A well-known figure from the David vs. Goliath story involving video game retailer GameStop Corp (NYSE: NYSE:GME) that pitted retail traders against hedge funds and short-sellers has sights set on the cryptocurrency investors.
What Happened: Hedge fund Citron Research, led by Andrew Left, has returned to the spotlight Wednesday using Twitter Inc (NYSE: NYSE:TWTR) to call out high valuations for the two largest cryptocurrencies.
“As ETH still trades above 1000 with a market cap of 140 billion. We say WTF?” Citron tweeted. “Every high-flying real software/cloud company is trading back to pre-pandemic levels which puts ETH at 200 (which is still expensive).”
The comments come as Ethereum (CRYPTO: ETH) has already lost a significant amount of value over the last month with major cryptocurrencies taking a beating. Ethereum is down 40% in the last seven days.
“Just saw Mike N (Mike Novogratz) on CNBC discussing use cases and the first and only thing he said was the ability to buy collectibles. Anyone who thinks smart contracts and DAO are going to replace escrows and banks has obviously never conducted real business," Citron added.
Tweets from Citron mainly took on Ethereum, but also pointed to the high price and lack of use cases for Bitcoin (CRYPTO: BTC).
“If you want to say that BTC is digital gold because it has collective thought than that is your choice. But to think that a 140 bil software company whose primary use case is to buy online collectibles then joke will be on you.”
Online collectibles could be a reference to non-fungible tokens by the hedge fund.
Citron said Ethereum has never passed “the intellectual honestly smell test.” The hedge fund points to Silicon Valley venture capitalists selling dreams of Web3 to the unsuspecting public.
Related Link: A Short Seller Joins Benzinga's 'Power Hour" To Talk GameStop, The Rest Is History
Why It’s Important: Left said after the GameStop story that Citron Research would no longer publish short reports. The company instead focused on highlighting stocks it thought could be multi-baggers.
“Citron has spent the past year and a half not being vocal on the short side as whatever potential rewards did not justify the trolling of family members on and offline. But sometimes it becomes just too difficult not to bite your tongue and not chime in on the obvious,” Citron tweeted Wednesday.
Left joined Benzinga in early 2021 in a video that went viral where the hedge fund manager claimed shares of GameStop were overvalued and worth $20. The comments made Left a popular enemy in a war that was waged between retail traders and hedge funds.
Due to being an enemy and receiving threats, Left changed the stance of the company to focus on the long side.
“Citron Research will no longer be publishing short reports.”
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