It was just a matter of time before the turbocharged worlds of meme-stock and crypto trading collided in a burst of speculative frenzy.
News that GameStop, which became emblematic of 2021’s turbulent year of retail investing, is getting into the business of non-fungible tokens sent the stock soaring 29 per cent in extended trading. The jump followed a sharp retreat since late November.as prices for some digital artworks spiralled into the millions of dollars and celebrities and athletes flocked to the asset class.
Getting into the NFT trade would mark the latest pivot for chairman Ryan Cohen, whose push to reinvent the brick-and-mortar video games seller into a digital-first retailer sparked a fervour for the stock last year, triggering large losses for hedge funds who were short the shares.
The largest market for NFTs, OpenSea, was valued at $US13.3 billion this week in its latest fundraising round. It saw an explosion in sales last year, with monthly volume peaking at $US3.4 billion in August, up from $US96.7 million in February, according to Dune Analytics. The company makes money by taking a 2.5 per cent cut of every transaction.Following OpenSea’s success, a slew of other NFT marketplaces have sprung up in recent months, hoping to attract users.
The stock-boosting power of crypto was on display earlier this week when Square Enix shares jumped 7.5 per cent after its president’s new-year letter set out plans to develop metaverse, blockchain and NFT-based incentives for players. That also illustrated the contrast between the market and public reaction as the developer, whose titles include the iconic Final Fantasy franchise, was roundly lambasted by gamers and industry observers for its monetization efforts.