This year, stocks like the movie theater chain AMC Entertainment and video game retailer GameStop (GME) have been the vehicle for individual retail traders to show their dissent against the so-called “free market.”
Starting in late January and driven by sentiment from Reddit communities such as r/Wallstreetbets, these meme stocks have seen enormous growth this year. GameStop has shown 1,069.80% year-to-date returns, while AMC has shown 1,919.34% gains. At this rate, they should have 2,440% and 4,378% returns on an annual basis, respectively.
Around the same time, Bitcoin (BTC) ventured beyond the $50,000 mark for the first time ever following the now infamous GME short squeeze and Tesla’s purchase of BTC worth $1.5 billion. While BTC’s price momentum carried on to reach its all-time high of $64,889 on April 14, it crashed severely to reach its pre-surge levels of early January at around $35,000 at the time of writing.
Correlation of GameStop/AMC with BTC unclear
On June 1, the AMC stock began rallying yet again, more than doubling in value in a single day. The stock rose from nearly $30 to hit a high of $65.57 in the mid-day trading session on June 2. BTC also saw a small rebound from the sub-$35,000 levels on the same day to reach the $38,600 range on June 3. Since meme stocks and cryptocurrencies often trade purely on market sentiment and have seemingly correlated in the past in their upward movement, it’s important to assess the correlation between the two, if any at all.
Martin Gaspar, research analyst at CrossTower — a digital assets exchange — told Cointelegraph, “There doesn’t seem to be a large correlation between GME/AMC stock price and Bitcoin price. In the short squeeze that we saw earlier this year, the rise of the price of both GameStop and BTC is likely to have been coincidental.”
About the prospects of AMC in the near future, he added, “AMC could very well be the new GameStop. Stock forums and memes online are showing that many…