Gregory Davis, the Chief Investment Officer (CIO) at Vanguard, has sounded the alarm about the dangers of making high-risk bets on GameStop. As a leading figure in the global asset management industry, Davis has seen similar scenarios play out before and is urging caution.

The current surge in GameStop's stock price, driven in part by online communities like Reddit, has reached an 18-month high. However, Davis predicts that this rally will not be sustainable in the long run. He draws parallels with the situation in 2021, when many novice investors got caught up in the hype surrounding meme stocks like GameStop. While a few individuals made quick profits, most ended up losing money due to the extreme risks involved.

Davis emphasizes the importance of distinguishing between speculation and investing. He notes that GameStop, as a heavily shorted stock, is often targeted by influencers like Keith Gill, also known as Roaring Kitty. The recent frenzy around GameStop was reignited by Gill's return to the spotlight, causing the stock price to soar by over 60%. However, Davis warns that the current pricing may be irrational and that nothing has fundamentally changed about GameStop's earnings. He believes the ongoing rally will ultimately be short-lived.

In a separate development, Vanguard has maintained its stance against offering a spot Bitcoin ETF, despite its popularity in the market. The company's resolve remains unchanged, even as it prepares for a leadership transition later this year. While Vanguard may not be participating in the Bitcoin ETF market, its investments in other areas continue to perform well.