- GameStop stock is rising, triggering expectations of a 2021 repeat.
- Crypto memecoins are moving in tandem with GME’s surge.
- Some are warning that GameStop’s revival is a pump and dump in the making.
The GameStop short squeeze of January 2021 was an inflection point that captured the world’s attention. Sparked by user posts on Reddit, a coordinated effort by retail traders to buy up shares of the struggling video game retailer triggered a mind-boggling 2,400% surge in the stock over a month, with the price peaking at $121.
The David vs. Goliath narrative spun a moment of people’s power defeating the greedy, immoral Wall Street hedge funds that had been massively shorting GameStop. This movement spilled over into crypto, with Dogecoin benefiting from a whopping 8,200% jump to an all-time high of $0.74. With GameStop stock stirring again, memecoin investors wonder if history will repeat itself.
Memecoins Enjoy Boost
Memecoins are riding high in tandem with GameStop’s unexpected stock price revival, prompting expectations of a repeat of the frenzy witnessed in 2021. Over the last 24 hours, the total memecoin market capitalization grew 7.4% to $54.5 billion.
The top three memecoins showed modest gains, with Dogecoin and Shiba Inu up 4.5% and 1.1%, respectively, except for Pepe, which recorded a huge 21.8% increase in price over the period.
However, the top-performing memecoin was GME, growing 270% to $0.01147 over the past day. GME is a Solana-based token that is not associated with the GameStop company. Instead, GME “pays homage to the GameStop saga anniversary” and plays on the David vs. Goliath narrative to show “we can stand up to the big guys together.”
Commenting on current market dynamics, investor Satoshi Stacker wondered whether memecoins are primed to explode in parallel with GameStop stock. X influencer “intuitio” seemed to think so, stating that the rising GameStop stock price signals that people’s power is readying to battle “men in suits with resources” once more.
With GameStop stock recording a massive jump since May, both stock and crypto markets are poised for action.
GameStop Manipulation?
GameStop stock has seen a massive 250% trough-to-peak jump since the start of May, recording a 91-week high of $38.32 on Monday. The pre-market trading price is currently above Monday’s close at $42.47, indicating a wave of eager buying is underway, fueled by heavy media coverage of GameStop’s unexpected revival.
Helping fuel the frenzy, Keith Gill, known as “Roaring Kitty” and an instrumental figure rallying investors during the 2021 mania, reactivated his long-dormant Twitter account on Monday after a nearly 3-year hiatus. He posted a picture of a man leaning forward intently and has been tweeting regularly since.
However, not everyone is buying the people’s power narrative. X influencer Gary Gensler (Parody) warned that corporate interests are likely behind the scenes manipulating investors into another “pump and dump” scheme of GameStop stock. Gary Gensler (Parody) cautioned not to “fall for it,” urging his followers to seek professional financial advice over internet randoms.
Trader “HORSE” took a similarly skeptical approach to Gary Gensler (Paradoy), predicting that the GME hype would soon die down, which he based on the lack of short interest compared to the levels seen in 2021.
On the Flipside
- The strength of Dogecoin‘s move in 2021 created a flood of copycat clones and kicked off memecoins as a recognized category of cryptocurrency.
- An SEC report in the 2021 GME frenzy found that many hedge funds were long, contradicting what was reported in the media.
- Over 1,300 memecoins now exist, meaning a repeat of Dogecoin‘s unreal 2021 performance is harder to achieve as capital is spread thinner.
- GameStop cut staff and crypto projects in December 2022.
Why This Matters
Beyond the stirring memecoin-GameStop hype is the issue of market manipulation and retail investors being set up for a fall. While it’s still in the early stages, with the potential for a 2021 repeat, it should be clear that participating in the hopes of timing the top is a high-risk strategy.
Raj Gokal dismisses claims memecoins are a net negative for the industry:
Solana Founder Sneers at Claims of Memecoin Scaring Builders
Paolo Ardoino responds to rumors that the SEC is coming for Tether:
Tether CEO Dismisses SEC Probe Rumors as Malicious FUD
