The recent surge in unofficial GameStop memecoins, alongside the rise in GameStop’s (GME) share price, has left crypto traders unimpressed. This spike in activity comes amid a generally sluggish market, with many investors looking for any sign of hope.
Several traders have weighed in on the phenomenon, indicating that this excitement may be more about boredom and misplaced capital than genuine market confidence.
The Solana-based memecoin GameStop (GME), which has no official ties to the company, saw an astounding 2,727% increase in the last two days. This coincided with GameStop’s stock price rising by 204.50%, according to Google Finance data.
This dramatic uptick followed a post by Keith Gill, known as Roaring Kitty, on his X account on May 12. Gill, a famous GameStop stock trader, had been absent from social media since June 2021 but returned with a cryptic meme, signaling his comeback.
Memecoins Riding the GameStop Wave
Roaring Kitty’s return sparked a frenzy among traders, yet this enthusiasm seems more about chasing short-term gains than a belief in the market’s overall strength.
Among the top 100 cryptocurrencies, only PEPE and Floki showed significant gains, rising by 35.73% and 11.27%, respectively. In contrast, Dogecoin (DOGE) and Shiba Inu (SHIB) experienced brief spikes but have since retraced by 1.76% and 1.39%.
This pattern suggests traders are more interested in specific narratives rather than the broader market. As the market remains quiet, investors are overreacting to events like the GameStop surge.
This sentiment was echoed by Ed Hindi, Tyr Capital’s chief investment officer, who noted that the excitement around GameStop memecoins highlights the presence of unallocated capital.
Meanwhile, the overall market sentiment has declined over the past 30 days, with the Fear and Greed Index dropping by about 10 points to a “Greed” score of 64 as of May 15. This decline reflects the broader uncertainty and lack of a clear narrative driving the market.
Daan Crypto Trades, a pseudonymous crypto trader, believes the GameStop price surge reassured crypto traders that related memecoins might follow suit.
According to Daan, people often create narratives to explain price movements, and the memory of the 2021 GameStop saga still influences many traders.
The Need for a New Crypto Narrative
While some believe the market needs a new narrative, others argue that there are already plenty of stories to follow. Patrick Scott, founder of Dynamo DeFi, points to the growth of tokenized real-world assets, which have surged from being nearly nonexistent to billions of dollars in recent years.
He also highlights the activity on the Solana blockchain and the rise of Decentralized Physical Infrastructure Networks (DePIN), which bring non-speculative revenue into the crypto space.
However, despite these emerging trends, the market’s overall sentiment remains tepid. Many traders seem to be grasping at short-term opportunities rather than investing based on long-term fundamentals.
This behavior was evident during the GameStop frenzy, where amateur traders drove the stock price from roughly $1 at the start of 2020 to over $80 by late January 2021. Keith Gill, who had bought thousands of shares at the bottom, made millions as these traders waged a war against short sellers.
GameStop investors aimed to flip the bets of hedge funds that had shorted the company, driving the stock price high enough to force steep losses for those betting against it.
