GameStop declined to comment on the reports.

NFTs, which use blockchain to record the ownership of digital items such as images and videos, surged in popularity in 2021, leaving many confusedabout why so much money was being spent on copiable digital items that do not physically exist.

Highly volatile crypto assets have tumbled in recent months, with bitcoin plummeting to a more than three-month low of $42,001.97, down about 38% from its $69,000 all-time high in November.

Ether , used to buy NFTs, has slumped to $3,219.77, levels last seen in early October.

“Stocks themselves are speculative rather than fundamental, and to some extent cryptocurrencies are also not very speculative in nature . excessive exposure to cryptocurrencies could have an effect on the balance sheets of these companies.” , warned analyst Mirabaud  Neil Campling. Short sales against GameStop increased by roughly 1 million shares  in the past 30 days to 8.4 million, now worth $ 1.11 billion and equal to 13% of GameStop’s free float , according to data from S3 Partners.

Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, said Friday’s stock move is unlikely to be a small hedging rally.

 
“We would first need to erase recent market earnings on the short side, which means reverting to levels in the range of $ 170 $ 200 per share,” for a short squeeze to occur, said said Dusaniwsky.