Meme Stock Mania Is On The Decline As The Metaverse Gains Momentum

The excitement around meme stocks is dwindling as attention is beginning to shift to companies prioritizing metaverses, according to a report from Reuters.

A meme stock is a stock that acquires popularity within investors usually through social media. Meme stocks are inspired by internet memes on online platforms such as Reddit. The metaverse is what tech experts refer to as virtual worlds, with the term gaining momentum after Facebook rebranded itself as Meta.

In 2021, GameStop’s stock price notably surged as a result of Reddit users of the forum r/wallstreetbets causing what is known as a short squeeze, or when a bizarre condition causes a stock to rapidly increase. This is generally referred to as the first meme stock, according to Investopedia.

According to Business Insider, at-home workspaces and the volatility of a market so heavily affected by the pandemic heavily contributed to the escalation of meme stocks. Furthermore, investors are moving on from “simple equities trading” and focusing on more complex assets like cryptocurrencies.

Dan Raju, CEO of fintech company Tradier, said he expects meme stock rallies "to taper off," and that active traders would "jump into crypto” this year.

The pandemic also spawned an unusual perspective of the real estate market, as investors are spending millions of dollars on land in the metaverse.

"There's a lot more interest in metaverse," Apex Chief Executive Officer Bill Capuzzi said. "As more NFT companies become public, we'll probably see them move into the top 100."