The GameStop drama and what does it mean for Bitcoin

[hatshepsut93]

If you are living under the rock, the GameStop (GME) stock trading has been making quite the news recently, because retail investors organized on reddit managed to pump this stock and made some hedge funds suffer tremendous losses on their short positions, to a point when trading had to be halted, and similar events occured with other stocks.

Some people from crypto industry are already making comments how this can be good for crypto, because it's a revolt against old-school centralized finance.

I personally wouldn't hurry with conclusions, as this drama isn't over and we're yet to see any actions from SEC, who already said that they are monitoring the situation.

What do you think?

[jackg]

I just saw something on this and I think it's quite funny...

Hopefully the retailers on reddit know when and how to pull out though and make a profit. If a hedge fund wants to do something and it's leaked to retail then that hedge fund is stupid, if it was intentional then that's pretty predatory of them.

The hedge fund(s) might make more money out of this though if they're still trying (which it looks like they are).

[heyhat]

we're yet to see any actions from SEC, who already said that they are monitoring the situation.

What about when Jay Clayton crashed the XRP market and cost retail investors billions? Where can they file a lawsuit against him for market manipulation? But no. They do not care about retail investors. I am very happy since for once the average investor wins.

[exstasie]

Some people from crypto industry are already making comments how this can be good for crypto, because it's a revolt against old-school centralized finance.

I agree. Retail is not only skeptical of financial institutions but now they're willing to fight them on the open market.

I think that's fucking awesome. It's been noted since the March 2020 crash that retail investors are becoming an increasingly powerful force in the market. Now they are becoming.....self aware.

I just saw something on this and I think it's quite funny...

Hopefully the retailers on reddit know when and how to pull out though and make a profit.

This totally brings me back. Was anyone around in 2013 for the Fontas pump and dumps on BTC-e? There was one point where almost all of my crypto was on BTC-e and I managed to ~4x my BTC on a Terracoin (TRC) pump. Total shitcoin! LOL.

I was such a maniac back then, but at least I was smart enough to get in and get out. There were always so many tears in the trollbox after the inevitable dump came. Greedy retail traders being greedy. I suspect something similar will play out here. The dump is where the wheat gets separated from the chaff.

[adaseb]

The reason why GameSpot went from like $3 to $380 in less than a year is due to a few factors. The reddit community of Wallstreetbets is one however the huge short interest, basically over 140% is another. And when you couple it with free stock option trading and gamma squeeze it can lead to the biggest short squeeze in history.

Reason why is similar to what happened with the $36K Bitcoin option that is set to expire in 2 days. There was tons of contracts written for $36K calls. These falls were far far out of money when they were sold. So the market maker didn't hedge anything because "there is no way bitcoin will go above $36K", same as Gamespot options of $20, $60 calls. The market makers knew that it wasn't possible for gamespot to go above $60.

Now when price goes closer and closer to the call option, the delta increases, so market makers need to hedge. So for example if someone bought 100 calls of $100 Gamespot, and price was aproaching $100, the market maker would need to quickly buy 10,000 shares of Gamespot to remain neutral in the market, and when you had thousands of calls with different strikes, along with retail buying the actual stock, its what led to this short squeeze.

[Broly46]

That’s the flippening on GameStop going on, why is it happening right now? Who know? It’s the result of leveraging on communities.

[sunsilk]

I watched almost similar situation about stocks that have made someone rich overnight and the authorities did arrested him because of what he did. The connection of that situation I've said means that there will be an action that is about to come from SEC and other relative agencies in concern which caused this scene.

And in this drama with gamestop, lucky those people that became rich overnight and got a nice pullout on that stock. But yeah, this will take time to be silent in medias.

[orions.belt19]

The reason why GameSpot went from like $3 to $380 in less than a year is due to a few factors. The reddit community of Wallstreetbets is one however the huge short interest, basically over 140% is another. And when you couple it with free stock option trading and gamma squeeze it can lead to the biggest short squeeze in history.

This just goes to show how overleveraged and leechy the market is. It will be interesting to watch how this plays out especially how the SEC would act on this.

The WSB gainers could possibly empower crypto users and serve as a catalyst. Cryptocurrency is solid right now because of the potential behind its tech (especially with blockchain technology) and the growing mistrust for USD as the value standard for the whole world. The way governments can just print fiat money out of thin air, without leveraging it with gold or "value" assets, triggers inflation. With crypto, you just can't print money. Decentralization also means that no institution can control all the money. After this Wallstreet fiasco, many will opt for decentralization after seeing how the market really works.

[davis196]

Some people from crypto industry are already making comments how this can be good for crypto, because it's a revolt against old-school centralized finance.

Nah,this has nothing to do with crypto.This is clear market manipulation,but the "Wallstreet gurus" got butthurt,because this time they weren't causing the market manipulation,someone else defeated them in their own game.
The fact that such big pump can be caused by the members of a subreddit named "Wallstreetbets" makes this even more weird.
Soon the ordinary people will have the power to control the financial markets and the hedge fund managers will have to follow the masses,instead of trying to manipulate the markets themselves.

[Porfirii]

Well, let's se how this ends, but in the meantime it is being quite a curious case, and depending on the output it may be replicated from now on with other companies' stocks. I heard yesterday that people now can choose whether they want a company to "survive" even when it's business model or financials are broken; it seems a very romantic idea, and why not?

Maybe it is considered illegal to openly agree to buy? but the consensus is not something sure, is just an idea thrown to the air, just like the shillers on twitter or other social media doing their job (which doesn't usually work).

Some people from crypto industry are already making comments how this can be good for crypto, because it's a revolt against old-school centralized finance.

They are now talking in reddit about buying DOGE next, but it would have nothing to do with romanticism, just speculation, and it has nothing to do with this GameStop/Blockbuster/etc... case. Anyway, it could work, no one knows what this momentum can lead to.

[HeRetiK]

$GME is going to set a precedent that will change risk management and maybe even regulation forever. And rightfully so.

What we are seeing is payback for 2008. What satoshi did by inventing a new, decentralized asset class, WSB retailers are now doing by playing the game in a way the hedge fonds were too arrogant to expect. They were caught with their pants down and are now trying to shift the blame.

Remember: What's going on is not some pump and dump scheme. It's not a matter of trying to find the greater fool. They're already there. It's the hedge fonds that overshorted the stock. They will be the ones holding the bag in the end. That's the endgame.

There's a chance that retailers will fail. That paper hands sell before the short squeeze comes because Melvin Capital et al manage to drag things out by getting bail out after bail out. Or because they manage to get the rules of the game changed mid-play. Either way, it's the biggest fuck you to old finance since the conception of Bitcoin.

I personally wouldn't hurry with conclusions, as this drama isn't over and we're yet to see any actions from SEC, who already said that they are monitoring the situation.

I really do hope the SEC is monitoring the situation. Following the situation closely you could see a lot of manipulation going on both in the markets and the main stream media. You know how sometimes you would see these weird, failing pump attempt spikes in crypto? You could see the inverse with $GME.

[Hydrogen]

retail investors organized on reddit managed to pump this stock and made some hedge funds suffer tremendous losses on their short positions

Retail investors are such a tiny and irrelevent minority demographic. Its impossible to imagine them generating sums of liquidity necessary to pull this off.

Those getting behind this movement being impulsive and not well informed or educated. The mass hysteria and greed this fosters. Can't be good.

If this were legit they would target a stock or crypto asset where price trends wouldn't be so visible or noticed.

There are less regulated markets trading on lower volume which would be easier to target for better $$ profits and gains.

[mu_enrico]

It won't end well. There must be an epic dump at some point, and the victims usually the small investors.
I think it is more dangerous than the crypto market since, traditionally, the stock market is not as aggressive as the crypto market. Here, we are getting used to the phrase "Only invest what you can afford to lose."

Anyway, I'm shocked there is no auto-rejection or auto-suspension in NYSE.

[LGD2Business]

I just hope that it will have a positive effect on Bitcoin and crypto-currencies generally. People learn traditional finance is changing and wanted to be a part of that change.

It won't end well. There must be an epic dump at some point, and the victims usually the small investors.

There will be a dump but if it happens after tomorrow that would only means hedge funds will be bagholders. They have to close their short positions before tomorrow.

[heyhat]

It won't end well. There must be an epic dump at some point, and the victims usually the small investors.
I think it is more dangerous than the crypto market since, traditionally, the stock market is not as aggressive as the crypto market. Here, we are getting used to the phrase "Only invest what you can afford to lose."

Anyway, I'm shocked there is no auto-rejection or auto-suspension in NYSE.

A friend in the forum shared it.


https://twitter.com/econoar/status/1354780341060333575/photo/1

[jackg]

I was such a maniac back then, but at least I was smart enough to get in and get out. There were always so many tears in the trollbox after the inevitable dump came. Greedy retail traders being greedy. I suspect something similar will play out here. The dump is where the wheat gets separated from the chaff.

The US exchanges look like they're going to be causing the crash themselves. I noticed a buy I placed yesterday (with a fraction of the profits from another trade) hasn't gone through because some European exchanges don't have enough and can't buy them from the US so... (although you can still sell for $340/share (or whatever live price is) so are exchanges trying to get some - or just to not get sued?


If anyone was interested it's still possible to buy on some exchanges although it'd be a massive risk if you're expecting profits.

[stompix]

Some people from crypto industry are already making comments how this can be good for crypto, because it's a revolt against old-school centralized finance.

So, manipulation is good when is we do it 
I love the crypto scene, I can even picture the next few days, everyone that was revolting every day against whales and pumps and dumps will applaud this move since be a pump done by "the free folk",  let's do it as we are on the side of justice.
I'm getting my popcorn ready, every time a revolution is announced or it happens usually the outcome is ten times worse for the people watching on the side.
Yeah let's bring down Wall Street, the same wall street we were begging to invest in two years ago and we were kissing their ass for putting money into bitcoin just a few months ago! Cause....revolution!

What about when Jay Clayton crashed the XRP market and cost retail investors billions? Where can they file a lawsuit against him for market manipulation?

Ask Chapo, I've heard he also plans a lawsuit, but probably you might have higher chances with that shitcoin.

[bits4books]

What's there to think about? As if for the first time in history, someone arranges a pump of something that can be traded. They will play and calm down. They will collect all their profits, fix their dollars and go away and GS shares will return to the previous price.
In this story, the only loser will be the one who does not have time to get out, but I hope that people (or most of them) understand what they are dealing with. Hedge funds will earn their money in the future

[HeRetiK]

It won't end well. There must be an epic dump at some point, and the victims usually the small investors.

As I posted above: The end game is short squeezing the hedge funds overshorting the stock. The victim won't be small investors, but rather institutional ones that have made their fortunes fucking over the little guy over the last few decades.

Anyway, I'm shocked there is no auto-rejection or auto-suspension in NYSE.

There have been a few trading halts over the last couple of days. Robinhood is not allowing buys tomorrow. The latter which is totally unrelated to their affiliation with Citadel who bailed out Melvin Capital with USD 2 billion just a few days ago  

So, manipulation is good when is we do it  

The manipulation happened the months before, when hedge funds artificially suppressed the price of $GME by short after short. This is just a way to call them out on it while abiding to the rules they set.

[bakasabo]

That GameStop stock drama showed that you dont have to be a whale to influence the price. The situation simply proved one more time, that the crowd with similar ideas, aims and a leader (or strategy) can achieve a lot.
As to Bitcoin, we have a lot of users, enough funds and unified goal, we only need little till mass adoption.