Meme stocks like GameStop and AMC are hot again - what it means for meme coins

By Frances Yue

Hello! Welcome back to Distributed Ledger. This is Frances Yue, crypto reporter at MarketWatch.

This week, we've witnessed the rally of several meme stocks such as GameStop (GME) and AMC (AMC), after Roaring Kitty, or investor Keith Gill - a pivotal figure in the GameStop trading frenzy back in 2021 - returned to X on Sunday to make his first social-media post in three years.

GameStop's shares touched as high as $64.82 on Tuesday, after closing last Friday at $17.46. It made for a 271% gain, before pulling back.

Read: GameStop in 2024: Another meme-stock bubble or did apes never leave?

Built on such enthusiasm, a cryptocurrency also called GameStop, which uses the videogame retailer's name and logo despite not having any affiliation with the company, rose 3,800% in three days, according to data from CoinGecko.

Another crypto called Roaring Kitty rose over 6,000% in two days, before falling 85% from its peak on Wednesday.

"I think if you look at crypto and meme stocks, there is a lot of overlap in trading," according to Pat Doyle, Blockchain Researcher at Amberdata. Narratives and investors' attention often have an outsized impact on the trading of such assets, Doyle said.

Still, is there more that the meme-stocks rally implies? Have retail interests totally returned to the market? What does it mean for crypto broadly? Find me on X to share your thoughts.

Also, don't forget to tune in to Barron's roundtable next week, with a focus on the outlook for crypto.

What about meme coins?

Some meme coins have already had their moments earlier this year. In the past few months, several Solana-based meme coins such as Bonk, dogwifhat, Doland Tremp and Jeo Boden surged, but have since fallen over 50% from their highs.

Most crypto-industry participants I've spoken to think the retail interests are returning to the market, but are still way below the levels in 2021, when meme coins such as DogeCoin and Shiba Inu peaked and were in the spotlight.

After all, the situation has changed - we are no longer at the zenith of the COVID-19 pandemic, interest rates are at a 23-year high, while inflation remains sticky.

The meme stocks' rally this week signifies increased risk appetite across the market, but was specifically a response to the return of Roaring Kitty, according to Steven Lubka, head of private clients and family offices at Swan bitcoin. "I think the rally is relatively isolated, and I don't think it spills over too much," Lubka said in a phone interview.

Crypto has evolved over time and has become more related to the macroeconomic conditions, Amberdata's Doyle added. Other than the memecoins GME and Roaring Kitty, most major crypto remained stable over the past few days, noted Doyle.

Who's buying bitcoin ETFs?

Investment firms have been filing their 13-F quarterly reports with the U.S. Securities and Exchange Commission, disclosing their equity holdings during the first quarter. It sheds more light on the identity of the investors in bitcoin (BTCUSD) ETFs.

Among all the investment managers, the state of Wisconsin is an especially notable one, signaling pension funds' interests in bitcoin ETFs. The State of Wisconsin Investment Board opened new bets in BlackRock's iShares Bitcoin Trust IBITand Grayscale Bitcoin Trust GBTC during the first quarter, according to its 13-F filing with the SEC.

The pension fund, which manages assets of the Wisconsin retirement system, held about 2.5 million shares of the BlackRock iShares Bitcoin Trust as of March 31, a recent filing shows. The shares were worth $99.2 million at that time. The pension fund also held about 1 million shares of Grayscale Bitcoin Trust as of March 31, which were valued at about $64 million then.

A representative at the pension fund didn't respond to a request seeking comment.

Some other holders of bitcoin ETFs include Boston-based hedge fund Bracebridge Capital, Kansas-based United Capital, Hong Kong-based Yong Rong HK Asset Management and Canada's Bank of Montreal.

Crypto in a snap

Bitcoin has risen 5.4% over the past seven days, while ether (ETHUSD) has edged up 2.4% during the same period, according to Dow Jones Market Data.

Must-reads

Ether ETFs are unlikely to arrive this month. Get ready for more legal battles ahead. (MarketWatch)Opinion: Why bitcoin and gold might be your move to keep your wealth safe (MarketWatch)Democratic congressman warns crypto may become winning issue for GOP after Trump voices support (MarketWatch)

-Frances Yue

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05-15-24 1721ET

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