Memecoins
A Major Bearish Trader Breaks Out of GameStop Shorts But Compares GME to Meme Coins: Is This Fair?
GameStop shares may fall after a roller-coaster ride, but Citron Research, led by Andrew Left, is exiting its short position on the video game retailer. In a post on X, Citron Research She said was exiting its short position, saying the platform now has “enough runway” following the $4 billion liquidity injection.
Citron Research Exits GameStop Shorts and Compares GME to Meme Coins
However, even if Citron Research and Left agree to accept the loss, they seem to believe that even with the billions, GameStop won’t last, and the gain was just hype-induced.
Specifically, Citron Research acknowledged the irrationality of the market, citing Dogecoin’s massive mega valuation. At spot rates, CoinMarketCap data shows that Dogecoin is the most valuable meme coin, with a market capitalization of over $20 billion.
The researcher maintains a bearish view on GameStop, believing its financials are deteriorating, a stance that justified his initial short position.
Even so, there is the potential for another retail investor-led rally, as often seen in meme coins boom, pushed Citron to cut losses. In 2021, Citron Research was forced to cut losses as GameStop stock prices soared.
However, news of Citron Research exiting their short positions in GameStop saw GME share prices fall. Subsequently, some of the major cryptocurrency meme coins, including PEPE, FLOKI, and ROAR, collapsed in tandem.
Major meme coins plummet after GME stock crash
Data from CoinMarketCap shows that most meme coins fell by double digits in the last week of trading. According to Coingecko, Roaring Kitty (ROAR) dropped 30% in the previous week and is still in the red on the last day data.
Interestingly, the meme coin is plummeting just days after the highly anticipated live stream of Keith Gill, also known as “Roaring Kitty,” failed to deliver any substantive news.
It remains to be seen whether meme coins will recover after their contraction. Some analysts believe the failure of the US Securities and Exchange Commission (SEC) to take action against “Roaring Kitty” could catalyze demand, reviving a new altcoin season.
In this way, meme coins will be recharged, rising and taking their total market capitalization beyond the $60 billion mark. Due to the collapse, the total capitalization of the meme market fell by more than $8 billion.
Featured image from Canva, chart from TradingView