Citron Research, a prominent bearish trader, has exited its short position on GameStop, citing the company's recent cash infusion. However, in a surprising twist, the trader has compared GameStop to meme coins, suggesting that even with billions in cash, the company may not be sustainable.

Citron Research, led by Andrew Left, initially took a bearish stance on GameStop, citing deteriorating financials. However, the trader has now cut its losses, acknowledging the market's irrationality and the potential for another retail investor-driven rally, similar to those seen in meme coin booms.

The comparison between GameStop and meme coins is intriguing, as both have seen significant price fluctuations. Dogecoin, the most valuable meme coin, has a market cap of over $20 billion, while GameStop's market cap is significantly lower. The researcher believes that GameStop's financials are deteriorating, but the potential for another retail investor-driven rally has prompted Citron to cut its losses.

The news of Citron Research exiting its short position on GameStop saw the company's share prices drop, leading to a decline in meme coins such as PEPE, FLOKI, and ROAR. Roaring Kitty, a popular meme coin, has seen its prices fall by 30% in the past week, according to Coingecko data.

It remains to be seen whether meme coins will recover after their contraction. Some analysts believe that the failure of the SEC to take action against Roaring Kitty could catalyze demand, reviving a new altcoin season. If this happens, meme coins could see a resurgence, lifting their total market cap above the $60 billion mark.