Good morning and welcome to the stock market today! Circuit City is trending on social media, investors can now use crypto to gain permanent residency in El Salvador and Ryan Cohen should be chairman of GameStop (NYSE:GME) in just a few hours. Yes, Wall Street really is bracing for quite a bit of volatility today. So with that in mind, what will the stock market do today?
- The S&P 500 is up 0.14%
- The Dow Jones Industrial Average is up 0.11%
- The Nasdaq Composite is up 0.26%
So what else will the stock market do today? Here are some of the top stories.
What Will the Stock Market Do Today? Watch El Salvador.
Lawmakers in El Salvador just passed a bill that makes Bitcoin (CCC:BTC-USD) legal tender in the country, and President Nayib Bukele says it goes into effect immediately. Crypto fanatics are rejoicing on social media.
Earlier this week, Bukele announced his proposal, framing it as a way to create jobs and reach citizens who are currently unbanked. The legislation quickly moved through the Salvadorian congress, making the country the first to accept BTC as legal tender. As a result, merchants will be required to accept Bitcoin alongside the U.S. dollar.
Bukele has already added laser eyes to his Twitter profile picture, and has been chatting up other crypto opportunities for El Salvador. He says the country is working to develop a crypto wallet, and will be considering mining that uses renewable energy sources. The government will be putting $150 million in Bitcoin in a trust fund to cover the risks merchants will face.
— Nayib Bukele 🇸🇻 (@nayibbukele) June 9, 2021
For investors, there are already a few takeaways. The first is that crypto bulls are framing El Salvador as the first in a series of dominos. Paraguay is also considering legislation to make Bitcoin legal tender, as is Panama. Bulls will see this widening, nationwide adoption as a huge catalyst for cryptocurrencies.
First they ignore you, then suddenly Paraguay 🇵🇾, Argentina 🇦🇷, Panama 🇵🇦, Brazil 🇧🇷, El Salvador 🇸🇻, and Nicaragua 🇳🇮 embrace #Bitcoin
— Tyler Winklevoss (@tyler) June 8, 2021
The second takeaway is that this could have vast impacts on the Salvadorian economy. One stipulation in the legislation is that anyone who invests 3 BTC in El Salvador can receive permanent residency. El Salvador has a current GDP of roughly $27 billion. At the time of writing, Bitcoin has a market capitalization of more than $658 billion. Factor in wildly fluctuating Bitcoin prices, and critics worry this could quickly make an economic system dangerously unstable.
Bet on Privacy for a New World
For many investors, the Colonial Pipeline ransom news sparked an interest in privacy. Bitcoin and its cryptocurrency peers promise private, decentralized transactions, an escape from the traditional financial market. However, U.S. officials announced that they retrieved $2.3 million of the ransom the pipeline operators paid out in BTC. After tracking the ransom to a wallet associated with the DarkSide hacking group, investigators were able to retrieve a portion of the funds.
While many are touting this as a victory in the fight against cyber crime, not everyone feels the same way. If the FBI can track and recover your cryptocurrency payments, are they really that private?
Bitcoin prices were in flux yesterday as a result of the FBI crypto news. Privacy-first cryptocurrencies like Monero (CCC:XMR) and Zcash (CCC:ZEC-USD) have been enjoying some time in the spotlight. Even Bitcoin forks like Bitcoin Gold (CCC:BTG-USD), which promise to better anonymize transactions on the blockchain, have been gaining ground.
But privacy matters as an investment theme beyond cryptos.
The move to working from home, and the shift back to the office, highlight cybersecurity challenges. Ransomware attacks continue to make headlines. American households have an average of 25 connected devices. Amid this all, there are companies with multibillion-dollar market capitalizations like BigID and OneTrust that collect, maintain and use consumer data.
This means that on the flip side, there are companies who will benefit from the fight back. Growing whispers around data privacy laws mean that tech companies that offer privacy and security will be in demand. Finding these investing opportunities now sounds like the best — and safest — bet.
Meme Stocks Mania Finds New Targets
Reddit continues to rally behind a host of new meme stocks, prioritizing names with high short interest.
This morning, sentiment around GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC) remains positive, especially with GameStop earnings on deck. However, retail investors continue to find new opportunities that all offer short-squeeze potential. That has taken them to Clover Health (NASDAQ:CLOV), a de-SPAC company from Chamath Palihapitiya. It has also taken them to ContextLogic (NASDAQ:WISH), a discount e-commerce platform struggling with poor user reviews, insider selling and high short interest.
This morning, it is also taking Redditors to a unique name. That name is GEO Group (NYSE:GEO), the private prison operator. Besides a high short interest, InvestorPlace contributor Robert Lakin highlighted that there is a unique case against the company. GEO has suffered as President Joe Biden orders the U.S. Department of Justice to phase out its relationship with private prisons. Plus, the rise of environmental, social and governance (ESG) investing has pushed many big players away from GEO stock.
For Reddit, the enemy of their enemy is a friend, which means GEO stock is up 41% in pre-market trading.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Sarah Smith is the Editor of Today’s Market with InvestorPlace.com.