"Retail Investor Power" Reappears, Cryptocurrency Circle and U.S. Stock Market Join Forces in Carnival

In the past half week, the cryptocurrency market and the stock market had a joint carnival.

Two days ago, Roaring Kitty (Keith Gill), the "retail stock god" who once squeezed out Wall Street giants with social influence, returned again after three years. He posted a tweet on Twitter without any text and only one picture, which has been viewed more than 25 million times.

Roaring Kitty's return is unprecedented. After the initial tweet, Roaring Kitty continued to publish several dynamics, all of which were video clips. Although the protagonist herself did not explain much in words, the community has been boiling over it. From the initial cheers to the overwhelming popularization of science, "Who is Roaring Kitty" has become a hot topic from traditional financial communities to crypto communities.

Of course, the most direct and enthusiastic response to Roaring Kitty came from traders in the U.S. stock market and the crypto market.

The U.S. stock market and the crypto market are linked, and retail investors usher in a carnival week

On the day when Roaring Kitty tweeted after three years, a large number of excited traders bought GameStop (GME), the protagonist of "Wall Street War". Due to excessive volatility, the circuit breaker mechanism was triggered six times during the day, and the intraday increase after recovery was as high as 80%. The next day, GME continued to soar, with a three-day increase of 270%, setting the largest increase since the short squeeze myth in 2021.

In addition to GME, the concept of meme stocks in the U.S. stock market rose sharply. The movie group AMC rose by 77% on the same day, and rose by more than 121% at the opening of the next day. The increase was narrowed later, and finally closed up by nearly 32%. In a few days, it also set the largest increase in three years. According to statistics, on Monday, the trading volume of GME and AMC reached 15 times and 20 times their 20-day average levels, respectively.

The return of the "retail investor god" has injected a shot in the arm for many retail investors' group stocks, and several stocks have also risen sharply. The share price of headphone manufacturer Koss rose by 40%, the share price of BlackBerry rose by 12%, and the share price of Tupperware rose by 17%. The share price of "US retail investor base" Reddit rose by 7%, and the share price of Internet celebrity broker Robinhood rose by nearly 7%.

Retail investors were revelling, short-selling institutions were hit hard, and lost more than $2 billion in two days. On the day Roaring Kitty tweeted, GME shorts lost a total of $1 billion due to the sharp rise in intraday trading on Monday. As traders' enthusiasm for pushing up GME continued, Bloomberg terminal information showed that GME short sellers would continue to lose $1.2 billion on Tuesday.

However, research institutions still believe that this wave will not last long. Marco Iachini, senior vice president of Vanda Research, believes in a report submitted to clients that although retail investors are likely to flock to these stocks further in the next few trading days, the possibility of this happening again in 2021 is "low." Nicholas Colas, co-founder of DataTrek, holds the same view, "Retail traders are not just sitting at home and speculating in stocks." "The federal government has not airdropped trillions of dollars in stimulus funds as it did before."

Back to the crypto market, the retail stock god has returned, and the most enthusiastic response should belong to the meme sector, and Roaring Kitty peripheral coins have become the wealth code of the community. In fact, after the launch of Pump.fun, the recent meme craze seems to have peaked, but Roaring Kitty, which has a strong consensus, has brought the most surprising wealth code to meme players. After all, the community has not seen such a "pure" meme theme for a long time.

The eponymous meme KITTY of Roaring Kitty, which was born on March 31 on Solana, rose more than 100 times in a single day one month after returning to zero. A trader spent about $3,000 to buy 17.4 million KITTYs the day before Roaring Kitty tweeted, and he made a profit of more than $100,000 the next day.

Another keyword "GME" also caught up with the train, and several GME meme coins with the same name were launched or revived one after another. The GME meme coin on Solana was launched in February this year. It rose by more than 800% in a few hours after returning to zero three months ago. On Ethereum, the meme coin GME, which was launched 5 hours after the return tweet was sent, also gained more than ten times on its first day of birth. There is also a GME meme coin on the Base chain that rose by 780% in a single day.

Related reading: "The "retail investor god" who once defeated Wall Street has returned, and the meme coin of the same name has skyrocketed 100 times in one day"

GME on Solana started to surge on the day of the tweet, and after a 20-fold increase, it was nearly halved. The next day, it was driven up by enthusiastic retail investors, and continued to rise by 193% in a single day, and the increase in two days was more than 40 times.

If you watched the real-time trend of GME on Ethereum on the night of its launch, you will find that the transaction frequency and volatility values are very large, and every minute has shown a trend of "imminent collapse", but GME has continued to set new highs in the volatility, and it has risen nearly 200 times in one day. The emotional heat aroused by Roaring Kitty in the crypto community is evident.

Crypto Meme Has Entered the "Next Level"

If we consider the liquidity dilemma and meme craze faced by the crypto industry recently, we will find that the enthusiasm and frenzy caused by the return of Roaring Kitty in the crypto community is inevitable.

Roaring Kitty directly shaped and promoted the attention and price fluctuations of GME stocks through its social influence. The participation of a large number of community members formed a group effect. The power of the community and Robinhood, which has a very low trading threshold, have enabled Roaring Kitty to have a wealth myth from $50,000 to $48 million. This spirit coincides with the crypto culture.

The crypto world may be a new stage, but some of its patterns and phenomena are strikingly similar to past market experiences. In a sense, the story of Roaring Kitty and the story of the crypto industry both reflect the power of individual investors in the financial market and their challenge to traditional concepts. He broke the monopoly and control of the market by traditional financial institutions and showed the public that individual investors can influence the market by sharing information and forming communities.

The crypto field is developing rapidly, and with the expansion of the amount of funds, the market has undergone new changes. After the cryptocurrency market attracted a large influx of venture capital (VC) capital, retail investors became the outlet for providing liquidity. Similar to the traditional market, individual investors (retail investors) have become the underlying service objects of capital to some extent, but have not received corresponding support.

The VC-backed crypto market has finally become a "traditional market". Retail investors who no longer believe in capital have turned their attention to more attractive memes, and meme tokens that have increased by hundreds of times have become the focus of community attention. Twitter user Crypto Koryo counted some new meme token data, and CoinMarketCap listed a record 138 erc-20 memecoins in April 2024, an increase of 666% from 18 in April 2023.

Two weeks ago, Eddy Lazzarin, CTO of A16Z, tweeted his views on the popularity of the Meme coin market, expressing his concerns about the far-reaching impact this phenomenon may have. He pointed out that the rise of Meme coins has changed the public, regulators and entrepreneurs' views on cryptocurrencies, viewing it as a risky casino or a series of false promises that cover up the casino. He is worried that this phenomenon will have a profound negative impact on the adoption of encryption technology, relevant laws and regulations, and people working in the industry.

At the time, some community users opposed Eddy's views. They believed that Meme coins provided an opportunity to fight against traditional large institutions, and the opportunity to seize one of the Meme coins could greatly improve life.

Originally, one of the innovations of encryption technology in the financial field was to provide the public with a path to invest in early potential companies, but as the amount of funds increased, the encryption market became more and more similar to the traditional financial market, and encryption projects did not move towards a fairer start-up direction.

So now in the eyes of many people, investing in memes has become the most in line with the current crypto culture. In the past two weeks, the meme coin PEPE has risen by nearly 90%, quietly hitting a new high last night. The meme carnival has been brewing for a long time, and the return of Roaring Kitty is just in time.

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