So, about that GameStop rally

Plus: Inflation’s not done messing with us

GM. We peeled back the charts, squeezed the headlines, and what poured out was a tropical crypto nectar. Drink up.

📉 Why is GME down?

🍋 News drops: Ghibli memes break OpenAI, SBF gets transferred + more

🍍 Market flavor today

What you’re looking at 👆 is the crypto market reacting to the latest US inflation data.

The Personal Consumption Expenditures (PCE) report for February came out today, and it confirmed that inflation’s still sticky:

Core PCE inflation went up 0.4% in February (the biggest monthly jump since January 2024) → more than the 0.3% economists expected;
12-month inflation is at 2.8% → above the expected 2.7%;
Consumer spending rose 0.4% → lower than the 0.5% predicted.

The Fed uses this data to decide when (or if) they’ll start cutting interest rates.

Higher inflation = more reason for them to wait before doing that.

And for crypto, this is a big deal.

Lower interest rates = cheaper money = more people willing to take risks = more money flowing into crypto.

If the Fed doesn’t cut rates soon, crypto markets might stay… underwhelming.

Soooo, uncertainty is not done here, and we should expect more “will-they-won’t-they” energy from the Fed for a while 🫠

This means markets are gonna stay jumpy. Be ready.

🧃 Sip of gains

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🥝 Memecoin harvest

One of these coins could be a rug, but that’s tomorrow’s problem 🤪

Data as of 05:10 AM EST.

Check out these memecoins and plenty more here.

A few days ago, we talked about how GameStop announced it’s buying Bitcoin.

After that news dropped, the GME stock increased by 15%.

Now tho’… all those gains are gone. The stock’s already back to where it was before the announcement, as it lost around $3B in market cap.

But why?

Imagine this: you’re out partying, the vibes are immaculate, and someone says, “Let’s all get tattoos!” You’re hyped. Zero hesitation. YOLO, amirite? 🤠

Then morning hits. You’re staring at a frog in a cowboy hat on your thigh that’s gonna be there for the rest of your life.

“😐… I prolly should’ve thought it through.”

That’s kinda what happened with GameStop. At first, investors were hyped, but then… they thought it through.

GameStop plans to raise $1.3B to buy Bitcoin by selling 0% convertible bonds (very Michael Saylor-core).

How that works – the company borrows money from investors and promises to pay it back later, usually with interest payments as a little thank-you.

But these bonds pays 0% interest. So… why would anyone buy ’em?

Because they’re convertible – meaning bondholders can choose to convert them into GameStop stock later on instead of getting paid back in cash.

(If the stock price goes up, they’ll make a profit.)

And this might make some investors nervous, because it adds more GameStop shares into the market.

More shares = each share becomes a slightly smaller piece of the pie = stock price might decrease.

Plus, some Wall Street dawgs use a tactic called convertible arbitrage when these types of bonds get issued. And that is:

This puts extra selling pressure on the stock because of all the short selling, which can drag the price down.

In fact, MicroStrategy went through the same thing when they issued bonds – their stock dipped, then shot up once Bitcoin rallied and and the arbitrage unwound.

Even though GameStop hasn’t issued the bonds yet, the market knows how it usually goes, so traders might be getting ready already.

And that’s not all – the current drop could be due to institutional investors intentionally driving the stock price lower to secure a better conversion rate when the bonds are finally released.

So yeah, a whole lotta financial gymnastics there – and we haven’t even talked about the other thing that freaked people out:

GameStop also admitted they’ll be closing a bunch of stores this year.

This made things a bit confusing, ‘cause like… is GameStop a crypto company now? What happens to the rest of the business? What’s going on??.. Matter of fact, where even am I?

Add all that to the fact that some people are doubting Bitcoin because of macroeconomic instability rn, and it’s no surprise investors are feeling cautious about GameStop’s big moves.

But despite all that – it’s not GameOver yet (yeah, I just did that. No ragrets.)

If Bitcoin rallies and GameStop manages the transition well, this could all end up being a genius idea.

Until then, investors are right to keep their guard up.

🍋 News drops

🔎 The SEC ended its investigation into Crypto.com. Case closed – no fines, no more drama.

💰 The DOJ seized over $200K in crypto meant for Hamas. Investigators say the money came from wallets allegedly controlled by Hamas, used to launder over $1.5M in crypto since October 2024.

🚌 Sam Bankman-Fried’s on the move again – this time to a transit facility in Oklahoma. No one really knows why.

✋ OpenAI had to hit the brakes after the internet went wild turning everything into Studio Ghibli-style art. Sam Altman said it’s fun, but the GPUs are overheating, so they’re putting some rate limits in place.

⚠️ Dark web hackers say they have Gemini and Binance user info. Now they’re allegedly trying to sell it.