-
Interest in meme stocks will gradually fade as traders find gains in cryptocurrencies, says Tradier CEO Dan Raju.
-
He also expects the crypto industry to benefit from increased regulatory clarity in 2022.
Do you remember WallStreetBets and the meme-stock frenzy that propelled GameStop, AMC Theatres and other struggling shares to massive peaks in 2021?
According to the founder of a fintech company with strong ties to the retail trading world, 2022 could tell a very different story for those names.
After a dizzying rally in the first half of last year that humbled some major short sellers, meme stocks have largely retreated and are likely to attract less attention, says Tradier CEO Dan Raju.
The Insider quotes Raju saying retail traders are more likely to seek opportunities in crypto this year, especially chasing meme-style price pumps. In his view, active traders will begin rotating gains into digital assets, causing stocks like GameStop and AMC Theatres to fade.
Raju pointed out that the surge in meme stocks last year was fueled by the unique pandemic environment. The sudden shift to working from home for many people acted as a catalyst.
Market volatility — which pushed assets to new highs — also played a role, he added.
Crypto regulation
For 2022 he sees regulation as a key driver of crypto adoption as the sector cements its status as an asset class. Raju believes clear rules will legitimize crypto, attract more investors and push prices higher.
Many observers and industry experts have likewise highlighted regulation as one of the dominant themes expected this year. A majority of predictions indicate that clear, appropriate regulation should draw large institutional investors, adding to adopters such as MicroStrategy and PayPal.
But Raju argues the legitimacy regulation provides to the asset class won’t only bring big institutions. He expects retail traders to increase their crypto exposure as well, shifting volume away from meme stocks and into digital assets.
GameStop and AMC shares
In December 2020, the U.S.-based video game retailer GameStop traded around $19. In January 2021, however, the stock rocketed to a peak of $347.51. At one point, GME was up more than 1,500% on the monthly chart.
While the stock currently trades near $117 and is still up 196% over the past year, it is down 23% year-to-date.
AMC has followed a similar trajectory: the stock is up roughly 520% over the last year but has retreated from a June high near $72.62.
AMC shares are down 22% year-to-date.