Bitcoin and cryptocurrency speculation has exploded this year as finance apps roll out crypto support and stimulus cash floods in.
The bitcoin price has soared along with so-called meme stocks Tesla, Gamestop and AMC through 2021, though the likes of Facebook have also surged as investors pile into technology companies.
In the aftermath of trading restrictions being placed on certain stocks in an attempt to calm markets, “hundreds of millions of dollars” flowed into meme-based cryptocurrency dogecoin, according to the billionaire chief executive of crypto exchange FTX—who has predicted a “convergence” between “crypto and the mainstream.”
Sign up now for CryptoCodex—a free, daily newsletter for the crypto-curious that explains the world of bitcoin with brevity. Arriving in your inbox at 7am EDT every weekday
“There are tons and tons of people who have interest in trading crypto and also have interest in trading stocks,” Sam Bankman-Fried, the CEO and founder of FTX, told Laura Shin, speaking on her Unconfirmed podcast. “The moment that a bunch of brokers, including Robinhood, restricted buying of Gamestop, like literally that hour hundreds of millions of dollars flowed into dogecoin. And it was just a really strong signal that it’s the same people.”
In January, trading platform Robinhood restricted the buying of Gamestop stock after internet users collaborated against hedge fund short-sellers who had bet the Gamestop price would fall.
“These same people who were buying Gamestop were buying dogecoin,” said Bankman-Fried. “And I think, frankly, the same people who were buying Tesla and Facebook were buying bitcoin and ethereum.”
Robinhood is among a raft of stock trading and finance platforms, including payments giant PayPal, that have added support for bitcoin and cryptocurrencies over the last few months. Last week, in its prospectus for its upcoming initial public offering (IPO), Robinhood revealed 17% of its transaction-based revenue came from cryptocurrencies in the first three months of the year, with 34% of that coming from dogecoin alone.
CryptoCodex—A free, daily newsletter for the crypto-curious. Helping you understand the world of bitcoin and crypto, every day
Dogecoin, created as a “joke” in 2013, has soared since January to become one of the world’s most valuable cryptocurrencies, sporting a market capitalization of around $37 billion. In comparison, bitcoin’s market capitalization is currently around $650 billion.
“I think we’re seeing more and more convergence as crypto gets closer to the mainstream, the mainstream is getting closer and closer to crypto,” said Bankman-Fried, adding people are increasingly interested “in trading both stocks and crypto.”
Last month, Bankman-Fried declared dogecoin the “asset of the year for 2020 and 2021.”