In the midst of the GameStop (GME) stock explosion, the video game retailer just got “tokenized” and “wrapped”. Meanwhile, the Cryptoverse is hard at work drawing parallels between GME and Bitcoin (BTC).
The Cryptoverse woke up this morning to a new token – a decentralized finance (DeFi) developer has created Wrapped Gamestop, an ETH/GME token, “and folks aped into it. Amazing,” wrote Microsoft Strategist Joe McCann.
Per Etherscan, total supply is 20m tokens, and it’s showing nearly 270 transactions by 8:30 UTC Wednesday morning. Uniswap decentralized exchange (DEX) shows the price of GME rising quickly, trading at USD 5.25 at the time of writing, as well as USD 552,500 in volume and USD 414,000 in liquidity.
A wrapped token is an ERC-20 token, meaning it exists on the Ethereum (ETH) blockchain, and it’s pegged to the value of another asset. However, people have been warning that this is not a wrapped token, as it’s not pegged to anything, but just a regular ERC-20 token, and potentially a scam.
‘Proof of concept’ for BitcoinBut this is also where many commenters drew parallels between GME and the world’s number one crypto, stressing the relevance and power of decentralization, and also calling out the hypocrisy they find long-present in the traditional markets: “>
Wait until they find crypto and realize that markets don’t get halted in crypto.https://t.co/fIY7UB3P9U
— WhalePanda (@WhalePanda) January 25, 2021
“Think about what the GME saga means,” said Jimmy Song, a venture partner at Blockchain Capital and a Bitcoin developer/educator. “There’s so much money being printed that a determined group can leverage and short squeeze without much resistance. Until there’s opportunity cost to lending, this is going to be par for the course.”
Furthermore, CoinShares‘ Meltem Demirors compared the massive jump in stocks of companies like GameStop and the giant Tesla, joking how the mainstream media calls bitcoin volatile. Tyler Winklevoss, Co-Founder and CEO of crypto exchange Gemini, said that he were the GameStop CEO, “the next move would be to purchase bitcoin and put it on the balance sheet.”
Additionally, some commenters pointed to the arrival of decentralization, as the subreddit’s moves are tanking a hedge fund. Per The Wall Street Journal, hedge fund Melvin Capital Management has been hit by a series of short bets, and among its short positions, Melvin bet against the surging GME stock.
BREAKING: Melvin Capital closes out of its GameStop position $GME @andrewrsorkin reports: https://t.co/5dx65M7zIP
— Squawk Box (@SquawkCNBC)
I can say with a high degree of conviction that we would shit our pants if this happened.
— Melvin Capital Investor Relations (@MelvinCapitalIR) January 27, 2021
Meanwhile, some, like ‘ParabolicTrav’ argued that medium-term, a cooperative like this subreddit is “an unstable equilibrium,” as the “members will break ranks for profit.”
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Other reactions:
Right now…billion dollar hedge fund managers…all over the world…have redeployed their best and brightest quants and traders…to Reddit.
— Santiago Capital (@SantiagoAuFund) January 26, 2021
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Crypto degen just looking for something to gamble on. https://t.co/S4v7jYnzzg
— Tom Lombardi (@tomlombardi) January 27, 2021
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