Author: Zoltan Vardai, Cointelegraph; Compiler: Baishui, Golden Finance
GameStop stock price exceeded Bitcoin's annual return in one day. Will part of the profits enter the altcoin market, similar to previous bull cycles?
According to TradingView, on the yearly chart, GameStop stock's return increased by more than 154%, while Bitcoin's annual return exceeded 129%.
Source: TradingView
Most of GameStop's returns have been concentrated in the past two days, with GameStop's price rising by more than 105% as of 2:35 PM UTC on May 14.
Keith Gill, widely regarded as the instigator of the 2021 GameStop short squeeze, saw GameStop's price rise starting on May 13 after his unexpected return to social media after a nearly three-year hiatus.
Source: TradingView
Gill was at the center of the GameStop saga during the pandemic, as retail traders overwhelmed hedge funds that were shorting the stock. The craze led to a monthly gain of more than 1,000% for GameStop shares.
In the 24 hours following Gil's return to X, GameStop's stock price rose 111%, while Dogecoin and Shiba Inucoin rose 6.2% and 5.4% respectively in the same time frame.
Considering that the altcoin rally was triggered shortly after the GameStop short squeeze in the 2021 cycle, The return of the GameStop legend has ignited new hope for altcoins.
According to a May 14 post by cryptocurrency analyst CryptoAmsterdam, the 2021 altcoin rally was catalyzed immediately after the GameStop rally, based on historical chart patterns:
“The blue on the left is the 2021 GME rally and top. The blue on the right is the trend of altcoins after that event. Money is always flowing.”
Source: CryptoAmsterdam
CryptoAmsterdam The post notes that the current market cap of altcoins is also similar to the situation that catalyzed the altcoin bull cycle in 2021, citing the following chart.
Source: CryptoAmsterdam
The potential rebound is consistent with analysis by Rekt Capital, which expects altcoins to bottom out around early June, before the start of the altcoin season. Rekt Capital wrote in a May 8 post:
“Altcoins are following the plan perfectly. Altcoins bottomed in early February. Altcoins sold off during the Bitcoin halving. Going forward, altcoins will bottom in early summer.”
Altcoin hype cycle. Source: Rekt Capital
While most altcoins have yet to react to GameStop’s rally, some meme coins have gained momentum from the saga. On May 13, a day after Gil returned to social media, Pepe hit an all-time high of more than $0.000010.
Today’s investing environment is different, however, and eToro market analyst Josh Gilbert said that short positions on GameStop are much smaller than in 2021, which could significantly curb the “size of the rally.”
“The environment now is not comparable to 2021, when interest rates were at rock-bottom levels, governments were providing fiscal stimulus around the world, and there was virtually no inflation in major economies,” Gilbert noted.
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