Reddit forum threads shift from stocks to meme to cryptocurrencies
Discussion on Reddit’s main cryptocurrency forum overtook WallStreetBets ‘meme stock’ forum activity this month, reflecting the number of day traders who have focused from the stock market to digital coins in research. quick returns and a little fun.
Data from research group Quiver Quantitative shows that the comment volume on the social media site’s r / Cryptocurrency forum increased 82% from May 1 to May 21, with nearly 36,000 comments daily on Friday at the end of a week. volatile for bitcoin and other digital products. currencies.
In contrast, the number of comments on r / WallStreetBets fell 42% over the same period, to just 13,000 on May 21.
WallStreetBets rose to prominence earlier this year when commentators encouraged a short squeeze that drove GameStop and a handful of other stocks up, inflicting heavy losses on hedge funds that had bet against stocks. Reddit’s CEO was called to a congressional hearing in the frenzy.
Millions of Reddit users started following r / WallStreetBets around this time, but comments are down 97% from the late January record of more than 430,000 posts per day, according to Quiver data.
Discussion of cryptocurrencies is prohibited on r / WallStreetBets. Moderators ban posts on cryptocurrencies “or any other worthless security that could be subject to scams or pump-and-dump systems.”
The discussion about r / Cryptocurrency “has been on the rise,” said James Kardatzke, founder of Quiver.
“Many active retail investors don’t just want to see numbers in their Robinhood [brokerage] account increase, they also want to invest in a narrative, ”Kardatzke said, and although trading in meme stocks such as GameStop and AMC have been more low-key in recent months, cryptocurrency developments have grown more and more. more quickly.
In recent weeks, Tesla founder Elon Musk has publicly backed then cooled down on bitcoin and started dogecoin on the joke currency; Bitcoin’s giant carbon footprint has attracted attention; and the Chinese government has signaled its determination to curb the use of cryptocurrency.
“Crypto has a lot of volatility and more interesting scenarios,” Kardatzke said.
Musk was mentioned on r / Cryptocurrency more than 2,000 times in the day after the tweet earlier this month that his electric car maker would no longer accept bitcoin, a move that sparked an inflammatory sale of the digital currency.
As bitcoin hit its lowest price of $ 30,000 on Wednesday last week, comments on the cryptocurrency forum hit a record high of 59,000 in one day.
A recent study found that the number and tone of Reddit comments influenced intraday trading in GameStop during the short squeeze earlier this year.
A similar approach to trading based on social media and gamification was also apparent in crypto assets, said study co-author Brian Lucey, a professor at Trinity Business School in Dublin. “You have a group of people looking for excitement. They have a different perspective on risk and return. ”
Steve Sosnick, chief strategist at Interactive Brokers, said: “Investors always love a stock even. Crypto was a purer expression of memes trading. Speculation in stocks and options has caused quite a stir. “
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