The GameStop affair: the start of an ascent for cryptocurrencies?
Using Reddit and social media, amateur traders have coordinated their efforts to buy GME stock and drive up the price.
Robinhood has blocked the option to buy GME and other stocks considered volatile.
It will therefore be more complicated to manipulate the market
As the cycle of crazy news on GameStop and WallStreetBets continues and becomes more and more unlikely, I have started looking back to try and make sense of what is going on.
Pyrrhus, in ancient Greek, was „more tyrannical than majestic,“ according to Plutarch. This business of amateur traders, GameStop, cryptocurrencies and hedge funds, reminded me of Pyrrhus.
(Note: Pyrrhus was the Hellenistic King of Epirus whose military successes against Rome and Macedonia resulted in the commonly used phrase “Pyrrhic Victory.” This is why it can be applied to the GameStop and WallStreetBets triumph. .)
At this point, everyone knows the story. Amateur traders, whose numbers have grown during the pandemic thanks to more free time and easy-to-access apps like Robinhood , have found that a number of hedge funds have taken short positions on Bitcoin Billionaire, a few other stocks, and some cryptocurrencies.
Using Reddit and social media, amateur traders coordinated their efforts to buy GME stock and drive the price higher . The result (at one point, a 1,700% increase), caught the world’s attention.
It was David against Goliath, in the middle of Covid! The pandemic has created record inequalities in the United States. The rich got richer and almost everyone was left behind. This could draw attention to cryptocurrencies.
Robinhood gives up
So you thought this GameStop affair could be a good opportunity to get up to speed. With all of this information, it would be difficult to interpret what happened as anything other than deep tensions that could lead to more dangerous things.
How was the situation handled? Robinhood, the app named after the hero famous for stealing from the rich to give to the poor, blocked its users‘ option to buy GME and other stocks the company saw as volatile.
While amateur traders could no longer buy, hedge funds had free rein to sell, which allowed them to optimize, lower the price and hedge their damage. Robinhood’s excuse? It depends on when you ask them, why not turn to cryptocurrencies?
Robinhood CEO Vlad Tenev initially denied that the company had shut down due to cash flow issues , only to change his mind a few days later. You would think that sort of thing would spark outrage, even investigation. While voices from all walks of life spoke about what was going on, there was also something quite disturbing.
Jimmy Kimmel looks for those responsible
An example can be seen on Jimmy Kimmel’s US Tonight Show on Friday, February 5. Describing the GameStop situation, Kimmel said :
“Despite a sharp drop in sales, over the past six months the [GameStop] share price has risen 8,000% because a group of amateur investors, possibly even Russian disruptors, who are doing part of a Reddit community called WallStreetBets, decided to buy a lot of stocks, and therefore to raise the price and beat the hedge funds that had taken a short position in the stock ”.
Now, giving Kimmel the benefit of the doubt, I’ve tried to find articles mentioning these potential “Russian disruptors” behind the GameStop manipulation. Not only is there no mention in all the major media, not even the small media published anything about the Russians.
So how can Jimmy Kimmel – as we collectively revel in the visible damage caused by the spread of conspiracy theories and fake news – can come before his audience of millions of Americans and suggest without any evidence that he is was the work of Russian saboteurs?