TL;DR
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The worth of ‘stuff’ (like bananas) goes up, making our cash value much less — secure property returning 5-10% per 12 months can’t outpace this devaluation, so traders are shopping for larger danger property (like memecoins).
Full Story
The worth of bananas is driving up memecoin costs.
Hear us out…
Inflation on the value of ‘stuff’ (e.g. groceries — together with, however not restricted to: bananas) continues to be cussed, which implies our cash doesn’t go as far anymore.
This loss in financial worth incentivizes traders to go additional out on the chance curve, as a result of secure property that return a tidy 5-10% per 12 months can now not outpace the silent financial devaluation we’re experiencing.
So when there’s a scorching new inventory or cryptocurrency, extra individuals are more likely to pile into it, on the lookout for a fast win.
Yesterday, that sample of habits performed out in GameStop’s inventory worth.
(Once more).
This time, the catalyst was a Reddit put up from Keith Gill (@TheRoaringKitty on X/Twitter, and @deepf***ingvalue on Reddit), that confirmed his MASSIVE new place in $GME.
His commerce? $200M value of choices that may enable him to purchase $GME inventory at $20 per share by June 21.
(I.e. Keith is wagering that GME can be value greater than $20 per share by the tip of the month, and these choices imply he’ll be capable of purchase in at a reduction).
…cool, what does this must do with crypto?
Nicely, this commerce has gotten a number of consideration — a lot in order that it rattling close to doubled the $GME inventory worth within the span of an hour.
As merchants search for comparable alternatives, they pose the next query:
Q: “I missed the $GME pump, the place’s the subsequent alternative?”
A: “There’s a great likelihood it’s going to be present in a memecoin.”
Is that this a assure? No.
Is that this a symptom of a wholesome market? Additionally no.
However the mania of frothy monetary markets usually results in large worth appreciation throughout high-risk asset courses.
And crypto is a type of asset courses.