GameStop's Halting Rally Has Crypto Howling

The U.S. stock market has circuit breakers that halt shares sometimes as a safeguard. That's funny to crypto folks.

AccessTimeIconMay 13, 2024 at 3:54 p.m. UTC
Updated May 13, 2024 at 4:32 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now
  • GameStop (GME) stock was halted multiple times amid a huge surge on Monday, drawing laughter from crypto fans.
  • Crypto goes 24/7 without any circuit breakers, unlike the stock market.

GameStop (GME) is yet again the stock of the day, soaring Monday due to support from traders gripped by meme-stock fever.

But it was a stilted rally, halted repeated by the U.S. stock market's famous – or infamous, depending on one's perspective – system of "circuit breakers" designed to prevent prices from getting out of control.

And that has enthusiasts of cryptocurrencies, where markets go 24/7 with no circuit breakers (except for the occasional exchange malfunction), laughing.

The U.S. stock market got circuit breakers in stages following the harrowing crash of October 1987, initially set up as a brief whole-market shutdown in case of a rapid collapse and then later, following the so-called flash crash of May 2010, more tailored toward restraining individual stocks.

These are government-mandated things. Former U.S. Treasury Secretary Nicholas Brady is credited with inventing the marketwide one after the 1987 crash. "The circuit breaker that I invented restores calm," he told a CoinDesk reporter at a prior job.

Yet there are criticisms. If markets plunge but they're frozen, traders can't immediately swoop in and buy, driving prices back up. After Ethereum's ether (ETH) plunged to 10 cents from $317.81 in less than a second back in June 2017, Coinbase said it was considering introducing circuit breakers. It never did. Within 10 seconds, it was back above $300, an executive said at the time in an interview with Bloomberg.

Back in 2024, everything from bitcoin (BTC) to dogwifhat (WIF) kept chugging along Monday as GameStop was temporarily stuck.


Edited by Aoyon Ashraf.




Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Nick Baker

Nick Baker is CoinDesk’s deputy editor-in-chief and a Loeb Award winner. His crypto holdings are below CoinDesk's $1,000 disclosure threshold.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.