Crypto Howls as Circuit Breakers Restrain Red-Hot GameStop Rally

As an analyst with a background in both traditional finance and cryptocurrencies, I find the current situation surrounding GameStop (GME) stock and the circuits breakers in the U.S. stock market intriguing. While the repeated halts of GME trading on Monday drew laughter from the crypto community, it’s essential to understand the historical context behind these mechanisms.

GameStop’s (GME) share price surged on Monday, fueled once more by the intense interest of traders who are deeply engaged in the “meme stock” phenomenon.

The rally was disrupted multiple times by the US stock market’s well-known mechanism for halting trading, referred to as “circuit breakers,” aimed at keeping prices in check.

Cryptocurrency markets operate continuously without interruption, including around the clock, leaving enthusiasts amused. (Except for rare exchange failures.)

Following the devastating stock market crash in October 1987, the U.S. markets implemented circuit breakers as a response. Initially, these were designed for an across-the-board market halt during sudden downturns. However, after the “flash crash” of May 2010, the circuit breakers were revised to better control individual stock prices.

Government-imposed measures: Former U.S. Treasury Secretary Nicholas Brady is known for introducing this concept following the 1987 stock market crash. He explained to a CoinDesk journalist during a previous engagement, “The circuit breaker I devised brings tranquility back.”