This year, stocks like the movie theater chain AMC Entertainment and video game retailer GameStop (GME) have been the vehicle for individual retail traders to show their dissent against the so-called “free market.” 

Starting in late January and driven by sentiment from Reddit communities such as r/Wallstreetbets, these meme stocks have seen enormous growth this year. GameStop has shown 1,069.80% year-to-date returns, while AMC has shown 1,919.34% gains. At this rate, they should have 2,440% and 4,378% returns on an annual basis, respectively.

Around the same time, Bitcoin 

BTC

$20,707

 ventured beyond the $50,000 mark for the first time ever following the now infamous GME short squeeze and Tesla’s purchase of BTC worth $1.5 billion. While BTC’s price momentum carried on to reach its all-time high of $64,889 on April 14, it crashed severely to reach its pre-surge levels of early January at around $35,000 at the time of writing.

Correlation of GameStop/AMC with BTC unclear

On June 1, the AMC stock began rallying yet again, more than doubling in value in a single day. The stock rose from nearly $30 to hit a high of $65.57 in the mid-day trading session on June 2. BTC also saw a small rebound from the sub-$35,000 levels on the same day to reach the $38,600 range on June 3. Since meme stocks and cryptocurrencies often trade purely on market sentiment and have seemingly correlated in the past in their upward movement, it’s important to assess the correlation between the two, if any at all.

Martin Gaspar, research analyst at CrossTower — a digital assets exchange — told Cointelegraph, “There doesn’t seem to be a large correlation between GME/AMC stock price and Bitcoin price. In the short squeeze that we saw earlier this year, the rise of the price of both GameStop and BTC is likely to have been coincidental.”

About the prospects of AMC in the near future, he added, “AMC could very well be the new GameStop. Stock forums and memes online are showing that many traders seem to believe in AMC, despite its soaring price relative to fundamentals.”

Due to the recent meme frenzy for AMC, the company even got an upgrade in credit rating. According to analysts at S&P Global Ratings, the firm has a lower chance of defaulting after it leverages on the meme frenzy by raising cash in the equity markets. It sold 11.55 million shares at an average price of $50.85. Even though the company’s bonds are classified in the most speculative category of bonds, quite close to companies that are defaulting or at near defaulting, S&P upgraded its rating to CCC+, which is two tiers above its previous levels and seven tiers below investment grade — i.e., BBB-.

Adding to the correlation aspect, Gaspar also commented, “We have also seen more recently that BTC’s price has languished, while AMC has soared, further underscoring this relationship.”

The existence of the correlation between the GME/AMC stocks is often difficult to concretely prove due to the inherently volatile nature of the cryptocurrency markets. Johnny Lyu, CEO of KuCoin — a cryptocurrency exchange — told Cointelegraph:

“There are only similarities between these assets for traders who know how to benefit from high-risk trades, which includes Bitcoin, under pressure from regulation and influencers and assets that allegedly had no real prospects. Fluctuations in the price of both Bitcoin and stock memes are very familiar to the old-timers of the crypto market — pump-and-dump in action.”

AMC shares rose 95.22% on June 2 to hit $62.55. Following the announcement of the 11.55-million-share sale, the share price fell by 17.92%. This, combined with the fluctuations seen in GameStop earlier in the year, is proof that any scenario is possible with these stocks due to missing fundamentals and information spreading on Reddit.

Although, Jim Cramer, host of CNBC’s Mad Money, has indicated that this might be the right time to get into GameStop and AMC, although he warned that “if you’ve ridden them up from much lower levels, take a little off the table. These stories could always get dinged.”

Do Kwon, co-founder of Terra — a protocol for fiat pegged stablecoins — elaborated on the relationship between Reddit and these stocks, telling Cointelegraph, “Both [GME and AMC] reflect the retail trader’s dismay with the current HFT [high-frequency trading] incumbents and asymmetries of the TradFi world.” He added further, “It wouldn’t be surprising to see this continually happen to other assets in the future, especially as social media and the way people organize and interact online evolve.”

Speaking of stocks with well-established correlations with Bitcoin, MicroStrategy (MSTR) is the first stock that comes to mind due to the large Bitcoin reserves it holds, along with the high bullish stance of its CEO and founder, Michael Saylor. The company holds 92,079 BTC valued at over $3.4 billion, accounting for 0.43% of the token’s maximum supply of 21 million tokens.

Related: Stocks of Bitcoin: JPMorgan offers BTC exposure, an ETF in sheep’s clothing

The firm was one of the first publicly traded companies that added Bitcoin to its balance sheet and was also considered a proxy of BTC by the investors in the traditional financial markets. Lyu further said, “The shares of companies that own Bitcoin depend on its value. MicroStrategy lost up to 10% during the week; Bitcoin lost the same amount. It’s okay when you have 90,000 BTC.”

In fact, MicroStrategy is included in JPMorgan’s Cryptocurrency Exposure Basket (CEB), which is a debt instrument portfolio comprising 11 unevenly distributed stocks. These stocks are either issued by the companies that hold BTC on their books as a treasury asset or related to the cryptocurrency in an auxiliary manner.

Apart from MicroStrategy that has 20% of the total allocation, the CEB also has stocks of the companies Square, PayPal, Nvidia Corporation, Riot Blockchain, Advanced Micro Devices, Taiwan Semiconductor Manufacturing Company Ltd, Intercontinental Exchange, CME Group, Overstock.com and Silvergate Capital Corporation. Gaspar further spoke on the performance of the CEB in comparison to BTC:

“JP Morgan’s Cryptocurrency Exposure Basket has likely performed better than BTC, given that this basket includes companies that are not pure-play cryptocurrency companies. This insulates investors from the movements in BTC. Nvidia, one of the companies included in this basket, is currently at all-time highs, while BTC is down roughly 45%.”

Meme stock phenomenon to drive meme coins

Regarding the impact of the meme stock phenomenon on the flagship cryptocurrency in BTC, it remains unclear due to some of the movements looking to be seemingly coincidental. However, it could be a precursor for another meme coin rally similar to the performance of Dogecoin 

DOGE

$0.08

 and Shiba Inu (SHIB) earlier this May as Gaspar stated, “There is speculation among traders that meme coins could be positioned to rally once the crypto market regains its footing.”

What’s important is that the communities that drove the meme stocks to such levels are also behind the stock surges for GameStop and AMC. According to Kwon, “What’s interesting is that the fundamentals for GameStop, AMC and DOGE are all subpar within their relative markets, but they represent a new kind of social Schelling point that is a manifestation of investor dismay with current limits in the current system.”

Related: All hail the Shiba? Rise of Dogecoin pretenders fueled by meme frenzy

However, a meme coin supported by a motivated and decentralized community of online proponents grows out of being a meme after a certain point, as seen in the case of Dogecoin.

It is highly likely that once these meme stocks are saturated with demand, some part of this demand has a high chance of flowing into altcoins, more specifically, meme coins. Especially through trading platforms like Robinhood, retail traders crowd the site looking to make a quick buck and have a laugh with their friends while doing so.