Crypto Finds Solidarity with Reddit Degens Winning the GameStop (GME) Battle Against Wall Street
More Affirmation for Bitcoin & DeFi
If anyone can most relate to the chart of GameStop (GME) share prices, it is the crypto market.
The cryptocurrency market can point to many charts where crypto assets have pumped to the moon, sometimes without any rhyme or reason when it comes to certain coins, and dumped just as hard in a very short time period.
While it usually happens when retail is involved, this time, institutions also jumped in on Bitcoin as an inflation hedge, a store of value, a safe haven, and an asset whose performance beats traditional asset classes.
When it comes to GameStop, its share prices are currently trading at $380, up from yesterday’s closing price of $147.98. At the beginning of this month, GME shares were worth just $17. This represents a surge of 2,135% in just 26 days.
Interestingly, crypto-friendly Elon Musk and Bitcoiner Chamath Palihapitiya also contributed to this monster rally when they tweeted about the NYSE listed video game retailer.
Palihapitiya, the CEO of Social Capital, shared with his Twitter followers that he bought February call options of the stock.
“Bought some YOLO calls on GME,” he again tweeted today.
— Elon Musk (@elonmusk) January 26, 2021
The Reddit page shared by Musk, r/wallstreetbets, has 2.8 million subscribers and has been pumping the stock prices, betting against the short-sellers, which are hedge funds’.
One of the subreddit posts calls this “A tug of war between tradition and the future.”
“This affects every single one of you, whether or not you're holding $GME. TLDR: Fuck hedge funds. This is a crosspoint into the future.”
“We can remain retards longer than they can remain solvent,” reads another one.
The notable victim of this has been Citron Research’s Andrew Left and Michael Burry of Big Short Fame who are forced to close their positions.
Michael Burry called one of the greatest shorts of all-time back in 2009.
Michael Burry called one of the greatest short squeezes of all-time in GameSpot.
What. A. Legend.
— Scheplick (@scheplick) January 26, 2021
In the light of this, Nasdaq chief Adena Friedman said on Wednesday that regulators and exchanges need to pay attention to the potential “pump and dump” driven by social media chatter.
However, GME is not the only one that has got the attention of Reddit; AMC Entertainment and BlackBerry are also their YOLO favorites.
The Crypto industry, meanwhile, is applauding this move. Derivatives platform FTX also jumped in and listed GME stocks today.
WSB pumps stonks. With their hard earned money.
The Fed pumps corporate bonds. With money printed out of thin air.
— Qiao Wang (@QwQiao) January 27, 2021
According to SkyBridge Capital co-founder Anthony Scaramucci, the retail traders winning the battle is a positive for Bitcoin as he said,
“The activity in GameStop is more proof of concept that Bitcoin is going to work.”
“How are you going to beat that decentralized crowd? That to me is more affirmation about decentralized finance.”
Scaramucci's SkyBridge has exposure to Bitcoin of about $385 million. The firm's bitcoin-focused fund, SkyBridge Bitcoin Fund, has about $60 million.
“It’s the age of the micro investor, and you better take it seriously; otherwise, you’ll get taken to the cleaners,” Scaramucci said.
If I was the CEO of GameStop $GME, the next move would be to purchase #Bitcoin and put it on the balance sheet.
— Tyler Winklevoss (@tyler) January 26, 2021
“WSB/$GME is ABSOLUTELY in the spirit of Bitcoin,” said Bitcoin proponent Max Keiser. “The corrupt finance cartel got served up some PAY BACK in a completely legal and brilliant way. Bitcoin is doing same to central banks,” he added.