of slowing. US shale producers have shifted focus to rig efficiency and cost reduction to maintain output at current levels. Later in the year the curtailment of exploration spending and fall in the rig count should act to moderate US crude oil production and lift prices.
Equities
Chinese stocks cheer signs of further stimulus. On Sunday, the Chinese premier Li Keqiang pledged to shore up the economy to ensure that it meets its 7% growth target. Chinese equity markets rallied in approval, taking the statement as an indication that further stimulus measures are on their way in the form of reserve requirement reductions and interest rate cuts. The MSCI China A Index ended the week up 7.4% at an all-time high on the news. The FTSE 100 rose 3.0% in the week following the UK Chancellor of the Exchequers announcement of the 2015 pre-election budget. The budget sent energy and real estate stocks higher as the Chancellor announced measures to reduce tax on North Sea oil & gas companies and assist first time homebuyers. The EURO STOXX 50® Investable Volatility Index increased 3.6% as tensions mounted between Greece and Germany over reforms necessary in order to secure bailout funds.
Currencies
Sterling comes under pressure on inflation concerns. Following the Federal Open Market Committee meeting last week, a cautious press statement caused the Sterling to rise by 1.5% against the Dollar, the largest daily increase in five and a half years. These gains proved temporary as the Dollar recouped the prior day losses against most major currencies. Furthermore, minutes from the latest BOE meeting highlighted that consumer inflation will likely fall below zero soon and could potentially stay there if energy and food prices keep inflationary pressures at bay. Sterling is likely to continue to experience volatility in coming months, as the lack of a clear favorite in the upcoming general election and the growing popularity of parties on the fringe could lead investors to question the conviction of the British government.
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Dogecoin has outperformed other major cryptoassets over the past decade, while also exhibiting a low correlation to crypto and traditional assets. This creates a compelling argument for a portfolio allocation. We tested a Bitcoin-enhanced growth portfolio, which is a traditional 60/40 infused with 3% Bitcoin, and we introduced a modest 1% DOGE allocation. Since most prospective investors likely already hold Bitcoin, this offers a lens into how the two assets can complement each other.
Despite the small portfolio allocation, every approach delivered stronger returns. The benchmark returned 7.25% annually, while DOGE-enhanced portfolios reached as high as 8.95%. Sharpe ratios improved in almost all tests, indicating better risk-adjusted returns. Volatility did slightly tick up, but drawdowns remained largely contained. Even with no rebalancing, the max drawdown only deepened by a few percentage points, underscoring that even a 1% DOGE allocation adds meaningful punch without destabilizing the broader portfolio.
Rebalancing remains essential to capturing upside effectively. Without it, returns can plateau while risk quietly compounds. Monthly or weekly rebalancing offered the best balance, maximizing returns while keeping volatility and drawdowns in check, especially during periods of broader market stress, as we’ve recently seen. Given Dogecoin’s momentum-driven nature, a more strategic approach linked to broader crypto market cycles may offer even greater optimization beyond routine rebalancing.
With the right structure, a 1% allocation to Dogecoin isn’t reckless—it’s rewarding.
Bear Case
Despite strong fundamentals and a rich cultural legacy, Dogecoin’s recent rally, fueled by post-election memecoin mania, may have front-run its true cycle potential. As attention shifts to newer narratives, DOGE risks being seen as ’yesterday’s play,’ potentially underperforming even in a rising market. Still, that wouldn’t signal a flaw in its model, just a pause in a fast-rotating cycle.
Assuming a continued 10% compounded annual growth rate (CAGR) from its 2021 peak of $0.73, DOGE would be projected to land around $0.38 by 2025—still more than 2x from today’s levels but modest relative to past cycles. More notably, this would mark the first time Dogecoin fails to reach a new all-time high in a full market cycle.
Neutral Case
Dogecoin may not dominate headlines like it did at its peak, but it still holds cultural relevance and widespread recognition. In a scenario where the total crypto market cap peaks at $5 trillion this cycle and DOGE maintains a solid, albeit slightly reduced, market share of 3% instead of its previous 4%, this would result in a market capitalization of approximately $150 billion for DOGE.
At that valuation, DOGE would trade near $1 per coin, a ~5.5x gain from current levels around $0.185. This neutral case assumes Dogecoin retains its stature as the leading memecoin, despite increased competition, with stable adoption and renewed retail interest, but without the same euphoria of the last cycle.
Bull Case
If we take DOGE’s bottom price of $0.007 just before the last bull run began and fast-forward two years to the bottom of the current cycle at $0.0585, that move reflects a CAGR of 189%. If DOGE were to mirror this explosive growth, DOGE would reach approximately $1.42.
In this scenario, Dogecoin benefits from renewed memecoin mania, increasing real-world adoption, and stronger interest fueled by regulatory clarity and potential integration with major platforms like Elon Musk’s X. A full return of retail enthusiasm and broad cultural momentum could reestablish DOGE as the breakout asset of the cycle, potentially even doubling its all-time high.
Research Newsletter
Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com
Disclaimer
The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.
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