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WallStreet is changing the crypto system. What happened to GameStop and Doge?
"The illusion of freedom will continue as long as it's profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater."
Frank lays bare the situation we found ourselves last week. We, the regular people, the tens of millions of Americans who don't know how high frequency trading works and don't have access to the Fed money printer, have been baited with the illusion of freedom and a voice in the system.
There's a lot of great articles and Twitter threads explaining the situation with WallStreetBet and their coordinated "investment" into GameStop. In brief, thousands of retails traders bid up the price of GameStop, causing a heck of a lot of financial pain to the hedge funds that had shorted the stock. Most famously, the hedge fund Melvin lost several billion dollars and was forced to closed out its short position. Retail traders one, hedge fund Melvin zero.
If WallStreet and the United States government, which too often feel like the same thing, were smart, they would have ask a few questions like;
Why are the WallStreetBet traders willing to risk so much capital just to prove a point?
Is this just a game, or is this indicative of a larger underlying problem in American society?
Should we speak to this community to find out why they're doing this and how we can change the corrupted system?
But no, instead of asking questions, WallStreet brought the hammer. Something must be done. They demanded on live television. And indeed, something was done.
Robinhood, TD Ameritrade and other platforms have all blocked users from trading GME, AMC and a few other popular stocks. This was done without due process or a consideration for the retail traders and investors. And it's game over, it's like saying thanks for playing, try again next time.
One side affect of the suppression is that it proves why decentralization is so crucial.
The shutdown if GME and AMC trades makes a great case for why DEXes or decentralizedexchanges are no longer just nifty toys but genuinely important infrastructure.
The driving force of DeFi is that you can't have your account closed, you can't be blocked from a trade and you can't be censored by the billionaires.
Nathaniel Whittemore captured the moment when he said, "This is not about GameStop, it's not even about Melvin and it is not about Robinhood. But it is about power. Who has it, who is fighting to reclaim it and what we are going to do to help".
This is an emerging ongoing story so I'll do my best in the next article to help keep you updated and with that short history, we have almost caught up to the present and logical place to go for millions of people after WallStreetBets broke the facade of the "open and fair market" - crypto.
And since this is a story that started on Reddit, the first stop is everyone's favorite shibe - DOGE.
How does a Doge becomes a millionaire? It's not a trick question and the simple answer is, you get a bunch of redditors to break WallStreet.
Last week we saw the curtain pulled back on how the rules for WallStreet hedge funds don't apply to everyday retail investors on main Street, and once the Redditors were finished with the wolves, they made their way right back to the dogs, and I mean Doge.
In the Thursday night of January 28, 2021, DOGE ran up a cool 887% in just 24 hours. That up is something like 100 years of average stock market returns, in one day. Epic!
Of course, whenever anything goes up over 800% in 24 hours, there's bound to be a correction. And that correction comes at a cost, sometimes that cost is being the victim of your own success. And I've been seeing a meme already about how DOGE broke crypto (LOL).
It's been a wild ride, and if there's one key point, it's that you shouldn't underestimate the magnitude of what WallStreetBets did with GameStop.
The time has come for change, and this could well be the first awkward step toward a new system. And we have already seeing the waves approaching in crypto.