Volatility in Solana’s GameStop Meme Coin: 70% Plummet Followed by Thursday Rebound

[TL; DR]

Due to high volatility the value of GME memecoin dropped by 70% within the second week of February.

The GME token, with a total supply of 6.9 million, has been performing well since its launch in January.

Shiba Inu, Floki, Baby Doge, PEPE, Maga, Bonk and Dogelon Mars are some popular meme coins for 2024.

Introduction

Memecoins are cryptocurrencies known for high price volatility since they are backed by large communities whose sentiments influence their values. Over the years several memecoins became popular within short periods although others collapsed along the way.

Today, we focus on GameStop, a recently launched memecoin that has been trending since January. We shall also discuss the factors behind its hype as well as its history.

GameStop Memecoin Experiences a Major Price Pump

The recent GameStop memecoin price fluctuations show how volatile these tokens can be. The GME token shed more than 70% of its value in the second week of February as the following graph indicates.

GME Price Performance – CoinGecko

As you see in the diagram, GameStop, one of the Solana meme coins, started February on a strong note with a high of over $0.0105 on the first day of the month. Although it struggled much in the first week it shot to its all-time high of $0.135 on 7 February, marking a solid beginning to the second week of the month.

Nonetheless, the value of GME plummeted by over 70% during that week to close the period at around $0.0514. Although the GME crypto price fell below $0.0021 on 13 February it rebounded to $0.0042 on 16 February, indicating its resilience.

GameStop Crypto History

It is worth noting that the GameStop meme coin, a Solana blockchain based token, has no connection with GameStop stock. Nevertheless, the GME stock resilience inspired the development of the GME crypto token, launched in January this year.

As hinted above, the GameStop stock incident of 2021 where it showed much resilience inspired the development of GME, the GameStop meme coin. That is the reason the two assets share the same ticker even if they are not related in any way. Let’s briefly look at how the GameStop stock incident of 2021 influenced the creation of the GME crypto token.

GameStop Stock Short Squeeze 2021

In January 2021 GME stock experienced a short squeeze that caused its price to rise by 2,500%. The stock traders who coordinated their investment activities through Reddit and Discord were behind the GME price spike. Their intention was to punish short traders who were betting against GME stock.

The reason why some traders betted against GME stock was its low demand that emanated from the effects of the Covid-19 pandemic. In fact, during that period GameStop’s video game stores struggled to get customers, meaning that it was difficult for it to make profit. That situation enticed some traders to bet against the GameStop stock.

As a result, the price of the stock increased by over 2,500%. What caused its price to spike was the sense of community among its major investors. In fact, when some community members realized that several traders were shorting the stock they started buying it in large amounts leading to the GameStop price surge.

That event influenced many investors to recognize GameStop as a top brand, a reason why some crypto creators decided to develop the GME memecoin to remind the market of the GameStop stock’s success story during its times of economic distress.

Specifically, within a month its value shot from $17 to $500. Several financial institutions and media were influencing investors to sell the stock. However, many community members resisted the pressure and held the stock as a form of protest against the short traders and the financial advisors.

In addition, the GME meme coin’s key message to the retail investors is to shun the poor investment advice from certain large financial institutions. Instead, the investors must unite and do what is best for them and for the market in general. Therefore, GME on Solana aims to continue with the aura of the original GameStop stock that started in January 2021.

The GME developers have included the message behind the GME meme coin on their website. They have written, “The $GMEStop memecoin pays homage to the GameStop saga anniversary, showing we can stand up to the big guys together.

In January of 2021 the GameStop short squeeze rocked the world, and with it changed the face of retail investing. Fast forward 3 years later, and $GMEStop on Solana is a tribute to the GameStop saga, a sheer digital force of collective belief and the power of the underdog.”

It added, “The $GMEStop memecoin on Solana is more than a token; it’s a testament to what happens when the masses awaken, a beacon for those who dare to dream of a different financial landscape. It’s a tribute to every trader who, with a click, voted against the tyranny of traditional financial institutions, and a call to arms for a new generation of rebels.”

The GME Tokenomics and its Current Hype

Since its inception the GME token, with a current daily trading volume of around $800,000, has performed well on the market. Very little is known about GME tokenomics except that it has a total supply of 6.9 billion coins.

Just like most memecoins, the value of GME token does not depend on fundamentals but on speculative tendencies from investors and community members. In the case of GME meme coin the team has done much in terms of marketing.

The team has appealed to the public to support the memecoin. Sadly, though, GameStop game stores failed to progress in its blockchain based projects like NFT marketplace and its crypto wallet.

For example, in July 2023 GameStop launched its NFT marketplace with the aim of positioning itself competitively in the web3 sphere. Nevertheless, due to low trading volumes the company shut down the marketplace on 2 February this year. Also, in November 2023 GameStop discontinued its crypto wallet that existed as a web browser extension and a smartphone app compatible with iOS devices.

History Memecoins

The history of memecoins started in the early days of cryptocurrencies. Dogecoin, launched in 2013, was the first successful memecoin. After several crypto influencers promoted it, it gained much traction and attained a market capitalization of over $80 Billion at its peak in 2020.

The success of Dogecoin attracted many memecoin developers to launch their own tokens. To date, Shiba Inu, Floki, Baby Doge, PEPE, Maga, Bonk and Dogelon Mars are some of the most successful memecoins. GME meme coin may become another well-performing cryptocurrency in that category.

Conclusion

Although many meme coins failed to make a big impact on the market in their early days GME has been successful since its inception. The GME meme coin has no relationship with GME Stock although its developers were inspired by the GameStop stock resilience of January 2021. Currently, Shiba Inu, Floki, Baby Doge, PEPE, Maga, Bonk and Dogelon Mars are the leading meme coins.