GME and AMC stock surge may impact crypto meme coins, BTC not so much?

This year, stocks such as Chinese cinema AMC Entertainment and video game retailer GameStop (GME) were the vehicle for individual retailers to show their disapproval of the so-called “free market”.

Beginning in late January and driven by a sense of Reddit communities like r / Wallstreetbets, these self-shares have seen tremendous growth this year. GameStop showed 1,069.80% yields so far, while AMC showed 1,919.34% gains. At this rate, they should have 2,440% and 4,378% returns per year respectively.

Around the same time, Bitcoin (BTC) ventured beyond the $ 50,000 mark for the first time after the now infamous short-term pressure GME and Tesla’s purchase of BTC is worth $ 1.5 billion. While BTC’s price momentum continued to reach its all-time high of $ 64,889 on April 14, it fell sharply to reach its pre-January growth levels of about $ 35,000 at the time of writing.

GameStop / AMC correlation with BTC unclear

On June 1, the AMC shares began to rally again, more than double value in one day. The stock rose by nearly $ 30 to reach a high of $ 65.57 in the midday trading session on June 2nd. BTC also saw a small rebound from the sub- $ 35,000 levels on the same day to reach the $ 38,600 range on June 3rd. Since meme stocks and cryptocurrencies often trade only in terms of market sentiment and seemingly correlated in the past in their upward movement, it is important to assess the correlation between the two, if at all.

Martin Gaspar, a research analyst at CrossTower – a digital stock exchange – told Cointelegraph, “There doesn’t seem to be a big correlation between GME / AMC stock price and Bitcoin price. In the brief pressure we saw earlier this year , the price increase of GameStop and BTC was probably accidental. “

On AMC’s prospects in the near future, he added, “AMC could very well be the new GameStop. Stock forums and memes online show that many retailers seem to believe in AMC, despite its high price relative to basic items.”

Due to the recent self-loathing for AMC, the company even got it upgrade in credit rating. According to analysts at S&P Global Ratings, the firm has a lower chance of defaulting after it takes advantage of the self-fury by raising money in the stock markets. It sold 11.55 million shares at an average price of $ 50.85. Although the company’s bonds are classified in the most speculative category of bonds, fairly close to companies that do not perform or are almost non-performing, S&P has upgraded its rating to CCC +, which is two levels above its previous levels and seven levels below investment grade. – te, BBB-.

Adding to the correlation aspect, Gaspar also commented, “We’ve also seen more recently that the price of BTC has weakened as AMC has grown, further underscoring this relationship.”

The existence of the correlation between GME / AMC shares is often difficult to concretely prove due to the essentially unstable nature of the cryptocurrency markets. Johnny Lyu, CEO of KuCoin – a cryptocurrency exchange – told Cointelegraph:

“There are only similarities between these assets for traders who know how to profit from high-risk trades that include Bitcoin, under pressure from regulators and influencers and assets that presumably had no real prospects. Fluctuations in the price of both Bitcoin and stock memes are well known to the old people of the crypto market – pump-and-dump in action. “

Shares of AMC grew 95.22% on June 2 to reach $ 62.55. Following the announcement of the sale of 11.55 million shares, the share price fell by 17.92%. This, along with the fluctuations seen on GameStop earlier in the year, is proof that any scenario is possible with these provisions due to missing fundamentals and information spreading on Reddit.

Although, Jim Cramer, host of CNBC Crazy Money, indicated that this may be the right time to get into GameStop and AMC, though he warned that “if you raised them from much lower levels, get a little off the table. These stories could always be misleading.”

So Kwon, co-founder of Terra – a protocol for reliable stablecoins – deepened the relationship between Reddit and these stores, telling Cointelegraph, “Both [GME and AMC] reflect the retailer’s consternation with the current HFT [high-frequency trading] officials and asymmetries of the world TradFi. “He added further:” It would not be surprising to see this continuously happen to other activities in the future, especially as social networks and the way people organize and interact online evolve. “

Speaking of stocks with well-established correlations with Bitcoin, MicroStrategy (MSTR) is the first stock that comes to mind because of the large Bitcoin reserves it has, along with the high bullish attitude of its CEO and founder, Michael Saylor. The company has 92,079 BTC valued at more than $ 3.4 billion, representing 0.43% of the token’s maximum supply of $ 21 million.

Related: Bitcoin stocks: JPMorgan offers BTC exposure, ETF in sheep clothing

The firm was one of the first publicly traded companies to add Bitcoin to its balance sheet and was also considered a substitute for BTC by investors in the traditional financial markets. Lyu further said, “The shares of companies that own Bitcoin depend on its value. MicroStrategy lost up to 10% during the week; Bitcoin lost the same amount. It’s okay when you have 90,000 BTC.”

In fact, MicroStrategy is included in JPMorgan’s Crypto Exposure Basket (CEB), which is a debt instrument portfolio consisting of 11 unequally distributed shares. These shares are either issued by the companies that hold BTC in their books as a treasury asset, or related to the cryptocurrency in an auxiliary manner.

In addition to MicroStrategy, which owns 20% of the total allotment, CEB also has shares of Square, PayPal, Nvidia Corporation, Riot Blockchain, Advanced Micro Devices, Taiwan Semiconductor Manufacturing Company Ltd, Intercontinental Exchange, CME Group, Overstock.com and Silvergate Capital Corporation. Gaspar further spoke about the performance of the CEB compared to BTC:

“JP Morgan’s Cryptographic Exposure Basket has probably performed better than BTC, as this basket includes companies that are not purebred cryptocurrency companies. This isolates investors from the movements in BTC. Nvidia, one of the companies included in this that basket, is currently at peak times, while BTC has declined by about 45%. “

Self-action phenomenon to drive self coins

On the effect of the self-stock phenomenon on the main cryptocurrency in BTC, it remains unclear due to some of the movements that look seemingly coincidental. However it could be a precursor to another meme-currency rally similar to the performance of Dogecoin (DOGE) and Shiba Inu (SHIB) earlier this May, as Gaspar said, “There is speculation among traders that meme-currencies could be positioned for gather after the crypto market regains its base. “

It’s important that the communities that pushed the stocks themselves to such levels are also behind the GameStop and AMC stocks. According to Kwon, “What’s interesting is that the foundations for GameStop, AMC and DOGE are completely empty within their relative markets, but they represent a new kind of social Schelling point that is a manifestation of a dismayed investor with current limitations in the current system. . ”

Related: Does everyone acclaim the Shiba? Rise of Dogecoin suitors prompted by self-fury

However self-currency backed by a motivated and decentralized community of internet promoters is growing as self after a certain point, as seen in the case of Dogecoin.

It is very likely that once these self-stocks are saturated with demand, some part of this demand has a high chance of flowing into high currencies, more specifically, self-currencies. Especially with trading platforms like Robinhood, retailers are crowding the site looking for a quick profit and laughing with their friends during that time.