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Who is Roaring Kitty and why are meme coins increasing after her return?
The return of Roaring Kitty after three years of silence has thrilled the cryptocurrency community and the meme coin market. What is known about the Massachusetts merchant?
In May, the meme coin market and video game retailer GameStop stocks have experienced a new wave of growth following the return of Roaring Kitty, the trader behind the GameStop stock pump of 2021. Who is this “kitten” and how did he become an example for traders who want to challenge Wall Street?
A kitten who believed in GameStop
In mid-2019, Reddit user Keith Gill, a former financial planner for a Massachusetts insurance company known as Roaring Kitty, shared a single $53,000 investment in GameStop. The post attracted little attention, except for a few people who ridiculed the bet on the troubled company. But that didn’t stop him.
Throughout the year, he actively discussed GameStop on Twitter and revealed details of his investments on YouTube and TikTok. She also started spreading her financial ideas, which Reddit users started following.
A short squeeze in GameStop
Keith Gill, or Roaring Kitty, became widely known for his role in the GameStop stock price surge in January 2021. This event is otherwise called a short squeeze.
The young analyst actively promoted the idea that GameStop shares were severely undervalued. At that time, the pandemic was raging across the world. Consumer spending had fallen and investors had more money in their hands due to historically low rates. Some were angry at Wall Street hedge funds and were happy to spite them.
Inspired by Gill, online traders invested in GameStop shares, driving up prices by buying so-called options contracts that offer a cheap way to bet on the stock price.
Working away from wealthy financial offices, Gill and his associates communicated on Reddit and YouTube and used free online trading platforms. Many traders were so dedicated to their investments in GameStop that they spent hours chatting under Gill’s videos, poring over the company’s financial documents and cryptic details about cash flow and game consoles.
The rise of GameStop
Before all these events, GameStop could have done better. Many institutional investors and hedge funds believe GME stock is overvalued. Therefore, they often took short positions, betting that the company’s stock would fall.
A share of GME was worth around $4.56 on January 4, 2021. However, on January 27, the price hit a high of $347.51 per share, according to TradingView data.
Source: TradingView
This jump is thanks to users of the r/WallStreetBets subreddit, including Keith Gill. Noticing an increase in the number of short positions in GME, they decided to create a short squeeze, fueling interest in GameStop.
Due to the short squeeze, the number of views on r/WallStreetBets jumped to 73 million in just 24 hours. Meanwhile, the subreddit community has grown from one and a half million to six users.
And so, when the price of GME broke through the high, hedge funds with short positions in GameStop began panic buying shares at whatever price they could to cover their losses.
In response to all these events, stock trading platform Robin Hood temporarily limited GameStop stock purchases on January 28, 2021. At that time, the price of GME reached $492 but soon fell to $193.
“We continually monitor the markets and make adjustments where necessary. In light of recent volatility, we have limited transactions for some securities to closing positions only.”
Robinhood statement
The 2021 crackdown on meme stocks led to congressional hearings, including testimony from Gill, on brokerage practices and the gamification of retail stock trading. Gill also faced several class action lawsuits, including one alleging that he pretended to be an aspiring trader even though he was a licensed professional.
The return of Roaring Kitty
A few years later, in May 2024, Roaring Kitty returned to social networks. For the first time in three years you have published a drawing of a man sitting in a chair while playing a video game. Within 24 hours, the message received more than 24 million views.
Community members took Roaring Kitty’s return to social media as a sign. Hoping for something big to come, they bought GameStop shares and pumped out meme coins.
Market reaction
GameStop’s stock price skyrocketed 75%, immediately reaching $53 on the news. Also, one of the most popular meme coins, Pepe (PEPPER), reached an all-time high, and the market capitalization of the entire meme coin sector increased by more than 6%.