Not Just A MEME: GameStop Goes Full Crypto In Partnership With FTX US

Without a doubt, GameStop ($GME) was a huge part of 2021, kick-starting a “meme stock” trend that saw many amateur investors hopping on the bandwagon.

The craze sent the stock prices soaring. At its peak, GameStop managed to hit a record of US$325 per stock with a US$22.6 billion market cap.

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The biggest meme stock of the century is now back in the spotlight, partnering with a leading cryptocurrency exchange, FTX.

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This collaboration will promote interaction between the gaming and crypto communities. Selected GameStop retail stores will start to carry FTX gift cards and GameStop is also labelled as FTX's "preferred" retail partner in United State.

Image Credit: Trading View

“The deal we just announced with FTX is a by-product of our commerce and blockchain team, working hand-in-hand together to establish something unique in the retail world.”

Matt Furlong, CEO of GameStop

The announcement sent GameStop share price soaring. It broke the downtrend and went from a low US$23.50 and peaked at US$26.40.

What is GameStop?

Image Credit: CFA

Started back in 1984, GameStop is a gaming merchandise retailer that sells games, consoles and other electronics.

GameStop wasn’t doing very well in general because it faced stiff challenges from digital distribution services like Steam.

The 2020 pandemic added oil to the fire as the revenue plunged to a new low and it saw a 21% decline from the previous year.

This caught the eye of multiple hedge funds and they all open a short position in an attempt to profit from the potential downfall of Gamestop.

Users of the subreddit r/wallstreetbets saw this as a golden opportunity to short squeeze these hedge funds. They banded together and started buying to initiate the short squeeze.

The Reddit traders were hugely successful and many hedge funds were either liquidated or forced to close their position at a massive loss.

Many ended up closing shop and the largest short seller, Melvin Capital, lost almost 50% of its capital.

Also Read: A New Meme Coin Is Born – Luna Classic Returns To The Top 30

[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]

Featured Image Credit: Chain Debrief