For those who don’t know yet, Gamestop has seen an event happen to its stocks that will probably go down in the memories of traders of the world. The company saw a successful short squeeze occur after its stock price pumped above the $370 mark. This has caused some within the crypto industry to start to press harder for decentralized finance.
Gamestop Becoming A Battlegrounds
The amazing fact was that Gamestop saw its trading stock handle for less than $20 apiece just earlier this month. However, r/WallStreetBets had its members realize that a hedge fund was busy attacking the company, as it had disclosed a large short position within the stock.
Reddit, in quite an interesting development, coordinated and pulled up a successful pump of the Gamestop stock. Individual traders executed pump trades across discount trade platforms such as Robinhood and TD Ameritrade.
This caused Melvin Capital Management, the hedge fund targeting GameStop, to suffer an eye-popping loss of $3.75 billion due to being forced to close this spectacularly large short on GME.
Centralized Authorities Biting Back
As one would imagine, a large number of centralized trading platforms didn’t take too kindly to such a massive upheaval. These platforms promptly put in limits on Gamestop stock trading, with the NASDAQ exchange’s President suggesting that stock trading should be halted on those deliberately targeted by Internet users. NASDAQ is where GME is listed, and the exchange seems eager to give investors a chance to “recalibrate’ their losses.
That wasn’t all, though. r/WallStreetBets saw itself be knocked offline temporarily, alongside its Discord channel being temporarily suspended. The official reason given was due to content moderation issues.
Crypto Space Watching With Interest
As centralized finance is having a lovely little financial protest going on, the crypto community is watching on, popcorn in hand. Mike Novogratz, the CEO of Galaxy Digital, gave his own opinion about the matter. He highlighted how GME’s short squeeze stands as one big endorsement for decentralized finance.
3)these are all symptoms of a growing inequality that is leaving our markets, our political system, and civil society more fragile than they have been in my lifetime.
it makes my more bullish crypto but more importantly more focused and committed to systems change.— Mike Novogratz (@novogratz) January 27, 2021
He highlighted how this revolution had started thanks to the people not trusting centralized authority.
SkyBridge Capital’s Anthony Scaramucci also gave his opinion about it. Scaramucci is the proud owner of $385 million in Bitcoin, and is convinced that the GME short squeeze is a testament to Bitcoin’s future.
As one would imagine, the mainstream finance characters haven’t really enjoyed this event. Jim Cramer from CNBC has actively downplayed the entire event, declaring that it all was just a sideshow, albeit an entertaining one.
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