How an investor applied the lessons of the meme stock craze to blockchain and NFT

Nearly two years ago, during the first winter of the COVID pandemic, Roman Tirone was introduced to the world of meme stocks.

“I think I had some friends who reached out to me about them and I took a look,” the New York City-based investor told MarketWatch. “There was a strong community that was absolutely convinced that they would raise the stock.”

These days have been really cool for meme stocks, my darling AMC Entertainment Holdings Inc. AMC,
+ 2.47%
Where investors led the stock to high from $72.62 on June 2, 2021. AMC closed at $18.21 on Wednesday, well below its 52-week high of $52.79, reached on September 13, 2021. Fellow star Mimi Game Stop Corp. shares. GME,
+ 1.13%
It rose to a 52-week high of $63.92 on November 3, 2021 but ended the Wednesday session at $37.93.

Being immersed in the momentum of the meme stock community, Tirone has made significant investments in AMC and Game Stop. “At first things went really well and then things started to deteriorate,” he told MarketWatch.

look now: AMC may have been the darling of memorable stocks, but weakness in some key areas has left the company on shaky ground

However, he was able to apply what he learned elsewhere. “I ended up taking what I learned about digital communities, online investing and new speculative assets, and applying that to investing in blockchain and NFT,” he said.

that NFTor a non-replaceable code, is a unique code digital assets It uses blockchain technology to verify ownership or trade tokens. An increasing number of companies are participating in NFTs. eBay Inc. ebay,
-5.17%And the
For example, recently Launched Her first collection of NFTs, featuring animations of athletes from the covers of Sports Illustrated.

Blockchain, which has grown in popularity in recent years, is a decentralized digital ledger of transactions. The technology is used to support cryptocurrencies such as Bitcoin.

“I learned a lot about how to read momentum, understand how and when a community is a signal, whether it’s good or bad, and how, usually, there are levels within a community…whether it’s someone who is a lifelong investor or someone who is just passing through,” Tyron added. “You cannot indulge in inner enthusiasm for other people’s ideas when it comes to investing.”

After applying what he saw to the world of stock meme, Tyrone now describes himself as an NFT collector. Specifically, Tirone focuses on NFT collectibles, art, and Play-2-earn games, where players are rewarded with NFTs or cryptocurrencies.

The market for NFTs, or non-fungible tokens, has boomed in recent years, but it has been booming refrigerated Little this year Center encryption crash.

look now: Shares of AMC and GameStop ‘squeeze’ smash to multi-month highs

However, Tyrone says his move to the blockchain and investing in NFT has been “life-changing”.

Although pivoted into a new investment strategy, the investor maintains a small position in AMC. “I still have a little bit of AMC – it’s a small part of what I originally had,” he told MarketWatch. “It’s emblematic of the issue at this point.”

Tyrone explained that the reason was all about the young man. “At the high level, it’s a underdog story where people who lose usually have a chance to win,” he said.

George Berkes, an analyst at Bespoke Investment Group, told MarketWatch that the massive bullish volatility in the meme stock is clearly over. However, he described Mimi’s stock as “more stable in outflow,” with some investors unwilling to part with the shares. “The inflows come in very big, very fast, and then the outflows come in,” Birx said.

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To illustrate his point, Birx noted,rough playThat ARK Innovation ETF ARKK,
+ 0.82%
Since its peak in 2021, noting that some investors are still committed to holding the ETF. “This is fairly classic investor behavior and I think it applies to Mimi stock as well,” he said.

The ARK Innovation ETF is down 48.7% since the start of the year. AMC shares are down 33% in 2022 and Game Stop is up 2.2%. S&P 500 SPX Index,
-0.08%
It is down 12.8% over the same period.

AMC announces its results for the second quarter after the market closes on Thursday.