GameStop's stock drama has had a galvanizing effect on stocks, bitcoin, and even dogecoin.
Bitcoin has rebounded after Wednesday’s steep However, traders and analysts are not sure whether the rebound is sustainable, Speculation was proved likey it was the result of GameStop’s stock drama.
At the press time, bitcoin’s price was at $32,817.11, up 4.49% in the past 24 hours.
“What I'm seeing today is indeed a trend upwards,” Alessandro Andreotti, an over-the-counter crypto trader, said. “But it's still too early to call whether this is a return to a bullish cycle or not.”
The current crypto market seems to be distracted by the ongoing GameStop situation, where a group of Redditors on a board called “Wall Street Bets” (WSB) sent GameStop shares (NYSE: GME) skyrocketing in order to squeeze hedge funds that were betting against the video game retailer and its stock.
The effect of GameStop on crypto is hard to ignore, according to traders, and the price for meme-centered crypto dogecoin (DOGE) nearly doubled in the past 24 hours. Simons Chen, executive director of investment and trading at Hong Kong-based crypto lender Babel Finance, told CoinDesk GME’s stock movement has led to a general “fear of missing out” (FOMO) impact on retail traders in the U.S.
Stocks rallied after markets opened Thursday morning, reversing losses from Wednesday’s sell-off.
A Twitter account calling itself the “WSB Chairman,” which has about 485,000 followers though not associated with the Reddit group, posted several tweets Wednesday night about bitcoin and dogecoin.
The Reddit-based trading community "seems to be looking for the next ‘meme stock,’” Andreotti said. “And many of them landed on dogecoin, for example, which is up near 200% in the last 24 hours, [the] best performing crypto of the day.”
At the time of writing, most of the cryptocurrencies on the CoinDesk 20 were rising, with 0x (ZRX), ethereum classic (ETC) and cosmos (ATOM) are among those with the most significant gains.
Investors who bought the digital coin a year ago are still sitting on gains exceeding 300%. Pinpointing who is mainly responsible for the rally is one of the many crypto mysteries -- Bitcoin funds, momentum chasers, billionaires, day traders, companies and even institutional investors have all been cited.