-
Meme stock craze is slowly fading as traders eye gains in cryptocurrencies, says Tradier chief executive officer Dan Raju.
-
He also expects 2022 to see the crypto industry benefit from increased regulatory clarity.
Remember WallStreetBets and the meme stock craze that propelled GameStop, AMC Theaters, and other poorly performing stocks to massive peaks in 2021?
Well, according to the founder of a fintech firm with credible traction in the retail trading industry, 2022 might see a completely different scenario for these stocks.
After posting staggering rallies over the first half of last year, and sending some big short sellers down, meme stocks have broadly declined and are set to see reduced interest, says Tradier CEO Dan Raju.
The Insider quotes Raju as saying that retail traders are more likely to look for opportunities in crypto this year, with an eye for meme stock-style price pumps. In his view, active traders will look to rotate gains into digital assets and thus see stocks like GameStop and AMC Theaters begin to fade.
The Tradier chief noted that rallies in meme stocks over the past year were fueled by the Covid-19 pandemic environment. He pointed to the increased number of people who suddenly had to work from home as a catalyst.
Market volatility, which propelled assets to new highs also played a role, Raju added.
Crypto regulation
In 2022, he looks at regulation as key to crypto adoption as the sector affirms its asset class status. Raju believes regulation will legitimise the crypto asset class, attracting even more investors and pushing prices higher.
Many observers and industry experts have also highlighted regulation as one of the topics expected to dominate the year. A majority of the predictions suggest clear, proper regulation should attract major institutional investors, adding to the likes of MicroStrategy and PayPal.
But Raju thinks the legitimacy that regulation would give to the crypto asset class will not just attract big money institutional investors. He sees retail traders also increasing their exposure, funneling volumes out of meme stocks into crypto.
GameStop and AMC stocks
In December 2020, the price of US-based video game retailer GameStop was around $19. However, in January 2021, the stocks’ value skyrocketed to highs of $347.51. At one time, the GME stock was more than 1,500% up on the monthly log.
While the stock currently trades around $117 and remains 196% up over the past year, it’s down 23% YTD.
A similar trajectory is seen for AMC stock, which is 520% up this past year but has been trading lower since topping around $72.62 in June.
The AMC stock is down 22% YTD.
The post Meme stocks will taper off as traders turn to crypto, says fintech CEO appeared first on Coin Journal.
