- 1 The unofficial “GME” token on Solana platform sees a major price pump, doubling in one day
- 2 Attempts to recreate meme stock mania that propelled GameStop stock to great heights in early 2021
- 3 GameStop shutting down the NFT marketplace this week after sluggish sales
A digital token bearing the GameStop name has exploded in price over the last day, stirring up memories of the meme stock craze in early 2021. However, the major video game retailer has no involvement with this cryptocurrency despite the name.
The “GME” token running on the Solana blockchain has pumped up to 105% in the last 24 hours. Despite having no formal ties to GameStop, the meme coin is seeking to capitalize on the company’s lingering aura among traders who drove its stock price to astronomical levels last year.
What’s Behind the Hype?
The GME token has attracted over $20 Million in trading volume and now holds a market value close to $59 Million. A price of $0.0087 may not seem remarkable, but it represents massive gains for early buyers.
Meme coins and stocks thrive on hype rather than on fundamentals. They often leverage cultural phenomena and prominent brands to entice speculation from thrill-seeking traders.
GameStop retains strong name recognition from the short squeeze that caused its stock to spike by an astounding 2,500% in January 2021. Traders coordinating on Reddit and Discord sent the video game retailer’s shares soaring to punish short sellers betting against the company.
The mania eventually subsided, but GameStop stock remains highly volatile compared to the overall market. This enduring traction likely inspired the creation of a Solana token capitalizing on the name recognition of the GameStop brand.
A Long History of Crypto Memes
Meme coins have become a prominent staple across the crypto sector. While some investors dismiss them as jokes, meme tokens have created immense wealth in short periods.
Dogecoin originated the concept back in 2013, taking the popular Shiba Inu doge meme and turning it into a digital currency. After Elon Musk and other celebrities started promoting Dogecoin in 2020, its market value exploded to over $80 Billion at its peak.
Ethereum co-founder Vitalik Buterin even received $1 Billion worth of SHIB tokens from the project’s anonymous founder in 2021. Buterin promptly donated the coins to charity, but not before the SHIB community panicked over the potential dump.
A Key Difference from GameStop Stock
Unlike GameStop’s stock, the GME meme coin has no intrinsic value tied to a company’s performance. It is simply a digital token with the letters GME along with borrowed brand recognition from the video game retailer.
While GameStop stock still trades publicly across regulated exchanges, meme coins reside in the Wild West of the crypto realm with minimal oversight. They run major risks of pump-and-dump manipulation and developers abruptly abandoning projects and making off with investor funds.
This already occurred with the original GameStop NFT token minted on Ethereum earlier in 2022. After that was rugged and drained for $1.6 Million in proceeds, the newer Solana version emerged to fill the void.
The Boom and Bust Cycle
Meme coins tend to follow a predictable trajectory. They explode based on hype and FOMO, then implode once buying power fizzles out.
Dogecoin itself lost over 80% of its value after peaking in mid-2021. However, it remains one of the rare meme coins with enduring appeal years after launch. This presents an extremely high risk/reward proposition that continues luring thrill-seeking crypto traders.
GameStop’s Underwhelming NFT Venture
Ironically, while the meme coin world tries capitalizing on GameStop’s aura, the retailer’s own NFT initiative never got off the ground.
GameStop launched an NFT marketplace last July in hopes of reinventing itself for the Web3 era. However, sales sputtered from the start, with just $1.7 Million in transaction volume generated across more than 54,000 wallet installs.
Earlier this month, GameStop announced plans to shut down its NFT platform due to its lackluster performance. The closure will occur this Friday, February 2, barely six months from launch.
GameStop may seek to relaunch its NFT business using a different model in the future. But for now, its underwhelming decentralization experiment has come to an unceremonious end.
The GameStop brand retains a strong nostalgic appeal that crypto developers are eager to exploit, though without the company’s permission or involvement.
The newest Solana meme coin capitalizing on this hype has already created Millions in paper gains. However, based on historical trends, equal or larger declines could arrive just as rapidly once buying power evaporates.
Those considering chasing these ephemeral gains should exercise extreme caution and skepticism. Meme coin mania can disappear faster than it emerges. GameStop itself wants no part of this hype anymore following the failure of its NFT venture. Traders should not conflate interest in meme coins with faith in the underlying company’s future.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.