Markets
The Wall Street Journal on the rise of Degens: a new era in stock and cryptocurrency trading
According to a report by Hannah Miao and Gunjan Banerji for The Wall Street Journal (WSJ) A unique group of traders, known as “degens,” has had a significant impact on the stock and crypto markets in recent times. These traders, often passionate amateurs, adopt high-risk strategies that deviate from traditional investment methods. The term “degen” is a playful reference to “degenerate gamblers”, reflecting their bold and unconventional approach to trading.
The WSJ article says that older adults — made up mostly of young men — are characterized by their bold bets and skepticism of conventional investing wisdom. Degen culture thrives on online platforms, where traders share their adventures buying obscure digital tokens, meme stocks and speculative options. This movement is fueled by the desire for quick profits and the feeling of belonging to a community driven by memes and jokes.
The WSJ report goes on to mention that one of the most notable examples of degenerative activity is the recent meme stock mania, most notably involving GameStop stock. The coordinated efforts of these internet traders can lead to dramatic swings in asset prices, with social media playing a central role. In May, mentions of “degen” on social media jumped to more than 370,000, a significant increase from the previous month, highlighting the growing influence of this trading style.
For many, degen trading offers a tempting promise of fast money. Daniel Moravec, a former professional poker player turned degen trader, believes that high-risk trades are more attractive than traditional lottery tickets. The pandemic has accelerated the rise of day trading, with platforms like Robinhood simplifying the process and removing barriers such as commissions and high investment thresholds.
Miao and Banerji also point out that degens are not deterred by the inherent risks. They trade a wide range of assets, from digital tokens with no real value to highly volatile options. Apparently, Robinhood’s introduction of 24-hour trading has further enabled degens to follow market dynamics at all hours.
Keith Gill, known online as “Roaring Kitty” and “DeepFuckingValue,” is a financial analyst who rose to prominence for his role in driving GameStop stock’s rise in early 2021. By sharing his investment strategies and His analytics on platforms like Reddit and YouTube made him a key part of the “meme stock” movement, where retail investors dramatically increased the stock prices of companies like GameStop and AMC. His activities led to congressional testimony and a portrayal in the 2023 film “Dumb Money.” His recent return to social media has reignited interest in GameStop and other meme stocks, causing notable market volatility .
The WSJ report notes that the phenomenon of degeneration extends beyond stocks. Cryptocurrency trading volumes have reached record levels as people invest in meme coins created for online entertainment. For example, the Solana-powered memecoin Dogwifhat ($WIF) saw a dramatic increase in value, illustrating the speculative nature of degen trading.
Finally, the WSJ points out that despite risks and criticism, the degen movement continues to grow, driven by a sense of community and the quest for financial freedom. For many young investors, traditional financial strategies seem inadequate in the face of rising costs of living and economic uncertainty. The degenerative philosophy, although extremely risky, offers a glimmer of hope to those seeking freedom from financial constraints.
In a recent Forbes report, Sandy Carter discusses memecoins, a unique type of cryptocurrency that started as internet jokes. According to Carter, despite their humorous origins, meme coins like Dogecoin have shown substantial market performance, with top tokens returning more than 1,300% in 2024. Carter, COO of Unstoppable Domains, highlights the importance of usefulness and real applications of these parts. . She says that, for example, Shiba Inu (SHIB) has partnered with Zama.ai to develop advanced encryption for fintech, setting new standards in the crypto and traditional finance industries.
Forbes attributes the success of meme coins in part to celebrity support, such as Elon Musk’s support of Dogecoin. However, she emphasizes that the true value of these coins lies in their real-world utility. She cautions that not all meme pieces have the same potential and that some should be viewed with skepticism.
Carter emphasizes that for a coin to be successful, it must foster a large and engaged community. Floki, for example, became a movement by supporting utility projects and NFTs, growing its market capitalization to over $2.5 billion. Forbes also notes that some robust meme coins are built on established blockchains, like Bonk on the Solana blockchain, benefiting from extensive ecosystem integrations.
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