GameStop launched the 2021 memecoin rally
Crypto News– The sudden and unexpected return of Keith Gill — the man widely credited with kicking off the 2021 GameStop short squeeze — has speculators asking one question: Are we in for GameStop 2.0?Many are hopeful, but at least one analyst has his doubts.
Remembering the GameStop Saga
Gill was at the center of the GameStop saga during the pandemic, which saw Reddit traders flip the table on hedge funds that had been making money shorting what they believed to be a failing brick-and-mortar game store — which ended up sending the price of GME soaring over 1,000% in under a month.
Ripple Effects in the Crypto World
Some also believe the GameStop short squeeze laid the groundwork for a massive surge in the price of memecoins such as Dogecoin (DOGE) and Shiba Inu (SHIB) after retail turned its attention elsewhere.
Gill went dark on social media on June 19, 2021, but returned after a nearly three-year hiatus on May 13, posting a typically cryptic meme of a gamer sitting up in their chair to announce his comeback.
Immediate Market Response
In the 24 hours following Gill’s return to X, shares of GameStop rallied as much as 111%, while DOGE and SHIB gained 6.2% and 5.4% respectively in the same time frame.
One analyst remains skeptical
However, eToro market analyst Josh Gilbert mentioned to Cointelegraph that it likely won’t be as straightforward this time around.
I think it will certainly ignite some short-term moves from these assets, but it’s hard to see any longevity, The environment is just not comparable to 2021, when interest rates were at rock bottom, governments were providing fiscal stimulus globally, and major economies had little to no inflation.
Josh Gilbert
Additionally, Gilbert pointed out that the number of outstanding shorts on assets like GameStop is much smaller compared to 2021. This means that the potential for a significant upward move is likely reduced.
Several GameStop-related memecoins, including one named GameStop (GME) — which has no official affiliation with the company — experienced massive spikes amid the unfolding drama. According to Birdeye data, the GME memecoin surged more than 3,650% in a single day.
FAQs
How did GameStop launch the 2021 memecoin bull market?
GameStop’s short squeeze in early 2021, driven by a surge of retail investors from platforms like Reddit, dramatically increased the stock’s price by over 1,000% in under a month. This event garnered significant media attention and inspired retail investors to look for other high-risk, high-reward opportunities, including memecoins like Dogecoin (DOGE) and Shiba Inu (SHIB). The excitement and speculative frenzy around GameStop helped fuel interest and investments in these memecoins, leading to their massive price increases.
What are memecoins?
Memecoins are a type of cryptocurrency that originated from internet memes and jokes. Unlike traditional cryptocurrencies like Bitcoin and Ethereum, which are designed with specific technical purposes and use cases in mind, memecoins often have little to no inherent value or utility beyond their popularity as a joke or viral trend. Examples include Dogecoin (DOGE) and Shiba Inu (SHIB), both of which gained popularity due to their strong community following and social media buzz.
Could history repeat with another GameStop-driven memecoin bull market?
While it’s possible, it may not be as straightforward this time around. Market conditions, investor sentiment, and the number of outstanding shorts on GameStop and similar assets have changed since 2021. According to eToro market analyst Josh Gilbert, the potential for a significant upward move is likely reduced due to the smaller number of outstanding shorts compared to the situation in 2021.
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