GameStop, AMC & Dogecoin: Which Brokers Are Still Accepting New Stock/Crypto Traders?

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Confused about what is happening with GameStop, or trying to understand what all the fuss about Dogecoin is? The sudden explosions in the prices of GameStop and Dogecoin this last week have a lot of people feeling the old “fear of missing out” (FOMO).

If this describes you, follow along. We’ll describe what has happened and how you can set your own investment course.

GameStop

Last week, traders sent the price of GameStop shares soaring up to roughly $350 — a 20-fold increase from the start of the year. This was caused by people on a subreddit Wall Street Bets.

There were two aspects of this. First, by pumping up the value of GameStop, they stood to make money. Second, because some hedge funds were shorting the stock, pumping up the price acted as a way to attack those funds because it could (and did) cost the funds a fortune.

GameStop Price: 25 Jan 2021 - 29 Jan 2021
Image via Google Finance.

This resulted in Robinhood, on January 28th, when it restricted its users from purchasing GameStop and other volatile stocks. This and other pressures cause the stock price to go down. But when Robinhood lifted the restrictions, GameStop shot back up.

Dogecoin

At roughly the same time, “joke” cryptocurrency Dogecoin saw its price increase by a factor of 10 over the two days following the night of January 27th. This seems to have been caused by the subreddit Satoshi Street Bets. Since then, the price has gone down, but it’s still up over 3-times its value on the 27th.

At the same time, Bitcoin, Ethereum, and other established cryptocurrencies have seen their prices rise (although not to the extent of Dogecoin). Coindesk reported, “Few attribute Bitcoin’s price gains Thursday to market fundamentals.”

Robinhood Alternatives

Robinhood competitors like eToro and Plus500 are seeing large volumes of new sign-ups from those looking to replace Robinhood, TD Ameritrade and other apps that stopped offering trades on targeted stocks like GME and / or cryptocurrencies.

Glossary

Dogecoin: Originally created as a joke cryptocurrency, it has become a regularly traded coin — often an entry-point for cryptocurrency traders. It is normally valued at less than one cent. Even during the 2018 crypto boom, it barely rose above 2¢. Last week it peaked above 7¢ and is currently above 2¢.

GameStop: Video game retailer that has struggled the last few years and then especially since the COVID-19 pandemic. Shares were selling for less than $4.00 in 2020 but it has rose above $469.00 this last week.

GME: GameStop’s abbreviation on the NYSE.

Satoshi Street Bets: the subreddit r/SatoshiStreetBets, said to be the source for the recent rise in Dogecoin prices.

Wall Street Bets (WSB): the subreddit r/wallstreetbets, whose members are largely responsible for the dramatic rise in GameStop value over the last week.

Timeline

04 Jan: GameStop price $17.25

12 Jan: GameStop price rises to $19.95; dramatic increase in shorting.

19 Jan: GameStop price rises to $39.36; Citron Research tweets that they will explain 5 reasons why GameStop buyers “are the suckers at this poker game. Stock back to $20 fast.”

25 Jan: GameStop price rises to $76.69.

26 Jan: Elon Musk adds some fuel:

27 Jan: Dogecoin relatively stable at 0.79¢. GameStop price rises to $347.51; Melvin Capital and Citron Research close their positions.

28 Jan: Robinhood disallows trading on GameStop. GameStop price decreases to $193.60. Dogecoin increases to 7.76¢ — almost a 10-fold increase in less than 2 days.

29 Jan: Robinhood allows trading on GameStop. GameStop price increases to $325.00.

30 Jan: Dogecoin down to 2.74¢ — still more than 3-times as high as it has been since the 2018 bull market.

Are You Missing Out?

Unless you are an experienced trader, wandering reddit and Twitter looking for tips that may or may not be worth following is not going to help you. You need knowledge to tell the difference between a great opportunity and a dud (or worse, a scam).

There are lots of people who have made a lot of money this past week. But there are also a lot of people who have lost a lot of money. If you feel as though you missed out, consider that you might have missed on losing your portfolio.

It’s best not to chase get-rich-quick schemes even if some people really are getting rich. The truth is that by the time most people hear of them, the opportunity is gone. Investing in GameStop was clearly a good idea last Monday. Today, not so clear.

The smart bet is always to base your investments on sound analysis. Doing so will provide you with the knowledge you need to assess new opportunities. If you haven’t already, get a reputable broker. Learn to analyze assets. And most of all: be careful and never risk what you can’t afford to lose.

Further Reading and Resources:

See our popular introduction to Dogecoin and Dogecoin trading guides for the history and how you can buy or trade Doge.

If you are looking for information on Robinhood, Trading212 and other popular trading platforms, see our guides to online stock brokers with full reviews of options available in your location.

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