GameStop sparked the 2021 memecoin bull run — will history repeat itself?

GameStop 2.0: Is Keith Gill's Return a Catalyst for Retail Mania?

The unexpected reappearance of Keith Gill, the individual widely credited with igniting the 2021 GameStop short squeeze, has sparked speculation about a potential "GameStop 2.0."

Gill's Return and Its Impact

During the pandemic, Gill played a pivotal role in the GameStop saga, where Reddit traders defied hedge funds by driving up the stock price of a seemingly failing brick-and-mortar game store. This surge resulted in a staggering 1,000% increase in GME's value within a month.

Some believe that the GameStop short squeeze paved the way for the subsequent surge in memecoins like Dogecoin (DOGE) and Shiba Inu (SHIB) as retail investors shifted their focus.

Gill's social media hiatus ended on May 13, 2023, after nearly three years, with a cryptic meme announcing his return. In the 24 hours following his reappearance, GameStop shares surged by 111%, while DOGE and SHIB gained 6.2% and 5.4%, respectively.

Analyst's Caution

Despite the initial enthusiasm, eToro market analyst Josh Gilbert expresses skepticism about a similar retail frenzy this time around.

"While it may spark short-term movements in these assets, it's unlikely to have lasting effects," he says.

Gilbert notes that the outstanding shorts on assets like GameStop are significantly lower than in 2021, limiting the potential for a major upside move.

Furthermore, he highlights the current economic environment, which is characterized by higher interest rates, a global cost of living crisis, and reduced consumer spending capacity, as factors that could dampen the impact of retail mania.

Crypto Enthusiasts' Optimism

Crypto enthusiasts remain bullish, citing Robinhood's recent integration with decentralized exchange UniSwap. They anticipate that this will facilitate a new wave of GameStop investors purchasing memecoins and other cryptocurrencies through the app.

"The Roaring Kitty army will undoubtedly buy these assets," says pseudonymous trader Travis.

Conclusion

While Gilbert cautions against excessive optimism, he acknowledges the unpredictability of the market. The 14.5 million users of WallStreetBets have demonstrated that anything is possible.

Amid the unfolding drama, several GameStop-related memecoins, including one named GameStop (GME), have experienced massive spikes.