GameStop plummets 64%, Robinhood restricts trading; is Bitcoin next? Frank Holmes
GameStop (NYSE: GME) shares fell as much as 64% on Thursday as online brokers, including Robinhood and Interactive Brokers, restricted trades on the stock.
Frank Holmes, CEO of U.S. Global Investors, said that it is the paradigm of “price discovery” that has led to this explosion in GME shares.
“I guess the short-sellers [are winning] today or the buyers have been prohibited from buying. There’s two arguments, there’s not really that free market,” Holmes said. “These kids are now in their 20’s and early 30’s, they used to be and maybe still are, GameStop buyers. I think this is a very precarious time [to be] telling what people can and can’t do.”
When asked if bitcoin is next to follow the herd downwards, Holmes said that bitcoin may not necessarily act the same way.
“Bitcoin has its own DNA of volatility,” Holmes said. “The DNA of volatility of gold and the S&P 500 is 1% on a daily basis. That means 70% of the time it’s a non-even to go up and down 1%. For bitcoin it’s plus or minus 5%.”
Bitcoin is a growing market that is following Metcalfe’s Law of exponential growth, Holmes noted.