Since Jan. 22 GameStop has been attracting a lot of attention from the mainstream news every bit the stock (GME) for the popular video game retailer rallied 860% from $17.40 on Jan. 4 to a high of $159.18 on Jan. 25.

On Jan. 25 GME pulled back 51.70% from its high to close the day at $76.79 only what lies behind the massive upsurge warrants closer inspection.

While solid fundamentals often lead to toll breakouts in both stocks and cryptocurrencies, the recent involvement in GameStop appears to have more to do with the 'Reddit army' phenomenon which has seen net groups go head to head with some of the largest firms on Wall Street.

GameStop (GME) one-day chart. Source: TradingView

The most well-known instance of this trend in the cryptocurrency sector occurred when a group of dedicated Chainlink (LINK) investors affectionately referred to by many as 'LINK Marines' joined forces to spread positive news about the altcoin and besides pledged to proceed buying it when larger investors devised a plan to brusque LINK.

In early 2020 the LINK Marines responded to Zeus Majuscule's attempt to short the altcoin. When the word got out that Zeus Capital had referred to Chainlink every bit 'crypto'southward wirecard' and opened a short position, LINK marines went to work, refusing to sell and pushing the altcoin'southward toll to a new all-fourth dimension high by triggering successive curt squeezes.

Fallout from the short call likewise shifted to Nexo Finance equally members of the LINK marines discovered a clue allegedly connecting Zeus Capital with Nexo.

Gemini exchange co-founder, Tyler Winklevoss, previously acknowledged the contribution that the LINK marines add to the cryptocurrency customs with the post-obit tweet:

"I really capeesh the passion of the $LINK Marines. Their fervor and dedication reminds me of the early Bitcoin and Ethereum communities. Unlike many other crypto armies, they are dedicated to a projection that has existent hope and technical merit."

A like situation occurred with GameStop on Jan.21 after Citron Enquiry announced plans to open up a brusque position equally they believed GME toll would autumn back to $20. The reaction to this proclamation was so swift that Citron Research was unable to finish its Twitter live stream due to an overwhelming amount of responses.

Social investing groups are having an outsized touch on stocks

This isn't the first time a group of investors on a social platform take joined together to pump the price of an nugget as a like phenomenon occurred with Tesla and Netflix stock in 2020.

Analysts had been calling for a drop in the price of Tesla (TSLA) stock since early on 2019 and a number of institutional investors opened large brusk positions only to see its value increment past more than than 1000% since that fourth dimension and assistance Elon Musk briefly become the richest person in the globe. Short sellers who piled in on the advice of the trusted wall street analysts accept been crushed by the non-stop motility college.

These moves higher accept been powered in function past the Robinhood effect, a term coined to define irrational stock cost movements acquired by retail buyers on mobile investing apps like Robinhood. Millennial traders high on piece of cake options trading made it possible to pump TSLA and NFLX, triggering a massive brusk clasp again and once more.

TSLA/USD 1-twenty-four hours chart. Source: TradingView

Netflix (NFLX) has as well been plagued with calls of an impending price drop for years equally assay showed that the company was burning through cash, losing subscribers to competitors yet still raises prices. Some of the top investment brokerages rated the stock equally a 'sell' and chat forums were rife with discussions of why Netflix stock should be shorted.

NFLX/USD one-day chart. Source: TradingView

During the time that analysts were writing NFLX off, its price increased from $253 to an all-time high of $586 on January. 20.

Unconventional practices compete with conventional investing

From Tesla to GameStop, information technology's clear that there has been a shift in how investors interact with fiscal markets and the factors that catalyze cost discovery have also changed as retail traders have easier access to market data and analysis.

Threats confronting short-sellers are nothing new, but what is unlike in this situation is that information technology has become "net vigilantes, and not corporate agents, who targeted the shorts," every bit noted by Christopher Smith in a recent thread posted on TradingView.

Smith said:

"The GameStop and Tesla stories prove that retail traders, if they band together, have the power to be market makers and to have on institutions. Information technology also proves that markets aren't necessarily efficient or rational."

The cryptocurrency sector appears to exist on the precipice of becoming a mainstream investment and as mobile investing platforms gain more marketplace share and the popularity of social investing grows, it's possible that the same miracle seen with GameStop and Tesla will become commonplace with the depression market cap, illiquid tokens that populate the crypto market.

Millennials are also condign increasingly interested in investing and as more of them engage with mobile investment platforms, these social investing phenomena could become more prevalent.

A clear case that the two worlds are beginning to merge can be establish on the Twitter feed of Tesla CEO Elon Musk, MicroStrategy CEO Micheal Saylor, and Twitter CEO Jack Dorsey. Each frequently references Bitcoin or other cryptocurrencies like Dogecoin in their tweets and a number of times this has resulted in a temporary price pump of the discussed asset.

As 2021 progresses, it will be interesting to see how mainstream financial markets adjust and change to the growing influence of decentralized groups of united retail investors.

The views and opinions expressed here are solely those of the author and do not necessarily reverberate the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your ain research when making a conclusion.