The GameStop drama and what does it mean for Bitcoin

[fillippone]

 The SEC is going to look into what has just happened:

Statement of Acting Chair Lee and Commissioners Peirce, Roisman, and Crenshaw Regarding Recent Market Volatility

The Commission is closely monitoring and evaluating the extreme price volatility of certain stocks’ trading prices over the past several days. Our core market infrastructure has proven resilient under the weight of this week’s extraordinary trading volumes. Nevertheless, extreme stock price volatility has the potential to expose investors to rapid and severe losses and undermine market confidence.

As always, the Commission will work to protect investors, to maintain fair, orderly, and efficient markets, and to facilitate capital formation. The Commission is working closely with our regulatory partners, both across the government and at FINRA and other self-regulatory organizations, including the stock exchanges, to ensure that regulated entities uphold their obligations to protect investors and to identify and pursue potential wrongdoing. The Commission will closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities.

In addition, we will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws. Market participants should be careful to avoid such activity. Likewise, issuers must ensure compliance with the federal securities laws for any contemplated offers or sales of their own securities.

The Commission will continue our work on behalf of investors and the markets. In this regard, we hope to facilitate a robust public dialogue among market participants and investors on the structure and operation of our securities markets. Members of the public can submit tips or complaints through the Commission’s website using this online form. Members of the public with questions should contact the Commission’s Office of Investor Education and Advocacy at 1-800-732-0330, ask a question using this online form, or email us at Help@SEC.gov.

I can see the guys at Citadel shitting in their pants /s.
As a free market believers I do hope SEC are going to fine them, but I doubt it.

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[mindrust]

I have a gut feeling that WSB won't be on the winning side when the dust settles. But that's OK as long as RobinHood and the other thieves get punished also.

[fillippone]

I have a gut feeling that WSB won't be on the winning side when the dust settles. But that's OK as long as RobinHood and the other thieves get punished also.

I think it’s highly unlikely for a WSB boy to get fined or sanctioned. This would imply a massive investigative effort to determine which RH account was somehow tied to a Reddit account. And also, given they operated a KYCed, fully regulated market, I find very difficult for anyone to demonstrate some rule breaking.

Of course, this is instead my gut feeling. Like no major fine to Citadel and company.

[Gyrsur]

I have a gut feeling that WSB won't be on the winning side when the dust settles. But that's OK as long as RobinHood and the other thieves get punished also.

I think it’s highly unlikely for a WSB boy to get fined or sanctioned. This would imply a massive investigative effort to determine which RH account was somehow tied to a Reddit account. And also, given they operated a KYCed, fully regulated market, I find very difficult for anyone to demonstrate some rule breaking.

Of course, this is instead my gut feeling. Like no major fine to Citadel and company.

the guy which orchestrated the "manipulation" has revealed himself already.

let's see what the future will bring.  

two guys in GB were fined high for orchestrating a snow ball fight theses days too.

[LoyceV]

I couldn't help smiling at the thought of some Wall Street sharks losing billions I already read that some politicians now want to look into the shorting regulation.
It's also kinda nice to see crypto-style volatility on the stock market for a change.

Far forward in the future, I'd love to see blockchain-shares. Kinda like back in the days, when shares where printed on paper, and you could just store them by yourself so your broker can't lend them out and some rich shark can't sell them to short them.

With crypto, you just can't print money.

Sure you can, that's literally what altcoins do. They're too late to get into Bitcoin cheap, so they create and hype their own altcoin, ICO, Fork, DeFI or whatever they come up with next. Then they sell it to some sucker and run off with real money.

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.

I think that's very unlikely. But it would be be nice if it becomes harder to short. Shorting to me looks like a very bad part of capitalism, it's the opposite of investing and yet they earn from it.

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

If the hedge funds really lost a couple billion dollars (I've seen numbers ranging from $3 to $70 billion), it's not a zero-sum game for the "small" investors. As a group, they can profit a couple billion dollars. Of course some of them will end up at a loss, but the average could be positive.

Haha the Gamestop thing is really the funniest thing I have ever seen in my trading life.

To me, this is as unexpected as the negative oil prices last year. Markets have a very long bull run now, it's inevitable to go down at some point. I just didn't expect things like this to happen first.

https://twitter.com/CGasparino/status/1354859765491494912

"BREAKING: Regulatory sources say @SEC_Enforcement will be looking at a market manipulation case on @RobinhoodApp - @reddit - $GME imbroglio. They expect SEC to ask for Robinhood's blue sheets trading data, and try to match it up with suspicious comments on Reddit. (1/2)"

So SEC is saying it's illegal to base your trades on something you've read on the internet? Millions of people do that, I too get most of my information online. Or is it only illegal if it hurts sharks?

The problem is, them being so greedy that they are shorting 40%  more than the entire company. If the company has 100 shares in total, they are trying to short 140 shares. How can one sell something that doesn't exist in the first place?

So they borrow shares, sell them, then borrow them again from the new buyer? That's crazy, it's like fractional reserve shares

[acquafredda]

Imagine the SEC needing to sue a meme...because that is what could happen really. Would you believe it?
A bunch of self-proclaimed retarded against the wolves of wall street.
Welcome to Irresolute New World.
And do not forget to buy doge, such wow.

[jaysabi]

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?

The hedge funds that shorted the stock to a technically unsustainable level are getting what they deserve. However, the same goes for the idiots who are still buying the stock. GME isn't worth $400 a share and in all likelihood will never be worth $400 a share.  A collapse is all but guaranteed.  Right now there is still to much hype driving the buy side, but this will lose momentum over time for the simple fact that people sitting on huge paper gains can't realize them without selling. Just as the buildup gained momentum, eventually the opposite will happen and the collapse will build momentum.  One thing remains invariably true- anyone who loses money trading this absolutely deserves it.

[hatshepsut93]

I have a gut feeling that WSB won't be on the winning side when the dust settles. But that's OK as long as RobinHood and the other thieves get punished also.

People are saying that it's not a bubble, it's a short squeeze, that you can profit from hedge fund losses, but come on, GameStop is not worth whatever billions it is worth now. The price will go down and late buyers, especially noobs, will get rekt, there's no other way around it. I think it's ironic that all these people who hate the Wall Street for screwing the little guy are seeing no problem with throwing the same little guy under the bus just to ruin some hedge fund.

[adaseb]

I have a gut feeling that WSB won't be on the winning side when the dust settles. But that's OK as long as RobinHood and the other thieves get punished also.

People are saying that it's not a bubble, it's a short squeeze, that you can profit from hedge fund losses, but come on, GameStop is not worth whatever billions it is worth now. The price will go down and late buyers, especially noobs, will get rekt, there's no other way around it. I think it's ironic that all these people who hate the Wall Street for screwing the little guy are seeing no problem with throwing the same little guy under the bus just to ruin some hedge fund.

Yes but the issue at hand right now is not the late buyers who will get rekt holding the bag but its to squeeze all the hedge funds which shorted GME and cause price to hit $10K or so. Right now they weren't taking the money from the little guy. They were bsaically liquidating the hedge funds shorts and they were the ones who ended up having to buy at a high price.

Then the restrictions started to come into play prohibiting most brokers from allowing trades on GME. Do you think these restrictions were so "Late buyers won't get screwed holding a $10 stock at $500/share"? or was it " To prevent a dozen hedge funds from having to go bankrupt and liquidate all their assets"?

What happened this week is proof that the game is rigged and the little guy will never win.

[kiki8899]

Cryptocurrency, like stocks, has always been a capitalist’s game. Ordinary people can only seize a little opportunity to make money by obtaining information. With the popularity of cryptocurrency, things like Bitcoin and getting rich overnight have become more and more difficult.

[Scrumble]

With new management in the whitehouse, fear of tax raise, and now money literally being taken from the people by wall street and robinhood by halting the purchase of GMC, and the recent pump of dogecoin (absolutely hate that coin so i never bought in), more people than ever are learning that the "free market" isnt really "for the people". And with the dogecoin hype, more people than ever are learning how to buy and trade crypto. Leading people to know more about bitcoin and ETH and hopefully join in. I think it is only a matter of time before bitcoin sees another pump. Ofc itl be a spike with a drop, but not everyone will be getting out and people like myself who bought in earlier will be enjoying the ride.

[mindrust]

The hedge funds that shorted the stock to a technically unsustainable level are getting what they deserve. However, the same goes for the idiots who are still buying the stock. GME isn't worth $400 a share and in all likelihood will never be worth $400 a share.  A collapse is all but guaranteed.  Right now there is still to much hype driving the buy side, but this will lose momentum over time for the simple fact that people sitting on huge paper gains can't realize them without selling. Just as the buildup gained momentum, eventually the opposite will happen and the collapse will build momentum.  One thing remains invariably true- anyone who loses money trading this absolutely deserves it.

If I had a RH account right now i would short the fuck out of that stock. I don't give af if that's a riot against the hedge funds or the financial system. That screams free money. They were aiming for $300-500 at first and then they started screaming $1000 lately i see them if they want to pump this to $60k because they calculated the whole wall street would go bust if they do so. What kind of drugs are they taking again?

If they want to wreck the wall street why don't they long gold? If all those people were longing gold instead that would cause much more harm.

As you said the company is initially worthless. Even if they pump it to $100k eventually it will return to 0.

[ashmodeus]

yes, i was hear about that also yesterday , a retail trader vs elite trader , and of course , its kinda fun to watch, a new drama in the new year .

If they want to wreck the wall street why don't they long gold? If all those people were longing gold instead that would cause much more harm.

As you said the company is initially worthless.

gold a different thing i guess, like a high liquidity, its will not easy.

Even if they pump it to $100k eventually it will return to 0.

probably, but at least they win , just see how the drama going, they seems just aimed for screw up the elite people.

[HeRetiK]

With new management in the whitehouse, fear of tax raise, and now money literally being taken from the people by wall street and robinhood by halting the purchase of GMC, and the recent pump of dogecoin (absolutely hate that coin so i never bought in), more people than ever are learning that the "free market" isnt really "for the people". And with the dogecoin hype, more people than ever are learning how to buy and trade crypto. Leading people to know more about bitcoin and ETH and hopefully join in. I think it is only a matter of time before bitcoin sees another pump. Ofc itl be a spike with a drop, but not everyone will be getting out and people like myself who bought in earlier will be enjoying the ride.

r/dogecoin used to have a special place in my heart back in the day (it used to be kinda like r/wallstreetbets but with less colorful language), now I just feel ashamed for that part of the crypto community. They are literally just inciting a pump and dump, trying to capitalize on what's going on with $GME right now. They are introducing newcomers to the worst side of crypto, rather than the potential.

If they want to wreck the wall street why don't they long gold? If all those people were longing gold instead that would cause much more harm.

As you said the company is initially worthless.

gold a different thing i guess, like a high liquidity, its will not easy.

I've seen a few handful of posts considering $SLV a potential target, but liquidity and short interest are probably not even close as favourable.

It's also worth noting that the majority of r/wallstreetbets seem to agree / realize that the $GME squeeze is going to be a one time thing, although I wouldn't be surprised if parts of the community splinter off, looking for similar opportunities in the future (at least depending on whether the big squeeze actually happens).

[fillippone]

Numbers are going up!

Losses on short positions in U.S. firms top $70 billion - Ortex data

LONDON (Reuters) - Short-sellers are sitting on estimated losses of $70.87 billion from their short positions in U.S. companies so far this year, data from financial data analytics firm Ortex showed on Thursday

Please note this is an aggregate figure:

Its data also showed that estimated losses from shorting GameStop at $1.03 billion year-to-date, while those shorting Bed, Bath & Beyond were looking at a $600 million loss.

1.03 billions, so far.

[acquafredda]

That is the most unbelievable part. Now there is a clash of interest between those who were mocked bad by a whole reddit community (Robinohood), those who have been basically drained (hedge funds) and those who made a quick buck (WSB).
To me the most important thing of this whole story is that this showed how much power crowdsourced masses have. Using this huge power for the good or the bad can have huge consequences in the real life. How ready are we for that?

[Twentyonepaylots]

Bitcoin pretty much experienced the same thing in the last, only that there are no greedy bankers taking advantage of it, just mostly small-time investors wanting to make a quick buck or visionaries who saw big potential in bitcoin way back 2009, they literally pumped the coin up until 2017 where we reached pur very first 10k milestone, and even now it is still evident.

That is the most unbelievable part. Now there is a clash of interest between those who were mocked bad by a whole reddit community (Robinohood), those who have been basically drained (hedge funds) and those who made a quick buck (WSB).
To me the most important thing of this whole story is that this showed how much power crowdsourced masses have. Using this huge power for the good or the bad can have huge consequences in the real life. How ready are we for that?

For me there is no particular good or bad in this situation as inadvertently people lost their jobs in ine way or another, but truth be told, people did this out of spite against the greedy bankers and have succeeded, which goes to show how an angry public could affect the tides of the market in a snap of a finger.

[mindrust]

but truth be told, people did this out of spite against the greedy bankers and have succeeded

Did they though? I didn't see Melvin Capital's bankruptcy in the news. Did they hang themselves yet? As far as I know they are still fighting because they know eventually WSB will run out of fuel and the stock will go to zero.

Good news is WSB is now after Silver as I read it from various sources. Not gold but close enough. They see SLV is much easier to push unlike Gold... Makes sense.

This is a whole different game if they are doing it for real. There is absolutely nothing common in SLV and GME. In fact I ordered my first ever physical silver bar today.   I read it here and there the estimated numbers for silver prices change between $200/ounce and $1000. Possible you think?

[freedomno1]

I have a gut feeling that WSB won't be on the winning side when the dust settles. But that's OK as long as RobinHood and the other thieves get punished also.

It really is a mind game someone went into the game theory of it bit complicated kind of like a whitepaper of scenarios for what Bob and Alice will do still not bad overall
https://yudkowsky.medium.com/r-wallstreetbets-is-trying-something-unprecedented-in-history-and-the-medias-not-reporting-it-7ab507e4a038

To me the most important thing of this whole story is that this showed how much power crowdsourced masses have. Using this huge power for the good or the bad can have huge consequences in the real life. How ready are we for that?

A part of me thinks that this generation will be known for trading memes
If your ticker is DNK (Dank) FAP PRN (Etc) an irrational rally may happen ....

[darewaller]

the issue at hand right now is not the late buyers who will get rekt holding the bag but its to squeeze all the hedge funds which shorted GME and cause price to hit $10K or so. Right now they weren't taking the money from the little guy. They were bsaically liquidating the hedge funds shorts and they were the ones who ended up having to buy at a high price.

Then the restrictions started to come into play prohibiting most brokers from allowing trades on GME. Do you think these restrictions were so "Late buyers won't get screwed holding a $10 stock at $500/share"? or was it " To prevent a dozen hedge funds from having to go bankrupt and liquidate all their assets"?

What happened this week is proof that the game is rigged and the little guy will never win.

The problem is, robinhood claimed that they wanted to "protect the retail investor from losing too much" but in reality as long as they are allowed to do what they want and keep doing what they want, they won't lose, only hedge funds will lose.

You know why they closed? The reality is that those huge hedge funds were allowed to short more than 100% available stock, which means if they were to asked to pay it back, they wouldn't have enough stocks to pay it back, which would cause them to lose insane amount of money, they already lost more than 70 billion dollars just due to this Fridays squeeze and that is just the start, we are talking about even more in the future the longer this continues.

But robinhood couldn't provide the same for retail investors, because they couldn't buy more than 100% available stocks, even though hedge funds could short more than available, retail investors were not allowed to buy more than available. That was the real issue on Thursday.