Wall Street return to betting on meme stocks as risk appetite returns

Roundhill Investments is relaunching the MEME ETF this Wednesday, according to Bloomberg. The fund was first created during the pandemic but shut down in 2023 after it failed to grow.

At the time, many thought the frenzy around meme stocks had ended. Two years later, it is clear that the energy behind speculative retail trading is still alive. The U.S. exchange-traded fund market now stands at $13 trillion, and Roundhill is trying to fight for space in it with a second attempt.

The years since the first closure have only intensified the environment. Retail traders have leaned harder into risk, taking on long-shot bets while regulators have opened more doors for ETFs to expand. These products now range from single-stock leveraged bets to high-yield options strategies. Roundhill’s executives believe this is the perfect backdrop for MEME’s return.

“In some ways, ‘meme’ is still perceived as a dirty word. Many still scoff at what the retail community does on various forums. But that’s an entirely antiquated view,” said Dave Mazza, Roundhill’s chief executive officer. “What didn’t fade is the influence of retail in today’s equity market.”

Roundhill builds MEME ETF differently to survive

The new version of the MEME ETF is not a copy of the old one. The first was a passive product that simply tracked a meme-stock index.

This new launch will be actively managed. It will focus on a smaller group of roughly two dozen companies that Roundhill believes show meme-like traits, mainly extreme price volatility. The first basket of stocks includes Opendoor Technologies, Plug Power, and Applied Digital.

Dave Mazza explained that the strategy uses more than just price and volume data. His team will monitor retail sentiment, track online discussion boards, and compare the flows of retail and institutional investors. That includes parsing subreddits and scanning digital chatter.

The goal is to anticipate the names that could be pushed into sudden rallies. The fund will rebalance at least once a week so that it can keep up with rapid shifts in hype cycles. The expense ratio is set at 69 basis points.

Jamie Wise, chief executive of Periscope Capital and BUZZ Holdings, spoke earlier on Bloomberg ETF IQ about the VanEck Social Sentiment ETF, known as BUZZ, which was another product designed to capture online chatter. Roundhill’s MEME ETF will now be competing in a similar space, though with a tighter portfolio and active oversight.

Meme stocks as a concept first broke into the market in 2021. That year, retail investors working through online forums pushed stocks like GameStop and AMC Entertainment into massive short squeezes. It was during that period that funds like Roundhill’s MEME and VanEck’s BUZZ were introduced. Roundhill’s version struggled to scale and closed with only $3 million in assets.

Speculation returns under Trump as retail crowd bets again

In 2025, markets are at new highs. The Trump administration’s policies have fueled rallies in sectors prone to speculation.

Retail traders are diving back into risky positions with the same enthusiasm they had in 2021. This resurgence has carried meme-style trading into the mainstream cultural moment, proving that it wasn’t just a temporary fad.

“The comeback of MEME ETF isn’t so much about the fund itself, but more an indicator of where we are in the cycle with signs that speculation is creeping back into markets and investors are willing to chase risk again,” said Athanasios Psarofagis, ETF analyst at Bloomberg Intelligence. “It may be a challenge for the ETF, but I think they learned their lesson the first time,” referring to the difficulties of attracting assets.

Roundhill is not the only company riding this wave. Other issuers are offering products tied to small and highly volatile groups of stocks. Leveraged and inverse single-stock ETFs have already gathered billions. The competition proves the demand for aggressive trading tools has returned.

Nate Geraci, president of NovaDius Wealth Management, described the current mood simply: “Retail investors are once again partying like it’s 2021. There’s currently an insatiable appetite for risk. For this MEME ETF to achieve success, it will likely need its own viral moment.”

That comment draws a line back to January 2021, when GameStop and AMC dominated financial headlines. At that time, retail traders, boosted by stimulus checks and trapped at home during lockdowns, pushed both companies into unprecedented rallies.

That followed a strong 2020 for markets and led to another 27% surge in the S&P 500 in 2021. But the rally ended with a hard landing in 2022, when the index fell 19%, its worst yearly decline since the global financial crisis.

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