Can Bitcoin Be The Next GameStop? The Word On The Street

The Reddit retail investor crowd that pushed up stocks of GameStop Corp GME, AMC Entertainment Holdings Inc AMC, and others could next set their sights on the world’s largest cryptocurrency by market cap — Bitcoin (BTC).

Bit Of A Laggard: The apex cryptocurrency has remained largely muted and has failed to hitch a ride on the retail rocket that has lifted other cryptocurrencies such as XRP (XRP) and Dogecoin (DOGE) lately.

The so-called digital gold has been lackluster even in comparison with silver, which peaked to new highs over Monday. The lack of movement in Bitcoin is despite the fact that Tesla Inc TSLA CEO Elon Musk expressed support for the coin on Monday. Previously, Musk’s utterances had sent DOGE and BTC soaring — the former skyrocketing an impressive 800%.

Bets On Bitcoin: Musk’s previous utterances have not gone unnoticed on r/WallStreetBets.

Papa Elon has spoken from r/wallstreetbets

Elon musk pushes uncenosorable money (again) from r/wallstreetbets

Short Change: There are parallels between the GameStop saga and Bitcoin, according to CNBC. Data from The Block Crypto indicates that hedge funds are short on the apex coin by over $1 billion. 

The shorting picked up speed around October last year which coincides with the uptick in Bitcoin price. The cryptocurrency reached its all-time high of $41,941.56 on Jan. 8. 

At the same time, retail interest in cryptocurrencies has remained strong, with Robinhood having to shut off some cryptocurrency trading features as DOGE soared. The brokerage also restricted buying of GameStop and other shares amid the retail frenzy. 

The Long and Short Of It: WallStreetBets has spurred conversation among Bitcoin enthusiasts of a similar short squeeze rally in the cryptocurrency.

If you don’t own #bitcoin right now, your position is long USD shitcoin and short bitcoin. Think about that for a moment.

— Tyler Winklevoss (@tyler) September 7, 2020

Bitcoin Archive, which claims to track the cryptocurrency as it proves every prediction of “doom” wrong, tweeted that while GameStop squeezed hedge funds, Bitcoin is squeezing central banks.

The short squeeze on GameStop is exactly what’s coming to #Bitcoin.
Almost $500m of #BTC was moved off Coinbase last night. These big movements tend to happen just before massive price movements.  pic.twitter.com/jKxxr527ua

— Bitcoin Archive (@BTC_Archive) February 1, 2021

Price Action: Bitcoin traded 0.81% higher at $33,914.18 at press time. Grayscale Bitcoin Trust GBTC closed 2.13% lower at $33.95 on Monday.

Benzinga’s Take: The recent volatility in the price of BTC and other cryptocurrencies like DOGE and XRP should act as a caution to investors. The rallies in both the cryptocurrencies were short-lived. The ride on the pump and dump rollercoaster is perilous and investors should be wary of timing the market.