Dogecoin could be the next target of the social media group behind GameStop’s pump.Â
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Key Takeaways
A rumor last night about WallSteetBets chasing Dogecoin may have doubled DOGE prices in an hour.
The moderator of the Reddit group has decided to refrain from making crypto bets.
The Robinhood stock trading app has now banned DOGE trading.
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The crypto market has stirred at the news that the Reddit WallStreetBets community behind the GameStop stock pump has set its sights on Dogecoin (DOGE). The popular trading app Robinhood had another idea, however.
WallStreetBets Gambles on DOGE
This morning, a moderator made it clear that the group will not participate in “blockchain shit.”
Still, Dogecoin’s near 100% gains since yesterday have raised hopes that crypto’s favorite troll coin could be the next GameStop.
Message from WallStreetBet moderator. Source Reddit
Retail traders led by Reddit’s WallStreetBets community took Wall Street by surprise after successfully cornering hedge funds out of their GameStop shorts. After yesterday’s price carnage that caused $5 billion in liquidations, GME has continued its historic rise to $501 this morning in the pre-market hours—a whopping 2,500% rise since Jan. 1.
The markets have realized that a well-timed social movement can bring astronomic results since retail traders seem to have a lot of power at their disposal.
Low-valued assets are effortless targets for retailers, starting with psychological benchmark targets such as a $100 valuation of GameStop stock (GME) or in $1 DOGE.
The Robinhood stock trading app has now reportedly banned users from buying GME to curb retail users’ impact on stock market price action, infuriating its userbase.
Robinhood, where we "steal from the rich and give to the poor!" Wait, no, not like that… alright too real, shut it down folks
— Grandmaster Trash: Exact Trash Only 🇮🇪 🇵🇸 (@ExactTrashOnly) January 28, 2021
With GameStop off the table, WSB is now looking elsewhere for its next target.
A Twitter account allegedly associated with WSB casually remarked about Dogecoin this morning. The tweet is potentially the cause of a 99.1% increase in DOGE price. The price spike took place over the course of just one hour last night at 23:00 hours ET, with DOGE surging from $0.007 to a peak of $0.147.
DOGE/USD daily chart on Binance. Source: Trading View
WSB moderators have indicated that Dogecoin is not their target, but the greater community may have had other plans.
However, while crypto traders are increasingly growing hopeful of repeating GameStop stock price action with Dogecoin, it seems increasingly unlikely.
Robinhood Halts Dogecoin Trading
Robinhood has reportedly banned DOGE trading earlier today, perhaps under pressure from Wall Street and related parties.
Within hours of the GME ban, the DOGE ban is likely to prove just as inflammatory among Robinhood users.
Many commentators have pointed out the apparent hypocrisy behind Wall Street traders having ongoing access to GME. In contrast, the retail community has effectively been shut out, with Robinhood being one of the main gateways for non-accredited traders to the stock market.
In the short term, the trading bans have dealt a blow to retail traders everywhere.
However, the app seemingly caving to Wall Street pressure will perhaps cause them to look for options that are less centralized and beholden to mainstream market forces. With Dogecoin now on the WSB community radar, a smaller pump may still occur through crypto exchanges.
This is not the first attempt at a social media-backed run in Dogecoin. Not long ago, TikTok users had tried a similar feat, and Elon Musk’s recent DOGE tweet also led to a price pump.
However, there is an important factor of opposing side liquidity missing in Shiba Inu meme-based cryptocurrency. While hedge funds held GameStop shorts due to their poor business performance, Dogecoin shorts are far from popular at the moment.
Disclosure: The author held Bitcoin at the time of press.
