Markets
Wall Street Journal on the Rise of Degeneration: A New Era in Stock and Cryptocurrency Trading
According to a relationship By Hannah Miao and Gunjan Banerji for The Wall Street Journal (WSJ), a unique group of traders, known as “degens,” have had a significant impact on the stock and crypto markets in recent times. These traders, often passionate amateurs, embrace high-risk strategies that diverge from traditional investment methods. The term “degen” is a joking reference to “degenerate gamblers,” reflecting their bold and unconventional approach to trading.
The WSJ article states that the degends – made up predominantly of young men – are characterized by their bold bets and skepticism about the wisdom of conventional investing. The degenerative culture thrives on online platforms, where traders share their adventures in purchasing obscure digital tokens, meme stocks, and speculative options. This movement is fueled by the desire for quick profits and a sense of belonging to a community driven by memes and jokes.
The WSJ report goes on to mention that one of the most notable examples of degenerative activity is the recent meme stock craze, specifically involving GameStop stock. The coordinated efforts of these internet traders can lead to dramatic swings in asset prices, with social media playing a critical role. In May, mentions of “degen” on social media rose to over 370,000, a significant increase from the previous month, highlighting the growing influence of this trading style.
For many, degenerative trading offers an enticing promise of fast money. Daniel Moravec, a former professional poker player turned degen trader, believes high-risk trades are more attractive than traditional lottery tickets. The pandemic has accelerated the rise of day trading, with platforms like Robinhood simplifying the process and eliminating barriers like fees and high investment thresholds.
Miao and Banerji also point out that degeneration is not deterred by inherent risks. They trade a wide range of assets, from digital tokens with no real value to highly volatile options. Apparently, Robinhood’s introduction of 24-hour trading has further enabled degens to chase market momentum at all hours.
Keith Gill, known online as “Roaring Kitty” and “DeepFuckingValue,” is a financial analyst who gained notoriety for his role in GameStop’s stock surge in early 2021. Sharing his investment strategies and analysis across platforms like Reddit and YouTube, it played a key role in the “meme stock” movement, in which retail investors significantly boosted the stock prices of companies like GameStop and AMC. His activities led to congressional testimony and a portrayal in the 2023 film “Dumb Money.” Its recent return to social media has reignited interest in GameStop and other meme stocks, causing significant market volatility.
The WSJ report notes that the phenomenon of degeneration extends beyond actions. Cryptocurrency trading volumes have reached record levels, with degens investing in meme coins created for online enjoyment. For example, the Solana-based memecoin Dogwifhat ($WIF) has seen a dramatic increase in value, exemplifying the speculative nature of degeneracy trading.
Finally, the WSJ underlines that, despite the risks and criticisms, the degen movement continues to grow, driven by a sense of community and the pursuit of financial freedom. For many young investors, traditional financial strategies seem inadequate in the face of rising costs of living and economic uncertainty. The ethics of degeneration, while extremely risky, offers a glimmer of hope to those seeking to free themselves from financial constraints.
In a recent Forbes relationship, Sandy Carter talks about memecoins, a unique type of cryptocurrency that started as jokes on the Internet. According to Carter, despite their humorous origins, meme coins like Dogecoin have shown notable market performance, with the top tokens returning over 1,300% in 2024. Carter, COO of Unstoppable Domains, emphasizes the importance of utility and of real-world applications for these coins. She says that, for example, Shiba Inu (SHIB) has partnered with Zama.ai to develop advanced cryptography for financial technologies, setting new standards in both the cryptocurrency and traditional financial industries.
Forbes attributes the success of meme coins in part to celebrity endorsements, such as Elon Musk’s endorsement of Dogecoin. However, he points out that the true value of these coins lies in their real-world usefulness. She cautions that not all meme coins have the same potential, and some should be viewed with skepticism.
Carter points out that for a meme coin to be successful, it must foster a large and engaged community. Floki, for example, has evolved into a movement backing utility projects and NFTs, bringing its market capitalization to over $2.5 billion. Forbes also notes that some robust meme coins are built on established blockchains, such as Bonk on the Solana blockchain, benefiting from extensive ecosystem integrations.
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