GameStop shares have surpassed Bitcoin’s (BTC) yearly returns within a day. Could part of the profits find themselves in the altcoin market, similar to the previous bull cycle?
GameStop stock outperforms BTC’s yearly returns in a day
On the yearly chart, the returns of GameStop shares are up over 154%, compared to Bitcoin’s over 129% yearly returns, according to TradingView.
Source: TradingView
Most of GameStop’s returns came during the past two days, with GameStop's price rising over 105% on May 14, as of 2:35 PM in UTC.
GameStop’s price started rising on May 13, after Keith Gill — the man widely credited with kicking off the 2021 GameStop short squeeze — unexpectedly returned to social media after a nearly three-year hiatus.
Source: TradingView
Gill was at the center of the GameStop saga during the COVID-19 pandemic, which saw retail traders overpower hedge funds shorted the stock. The craze resulted in an over 1,000% monthly price increase for GameStop stock.
In the 24 hours following Gil’s return to X, shares of GameStop rallied as much as 111%, while Dogecoin (DOGE) and the Shiba Inu token (SHIB) gained 6.2% and 5.4%, respectively, in the same time frame.
Will GameStop profits catalyze the 2024 "altszn"?
The return of the GameStop saga has ignited newfound hope in altcoins, considering that during the 2021 cycle, the altcoin rally was triggered soon after the GameStop short squeeze.
Based on historical chart patterns, the 2021 altcoin rally was catalyzed right after the GameStop rally, according to crypto analyst CryptoAmsterdam’s May 14 X post:
“Blue on the left is the GME pump and top in 2021. Blue on the right is what happened to altcoins after that event. Money flows, always.”
Source: CryptoAmsterdam
The current market capitalization of altcoins is also positioned in a similar formation to the 2021 setup that catalyzed the altcoin bull cycle, noted CryptoAmsterdam in a subsequent X post, referencing the chart below.
Source: CryptoAmsterdam
The potential rally is in line with Rekt Capital’s analysis, which expects altcoins to find their local bottom around the beginning of June, before the start of the altcoin season. In a May 8 X post, Rekt Capital wrote:
“Altcoins are following the plan perfectly. Altcoins bottomed in early February. Altcoins sold off around the BTC Halving. Altcoins to bottom early summer.”
Altcoin hype cycles. Source: Rekt Capital
While most altcoins haven’t reacted to the GameStop rally, some memecoins have gained momentum thanks to the saga. Pepe (PEPE) hit a new all-time high of above $0.000010 on May 13, a day after Gill returned to social media.
However, the investing environment is different today, with the outstanding shorts on GameStop being much smaller compared to 2021, which could significantly curb the “size of the move to the upside,” according to eToro market analyst Josh Gilbert.
Gilbert told Cointelegraph:
“The environment is just not comparable to 2021 when interest rates were at rock bottom, governments were providing fiscal stimulus globally, and major economies had little to no inflation.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.