Core Points
The investment frenzy surrounding GameStop and meme stocks in January 2021 ignited a revolution, marking the first time a massive wave of individual investors flooded into the stock market. Experts suggest that part of the impetus for this phenomenon stems from the financial struggles of a younger generation of investors, who feel left behind by economic progress. Five years later, experts indicate that this underlying anxiety may continue to fuel speculative buying in the stock market.
On May 15, 2024, inside the New York Stock Exchange trading floor in New York City, a trader works with GameStop trading information displayed on a screen behind them. Experts point out that the GameStop stock mania five years ago, and the retail trading revolution it spawned, was partly rooted in the financial hardships of younger investors. This generational unease persists today and could have long-term implications for both individual investors and the broader market. In January 2021, the share price of GameStop, a brick-and-mortar video game retailer, was driven up by more than 1600% by individual investors. At the time, amateur traders on the Reddit forum "WallStreetBets" encouraged each other to buy the struggling stock, utilizing emerging digital investment platforms to execute their trades. Jay J. Kinahan, Head of Retail Brokerage Expansion and Alternative Investments at Cboe Global Markets, stated that it was during this GameStop frenzy that a huge number of people in their twenties and thirties participated in stock trading for the very first time. He said, "To be honest, this is the single biggest event that has ever happened in the world of individual stock trading." Kinahan recalled that just two or three years prior, financial institutions commonly grappled with one question: how to attract young people to investing? "We never imagined they would collectively rush into the market all at once."
The Rise of the Individual Investor in the GameStop Era Previously, stock investing was largely the domain of large institutions like asset management firms and pension funds, a landscape fundamentally altered by the GameStop and meme stock mania. Experts say that while factors like the proliferation of zero-commission trading and increased time at home during the COVID-19 pandemic also helped attract a new wave of individual investors, GameStop's impact is undeniable. A 2021 academic study showed that among investors who traded GameStop stock, approximately 4.5% opened their brokerage accounts on or after January 13, 2021—the day the mania began—indicating the event brought a "sizable" number of new investors into the market. These investors were generally younger—averaging just over 30 years old, compared to the average age of 36 for GameStop traders—and had relatively less investment experience. The research was conducted by finance researchers Tim Huss, Daniel Miller, Matthias Pelster, and Sanja Vucetic, using data from an unnamed retail broker. In a separate paper, Jill Fisch, a Professor of Business Law at the University of Pennsylvania, called the January 2021 GameStop episode "perhaps the most prominent example of renewed retail participation in capital markets, a stark contrast to the increasing dominance of large institutional investors." Experts note that this level of participation by individual investors has endured. Data analysis from Rosenblatt Securities shows that in September 2025, individual investors accounted for about 30% of stock trading volume, compared to just 21% to 22% in early 2020. "The volume just skyrocketed; it was incredible," Kinahan remarked.
Why Individual Investors Rushed into the GameStop Frenzy On February 18, 2021, Keith Gill, the Reddit user famous for fueling the GameStop surge, attends a US House Financial Services Committee hearing via video link from his laptop in Tiskilwa, Illinois. A common narrative suggests that the individual investors participating in the GameStop frenzy were mounting a rebellion against Wall Street. By banding together to drive up the prices of meme stocks like GameStop and AMC Theatres, they inflicted heavy losses on institutions like hedge funds that had shorted these stocks. Researchers indicate this likely marked the first instance of "predatory trading" among retail traders—where traders collude by deciding not to sell early, thereby pushing the price higher, even profiting from it. While a "revolt against authority" was likely a factor, some experts believe the core motivation was investors' feeling of being marginalized by economic development. They argue the frenzy was more like an informal referendum by Gen Z and millennials on their own financial distress. In a 2024 article for The Conversation, Richard Whittle, a behavioral economist at the University of Salford, and Stuart Mills, a behavioral economist at the University of Leeds, wrote: "Our research suggests the behavior of retail traders on social media is not simply an anti-finance protest, nor is it irrational high-risk betting. It reflects the arrival in the stock market of a new generation of investors facing economic pressures very different from those of previous generations."
The 'Gamblification' of Society So, why did investors project their anxieties onto trading GameStop stock? Mills suggested it was likely a combination of factors: the lure of theoretically unlimited returns, the "meme effect" of betting on a physical retailer during a global pandemic, and young people's nostalgia for the brand. Financial experts say the GameStop event also reflects a broader trend of "gamblification" within investing and society at large. Justin Shirk, Global Head of Market Structure at Rosenblatt Securities, wrote in an email: "Against a backdrop of rising income and wealth inequality and increasingly bleak prospects for younger generations, today's self-directed retail traders are increasingly viewing financial market speculation, sports betting, and prediction market trading as a side hustle—activities requiring little capital but offering the potential for high returns." The research by Huss, Miller, and others found that investors who traded GameStop stock, besides being younger and less experienced, also had a history of high-frequency, high-risk trading, including buying lottery-like stocks and highly volatile securities. "Speculation is human nature," said William Bernstein, author of "The Four Pillars of Investing." Experts also noted similarities between GameStop stock and other high-volatility assets like cryptocurrencies—assets also predominantly held by younger investors. GameStop might be a prime example of younger investors viewing financial markets as a potential "cure" for their economic woes, said Eric Robbins, a Certified Financial Planner and Associate Director of Corporate Outreach and Research at Penn State Behrend; the proliferation of mobile finance apps and zero-commission trading made it easy for them to participate.
The Rush into 'Alternative' Assets On June 3, 2024, the GameStop logo is prominently displayed on the floor of the New York Stock Exchange during afternoon trading. Unfortunately, Robbins noted, this investment strategy could lead to significant losses—a common outcome for those trying to time the market. Research by Huss and others confirmed this: while some investors made "substantial" profits trading GameStop, those who entered later suffered heavy losses. For instance, investors who bought the stock after January 25, 2021, experienced a median loss of approximately 13%. Young investors have a skewed perception of investment risk, Robbins said. Having only started investing after the 2008 financial crisis, they have largely witnessed a "boom" market; the only major downturn since then was the brief pandemic-induced crash of 2020. "I think as long as people feel their standard of living is declining and that traditional routes to financial goals are out of reach, you will continue to see retail investors piling into novel alternative assets," Mills said. He added that from a psychological perspective, for young investors who already feel left behind, even losing money on high-risk investments might not feel like a significant setback. But experts stress this is far from an ideal way to build wealth. In a 2023 New York Times op-ed about the GameStop event, Nobel laureate in economics and behavioral economist Richard Thaler, along with Owen Lamont, now a Senior Vice President at Arcadia Investment Management, wrote: "Ask any finance professor, and you’ll get the same 'boring' answer: For most people, the best way to invest for the long run is to hold a diversified portfolio of stocks." However, Kinahan also pointed out a positive outcome of the GameStop frenzy: it uniquely sparked an interest in the stock market among young investors who might not otherwise have focused on wealth accumulation so early. Bernstein added that even if young investors make mistakes, they have decades to adjust their strategies and recover. "They'll learn from it," he said. "Nothing changes your mind like a good financial thumping."
Comments