What exactly is GameStop (GME)?
GameStop (GME) is a company that sells games, consoles, and various types of electronic devices. It rose to prominence in early 2021 as a result of the WallStreetBets movement, which pushed its stock to multi-year highs.
WallStreetBets, also known as r/WallStreetBets, was a subreddit where users decided to aggressively purchase various stocks and digital currencies. Among the companies in which WallStreetBets investors put their money were GameStop (GME), Nokia (NOKIA), and AMC Entertainment Holdings (AMC).
Investors from all over the world purchased these stocks using a variety of apps, including Robinhood and Revolut, with the intention of creating a "short squeeze" on large investors. The goal was to demonstrate to large corporations and investment funds that retail investors can be organized in order to influence stock prices.
Indeed, we have seen in recent years how large institutions and corporations controlled stock markets and specific stocks. GME, NOKIA, and AMC are just a few of the companies that were heavily shorted by these institutions because they believed their business model had already expired.
Because the WallStreetBets subreddit grew in popularity, Robinhood and other platforms decided to block and restrict trades in specific stocks like the ones mentioned above. As a result, users have complained and pushed for these companies to allow them to buy these stocks.
Nowadays, and following GameStop's media reach over the last year, it was possible for the company to create a new business plan and adapt its business strategy in order to remain a viable company in the coming years. This is one of the many reasons why people are looking for GME cryptocurrency and how to purchase it.
GameStop would now work to attract more investors and re-establish their business's profitability. There are several ways they could accomplish this while remaining competitive in the GME market.
Understanding what GameStop is will help you understand how GME crypto works and why it has become so important to investors. GME stock is not the same as GME crypto. These key differences will be discussed in the following sections.
What exactly is GME Crypto?
Let's take a closer look at the GME crypto token. This is crucial to understand because it will allow investors to gain exposure to GME and its future business plans. But what exactly is GME cryptocurrency?
When we talk about GME stock, we usually mean the price of GameStop official stock, which is traded on the New York Stock Exchange (NYSE) under the ticker NYSE: GME. This is a traditional stock that can be purchased by investors all over the world through traditional trading platforms.
Users can buy GME stock with their local currency and keep it for as long as they want. However, due to the issues discussed in the preceding section (GME stock being restricted in certain trading apps), some cryptocurrency platforms decided to launch a new token called GME, which tracks the price of the underlying asset.
Essentially, GME crypto is a fictitious token created to provide investors with the opportunity to gain exposure to this stock without necessarily owning the underlying asset. This makes it easier for users to buy or sell it based on their needs.
Individuals who want to buy GME stock without relying on a centralized platform such as Robinhood can do so directly by purchasing the token that tracks the price of this asset. Although this is not an ideal situation, it is extremely useful for users who do not have access to traditional trading platforms.
Furthermore, investors can buy it with digital assets as well as fiat currencies. There are numerous reasons why investors may prefer GME crypto over GME stock. Regardless, it is clear that there are some advantages to holding GME crypto in your own crypto wallet (if you have one).
If you decide to sell it, you can also use decentralized exchanges that do not require KYC to get instant liquidity in other virtual currencies such as wrapped Ethereum (wETH).
Price of GME Crypto
Let us now look at the price of this token and how it has changed over time. Furthermore, we should investigate whether or not GME crypto dividends are paid. When we look at the price of this virtual currency (GME Crypto), we can see that there was a peak in early 2021, followed by a long bear trend that continues to this day.
There has been a major issue with GME crypto, and it is related to the fact that this token has been unable to track the price of the underlying asset. This could happen for a variety of reasons, including the fact that the GME crypto project did not properly back the token with the real underlying asset.
Another factor could be the fact that there are only a few crypto users who want to use this virtual currency. Indeed, many people may have looked for a GME crypto token in order to avoid the trading platform blocks that were imposed earlier this year.
According to CoinGecko, the price of this digital currency has risen in recent weeks. Indeed, the value of this coin has risen from less than $0.20 to more than $1. It has now settled around $0.55 per GME token. Nonetheless, this is a pittance compared to the official GME stock.
If there is a new "short squeeze" in the traditional market, the price of GME crypto is expected to rise rapidly. This would pique the interest of many crypto users, who could use the GME crypto token rather than the official stock to seek higher rewards.
Nonetheless, in the long run, the price of GME crypto is expected to remain flat or to fluctuate only slightly. The GME crypto market has no liquidity, which means that large buyers would be unable to obtain access to this token (indeed, there could be a sudden spike in price with a small order).
In a nutshell, GME crypto is a highly inefficient token with a volatile price that has no relationship with the underlying GME stock price. If you want to buy GME crypto, you should look for a traditional trading platform and buy GME stock there.
Final Thoughts on GME Crypto
Although creating a token that represents the price of GME stock was a good idea, it has not been properly deployed in the market. There is no liquidity or investor interest, and the price has never reflected the true value of the underlying asset.
The implementation of the GME crypto could be improved in the future, which would be very beneficial to the cryptocurrency market as a whole. The investment community would have a new option for buying and selling GME and being exposed to its price fluctuations.