As a researcher with experience in financial markets and meme culture, I find the sudden return of Keith Gill to social media intriguing, given his past role in the GameStop short squeeze saga. The excitement among speculators about a potential repeat of the 2021 event is palpable, but as an objective analyst, I must consider both sides of the argument.
The unexpected reappearance of Keith Gill, known as the instigator of the 2021 GameStop short squeeze, has sparked curiosity among investors: Could another GameStop event unfold?
Many are hopeful, but at least one analyst has his doubts.
I was deeply involved in the GameStop phenomenon during the pandemic, an event that saw Reddit users turn the tables on hedge funds who had profited from shorting the stock of what seemed to be a struggling brick-and-mortar game store. The unexpected surge in buying pressure led to an unprecedented rise in the price of GME, soaring over 1,000% within just a few weeks.
Some people argue that the GameStop short squeeze paved the way for a significant increase in the value of meme tokens like Dogecoin (DOGE) and Shiba Inu (SHIB), as the focus of retail investors shifted elsewhere after that event.
On June 19, 2021, Gill disappeared from social media, leaving no trace for almost three years. However, on May 13, 2024, he suddenly reappeared and shared a classic gamer meme of someone seated at their desk with an excited expression to signal his return.
After Gil’s arrival back in X within a day, GameStop stocks surged up to 111% increase, whereas DOGE and SHIB experienced gains of 6.2% and 5.4% respectively during this period.
Crypto supporters are eagerly anticipating that Gill’s comeback could ignite a comparable retail frenzy among them.
One analyst isn’t so bullish
Josh Gilbert, market analyst at eToro, shared his perspective with CryptoMoon, expressing doubt that things will be as simple this time.
He expressed his belief that this development could spark some brief reactions from these investments, but it’s uncertain if there will be any lasting impact.
Furthermore, according to Gilbert’s observation, the noteworthy short positions on assets such as GameStop had shrunk significantly compared to the previous year. Consequently, he anticipated that any potential price surge would also be less substantial.
“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.”
In the US, we currently have an interest rate of 5.5%, while the world is experiencing a significant cost of living crisis. This means that consumers’ financial situations are likely to be vastly different than they were in 2021. Consequently, their financial choices will be heavily influenced by these new realities.
Crypto enthusiasts offered a more simple thesis for their bullishness.
Travis, with a recent indication of collaboration between Robinhood and decentralized exchange UniSwap, opined that a fresh surge of GameStop enthusiasts might begin purchasing memcoins and various cryptocurrencies via this application.
“Just a reminder you can trade memes on Robinhood now. You think the Roaring Kitty army isn’t going to buy these things?”
As a researcher, I’ve come across Gilbert’s perspective that investors have become wiser to the signs of speculative rallies. Nowadays, they approach the markets with increased vigilance and caution.
“Given the significant changes since 2021, I believe a repeat of that rally is unlikely,” he remarked.
“That said, the 14.5 million users on WallStreetBets have shown in the last few years that anything is possible.”
In recent events, various mem coins associated with GameStop, such as the coin named GameStop (GME), experienced significant surges in value. Notably, GME saw an astonishing increase of over 3,650% in a single day based on Birdeye’s data.
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2024-05-14 06:30