A frenzied boom in retail investing has gone from “cool” to cool-off in recent weeks.
That’s according to historical Google search data. Queries in the U.S. for keywords tied to day trading have been plummeting recently, especially compared to the start of the year. Search interest for “invest” and “buy stocks” has dwindled down to pre-pandemic levels.
The trend—or rather, the lack of trending—does not bode well for the pandemic’s memeified “stonk” darlings. As Nicholas Colas, cofounder of DataTrek, a market research firm, wrote in a Thursday note that pointed out the downturn, quoted by Reuters, “Bubbles need fresh money, or they deflate. Quickly.”
Turns out the animal spirits that drive people to look things up online similarly sway the stock market. Share prices for companies such as movie theater chain AMC and video game retailer Gamestop—two of the market’s biggest dark horses—slid more than 40% since early June. (Even hotshot cryptocurrencies such as Bitcoin and Ethereum have spiraled downward, wiping more than a trillion dollars off the total market value for all cryptocurrencies, since mid-May.)
If the memefied markets are cooling, you wouldn’t know it from recent business moves. Robinhood is preparing for an IPO. A challenger, Bullish Global, is preparing to go public in a $9 billion SPAC deal. Citi is debuting Citi Self Invest, yet another no-fee stock trading app. Seemingly every business—IPO after IPO after IPO—is seeking to capitalize on the late stock-buying craze.
To be sure, a mind-boggling amount of wealth has been willed into existence by the masses of money-happy meme-makers who haunt Reddit, Robinhood, and elsewhere. Meme-stock prices are still up tremendously year to date. AMC has warp-sped to more than 1,700% to $36 per share versus a year ago. Gamestop has rocketed up 860% to $166 per share in that same span.
But as COVID restrictions ease, IRL distractions are interfering with would-be stock-buying. And with fewer people to keep the party going, hangovers are sure to set in.
Robert H. Hackett
DECENTRALIZED NEWS
Credits 🚀
Goldman Sachs suggests Ethereum could soon surpass Bitcoin’s value … The 29-year-old billionaire owner of FTX says buying Goldman Sachs and CME in the future isn’t out of the question … Peter Thiel-backed crypto group Bullish Global announced plans to list on the New York Stock Exchange through a $9 billion SPAC deal … Crackdowns in China are leading to a crypto mining boom in nearby Kazakhstan … Despite the widening crackdown on cryptocurrencies in China, 33 of the country’s 34 provinces have enacted policies to accelerate blockchain innovation … Crypto firms are buying up former industrial buildings to set up mining operations … The European Central Bank approved an “investigation phase” that could ultimately lead to a virtual currency by the middle of the decade … A South Korean company called LINE Plus, which is half-owned by SoftBank, launched a blockchain platform for central bank digital currencies targeting South Korea … Blockchain audit firm CertiK closed the largest single fundraising round in the blockchain audit space, totalling $37 million, in a Series B funding round … Indian-based Tech Mahindra announced plans to roll out a blockchain-based open source system to track vaccine supply chains worldwide … Indian crypto entrepreneur Nischal Shetty believes the next wave of blockchain innovation will be in consumer products that make digital currencies more accessible in day-to-day life … Crypto company NextHash sponsored a cycling team ahead of the Tour de France … Australia gave $4 million in grants to blockchain start-ups … Filmmaker Roman Coppola was in Cannes to promote his blockchain-based filmmaking platform, Decentralized Pictures … Riot Blockchain announced a 400% jump in year-over-year Bitcoin mining production … TechStars announced a new accelerator program for blockchain startups in Seattle.
Debits 🐻
Bitcoin continued its downward slide despite high inflation and a rebounding stock market … After the latest plunge, Bitcoin is once again underperforming the stock market this year … That’s causing further scepticism about the cryptocurrency’s long-term prospects … In fact, Guggenheim’s Scott Minerd believes Bitcoin could fall to $10,000 … A leaked JPMorgan research note warned against extreme crypto volatility … As a result, the Fed flagged crypto volatility as a national financial risk for the first time … Reports of Chinese crypto miners abandoning their CPUs for fear of another crackdown suggests a recovery may be a long way off … Police in the UK seized $250 million worth of crypto as part of a money-laundering probe … Bitcoin payments to ransomware hackers passed $60 million … Crypto scammers are also accused of ripping off investors for billions of dollars through pump-and-dump schemes … South African teenagers who were trusted with managing crypto investments for the Africrypt investment firm reported fled the country following crash … Binance users are struggling to petition the world’s largest crypto exchange after their accounts froze in May … Overall, trading volumes at the largest exchanges fell more than 40% in June.
FOMO NO MO
Tyler Nikam was getting out of Texas. Niknam, 30, is a top streamer on Twitch, where he’s better known as Trainwrecks to his 1.5 million followers. For hours on end, Niknam was hitting the slots on Stake.com, an online cryptocurrency casino and his most prominent Twitch sponsor, to live audiences of 25,000. He’d been winning big, sometimes as much as $400,000 in crypto in one fell swoop, and he never seemed to go broke. The problem? It wasn’t allowed.
If you visit Stake on a US-based browser, a message will quickly pop up on the site: “Due to our gaming license, we cannot accept players from the United States.” Though Stake doesn't possess a gambling license in any state, Nikam and other US gamblers easily circumvent this by using VPNs.
On Tuesday Wired magazine’s Cecilia D’Anastasio did a deep dive on the shady world of crypto gambling promotion through online streaming service Twitch. The app is currently in the midst of a gambling boom, explains D’Anastasio, fueled by the rise of gaming influencers sponsored by crypto casinos.
The online gambling platforms offer streamers tens of thousands of dollars an hour to play casino games on their channels, such as blackjack, slots and baccarat. These streams have attracted over 100,000 live viewers, with 64 of Twitch’s 1,000 most popular streamers engaging with crypto casinos through their platforms.
While it’s difficult to prosecute the gambling websites for operating without a license in the United States, American-based promoters, including Twitch influencers, could find themselves in legal jeopardy.
BUBBLE-O-METER
$26,147,621
That’s the value of a mysterious Bitcoin wallet that has recently come online after more than 9 years of inactivity, according to Whale Alert, a Twitter account that tracks such big moves. The account, which dates back to the Satoshi-era—when the anonymous Bitcoin creator was still communicating with the crypto world—contained 791 bitcoins, valued at over $26 million today. Who is behind the wallet, and why they chose this particular moment to reactivate the account, remains a mystery.
THE LEDGER'S LATEST
American Express makes debut into NFT rewards with SZA by Jessica Matthews
El Salvador’s move to accept Bitcoin as legal tender could stress the blockchain by Joanna Ossinger
Breaking down Elon Musk’s latest market-moving Dogecoin tweet by Rey Mashayekhi
Iran, Facebook, and Alipay: Why Europe is building another payments network even though it doesn’t need one by Jeremy Kahn and Christiaan Hetzner
Fed Chair: inflation will remain ‘elevated’ in coming months by Christopher Rugaber
What inflation could mean for ETFs by Jessica Matthews
Why you should be terrified of owning Bitcoin by Shawn Tully
How we can learn to stop worrying and love market bubbles by Philipp Carlsson-Szlezak and Paul Swartz
Amid cryptocurrency rout, stablecoin issuer Circle says it’s going public in a $4.5 billion SPAC deal by Brandon Kochkodin
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
MEMES AND MUMBLES
Dogecoin creator Jackson Palmer went on a lengthy Twitter tirade on Wednesday, complaining that cryptocurrency had fallen out of the hands of the masses and was now concentrated amongst the wealthy elite, in complete opposition to its intended purpose. In his hit list Palmer derides the centralized financial system, shady businesses that pay influencers to promote get rich quick schemes, and other proprietors of “financial exploitation.”
“After years of studying it, I believe that cryptocurrency is an inherently right-wing, hyper-capitalistic technology built primarily to amplify the wealth of its proponents through a combination of tax avoidance, diminished regulatory oversight and artificially enforced scarcity," he said.
No more, Mr. Good Boy.
Today's newsletter was lovingly assembled by Jared Lindzon. Thanks Jared!
Interested in joining Fortune's The Ledger as a writer? We could use another pair of (diamond) hands. Contact robert.hackett@fortune.com.
