- GameStop and AMC saw surges and declines, prompting discussions on market behavior.
- Memecoins may surpass meme stocks due to perceived advantages.
As an experienced analyst, I’ve witnessed firsthand the rollercoaster ride that is the crypto and stock markets. The recent developments surrounding GameStop (GME) and AMC Entertainment Holdings Inc. (AMC) have been particularly intriguing, with their surges and subsequent declines prompting intense debates among investors and analysts alike.
The surge of GameStop’s price, fueled by the revival of Roaring Kitty and its association with Solana’s memecoin GME (SOL), was brief and has since resulted in losses for investors.
According to CoinMarketCap, GME saw a notable decline of 29.51% in the past 24 hours.
Moreover, TradingView data indicates a 5.17% drop for AMC Entertainment Holdings Inc. (AMC).
The significant advancements in question have ignited passionate discussions amongst investors and financial experts. Notably, the extraordinary price surges of 75% for GameStop (GME) and 89% for AMC on May 15th have been major topics of debate.
Why are the execs disappointed?
In a recent interview on “The Chopping Block” podcast, Robert Leshner, CEO of Superstate, shared his perspectives on the topic at hand.
It’s unfortunate for hedge funds and individual investors who had bet against GameStop and AMC shares. The recent market behavior towards these stocks was anything but rational and efficient, making it a challenging situation for those with opposing positions.
In addition to the letdown, Former SEC Chair Jay Clayton shared his perspective on the matter during an interview with CNBC.
I have strong reservations about this practice for several reasons. Firstly, it bears more resemblance to gambling than traditional trading. Secondly, it falls short of the definition of investing.
Shocking social media trends
As a crypto investor, I find myself pondering over the fact that this narrative does not conclude there. The query arises in my mind as to how a single tweet could exert such a substantial impact on the market’s ebb and flow.
Replying to the above concerns, Leshner said,
“The power of a meme on Twitter to significantly increase a stock’s value from $15 to $80 within just two trading days serves as a reminder of the unpredictable and often irrational nature of financial markets, which is cause for concern.”
Reflecting similar opinions, Clayton added,
Over the past five years, we’ve come to understand that a tweet should not be considered as investment advice.
As a researcher examining this issue, I’ve noticed that there is a great deal of debate among analysts regarding the likelihood of investors continuing to hold their shares or being delisted due to allegations of market manipulation.
The future still looks bright for memecoins
Despite such FUD (Fear, Uncertainty, and Doubt), Tom Schmidt, partner at Dragonfly added,
“In the memecoin marketplace, transactions proceed smoothly without interruption from a circuit breaker. You have constant access to log in and participate without the risk of being barred.”
Echoing a similar sentiment, Haseeb Qureshi, Managing Partner at Dragonfly, noted,
“Eventually, the preference for trading memecoins over meme stocks may become more widespread as memecoins offer certain advantages.”
As an analyst, I’ve examined the data from CoinGecko, and it supports my observation that the meme market currently boasts a capitalization value of approximately $57.5 billion. Additionally, this figure reflects a minor fluctuation of around 3.4% in the past twenty-four hours.
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2024-05-19 00:08