Topic: The GameStop drama and what does it mean for Bitcoin - page 6. (Read 1435 times)

Investing in FTX won't do much to fuel the stock squeeze however. The squeeze happened not because people were buying the stock but because people were buying the options far out of money. The far out of money call options like $60 call were very cheap. However the chance of GME hitting $60 when it was under $20 last month was a rare event. So market makers sold them cheap but those WSB bought the far out of money calls anyways.

And what happened was a gamma squeeze pretty much. The closer that price got to $60 the more the market makers had to buy to remain neutral in their position. So each contract is 100 shares. Hence if someone bought 100 contracts back in early Jan or late Dec, the market makers would need to buy up to 10,000 shares for that 100 contract position. Multiple this by thousands of contracts and you got your short squeeze.

People buying 1 or 2 shares, won't make any difference what so ever. Its people buying hundreds of call options far out of money made the biggest impact.

Now Robinhood users who wanted to trade GameStop stocks can do so on the FTX exchange https://ftx.com/trade/GME/USD

The fall of Robinhood is evident, it is a self-destruction, the corruption was noticed. There will probably be a user exit from this app. Those who invest in stocks will be looking for havens in cryptocurrencies and will be realizing that decentralized applications are better and more secure.

It's not that they trust financial institutions, the people that trade in those does not really have that much choice in the first place. I really don't like that move that they did with the halting in the trading because that is a good indicator that those same institutions are not meant to make people money but to be hedge only for the big money people. Good for those hedgehogs that they got their asses handed even just for this time. If this cycle of blatant abuse by financial institutions halting trades because people have been talking about it, then some people will migrate to different market and one of those said market is bitcoin market.

Yes and no.

While I don't see r/wallstreetbets joining the crypto crowd any time soon I do believe that the stunt that Robinhood / Citadel will serve as a nice reminder why decentralization is important.

This will not lead to significant market decentralization now or next year, but it may prime a major disruption the way the banking bailouts primed Bitcoin.


Edit: This interview with the Winklevoss Twins seems kinda relevant at this point:
https://www.youtube.com/watch?v=ugkLNEhvj-Y

On one side, you got a (or a few) hedge fund(s) that think this company GameStop is overvalued because they are closing their branches because retail took a big hit because of covid and that makes perfect sense so they decided to short GME... I don't see any problem.

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?

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The other side of the story as you know... r/wallstreetbets.

What these guys are doing is simply manipulation. But it is no more manipulation than what the hedge fund was doing I mentioned above. This company has zero worth. It is going up because who gives a fuck? Because memes, because yolo.   I am perfectly OK with this logic because we live in 2021. That's how things have been for a while.

If somebody wants to buy a worthless stock from $500/share, that's his right. Let him do it.

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Now the ugly side... Robinhood banning "buys". That's going to trigger a major shitshow.

Some hedge fund gets burned because some people act retarded? That hedge fund shouldn't have wagered more than they could afford to lose. Nobody should give a fuck if they get deleted. Haven't that hedge fund heard the saying "markets may stay irrational more than you could stay solvent" ? Now they know it.

Just because you did your homework and had a good analysis, doesn't mean that you are going to profit from that analysis 100%. If that worked like this Barcelona would win every game they played.

They can simply stop giving a shit about stocks and other regulated and rigged shits out there and move to DEXes, plenty of liquidity there 

Nice live covering of drama at https://www.youtube.com/watch?v=u6gAgHA06sc

Little bit of a crash for the robinhood traders, so sad! When you trust large financial institutions with all your money and expect them to play fairly, do they really have a leg to stand on when they get fucked over?

Not much sympathy here.

DeFi is only a tool for trading alts, DEX have extremely low volumes. Until companies start tokenizing their stock, you can forget about smart-contract based stock trading, and so far no major company is willing to do it. This was actually the premise of ICO hype - that stocks will move to blockchain, and we see how it ended.

The only way I see crypto benefiting from it is if WSB crowd will decide to invest in Bitcoin as a form of protest against Wall Street, which I think is still a bit far-fetched.

You know how I see it? I see it as the general public slowly starting to opening its eyes to the evils that some corporation and entities have committed to us in the past couple of decades, this is our payback. Sure they may have lost millions, even billions of dollars but where did this went to? Our pockets, where we can make use of it more unlike these wall street bankers who will just hoard it all anyway.

https://www.reddit.com/r/wallstreetbets going parabolic with new members    Regardless of how this all will end, I think DEX and DEFI will be the next big thing for many non-crypto investors and traders. Very likely the whole crypto sector will get a boost. BTC nicely hodling 30k so it is about the right time for bullrun continuation. Watch alts, especialy DEFI tokens!

The U.S. are the Motherland of Capitalism and will it be forever and ever. period.

there is no chance for any other country to replace it even not for the CCP.

Gme had alright revenue though, they just didn't have a good profit margin. There's a small chance they could bounce back with something, I heard a company in a similar position released more stock and managed to recover from the extra money (or something like that).

The thing of RH closing kinda shows how centralised the exchanges are (especially for small cap stocks like this. One of two international exchanges stopped trading it and the rest just followed (even cross continent).It also didn't seem to be listed in premium exchanger services (ones you pay a fee per trade and a maintenance fee on the account...


They (retail) didn't actually do anything illegal though. Enough people in legal spaces have said as much and how do you know they traded exactly off that reddit post? Like they could've had a volatility alert from another site or seen "top gainers" for a certain period. As long as the original entity didn't not give disclaimers and a disclaimer wasn't given for the board (where either could've been considered necessary) that'd be the only thing considered prosecutionable.

On the other hand, exchanges closing and actively reducing volume would be a reason to sue. As well as there being some volume on there even though most (I can't find one that was open in trading hours) are closed.

Yeah you can’t get over with this unnoticed, it’s great to made a film out of this, may be write an entry on the wiki, or take the headlines and slap it on a block chain genesis block, that’s more funny than what CSW can possible created.

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


also,

"Robinhood hit with class action lawsuit after it restricts GameStop stock" https://finance.yahoo.com/news/robinhood-class-action-lawsuit-gamestop-191704848.html

brb, gonna buy more popcorn cos this about to go wild really fast 

Those guys do not know what they are doing, that is illegal and while we see a lot of this in this market that is because you can trade with an anonymous account or use decentralized exchanges and avoid any kind of prosecution, they had to use their real identities when making those trades and the SEC will go after them and make an example out of them, I really do not think they have any idea of what they did, this has shaken the confidence in the markets and the SEC will be very hard on them in order for that confidence to comeback.

Haha the Gamestop thing is really the funniest thing I have ever seen in my trading life. More interesting thing is that how tables have turned and retail investors have beaten up the big guns. But coming to cryptos about this. It isn't really a great alternative too. You see shares are just like cryptocurrencies and not like fiat. You cannot create or destroy shares just like that. There can always be a certain number of shares and an increase in supply requires proper approvals which would not affect the current market capitalization.

What happened in Gamestop can happen with any crypto exchange too or might even be already happening. Cryptocurrencies are traceable only until we trade them on decentralized platforms once we create synthetic future contracts out of them which most of the exchanges do these days there is almost no calculation and accountability left to do with cryptocurrencies too. It becomes pretty much like any other derivative. But yes it has raised a lot of questions on the working of these hedge funds and exchanges.

And Robinhood was the first one to react with what the retail investors are trying to do. It's ironic at best; Robinhood works for the rich and not actually trying to help the poor lol. But anyway, this is a pump and dump made in the open, and it would not be complete without the SEC slapping the hands of the mischievous traders who started this trend and made millions or even billions of dollars flow into the hands of the unlikely parties. While it's fun to watch the old school stock traders getting wrecked off of their shorts, this still isn't right and it still falls under market manipulation and someone has to face the repercussions of their actions.

It's a great week for the US' stock exchange scene. There's literally never a dull moment on the Land of Opportunities, even if Trump is already out of the frame

Market manipulation at it's finest, those Hedge Funds know they have to close their shorts on Friday and are doing the best they can to restrict trading for retail investors
They paid all these firms or are real cozy with the exchanges it's suspect as hell.
I hope they all pay for this and get their funds walloped

Think of this as a response to 2008 and the damage Wall Street caused at the expense of the bagholders and how many lives they messed up.
People are looking for blood.

For Crypto this is probably going to become the Cyprus event for Bitcoin towards DEX
Decentralized Exchanges will replace those cabals and this may just be the match that lights the fuze.

That old-school centralized financial structure only came about because there was so much abuse in the stock market in the early 1900s (and earlier).  I can't stand it when a stock exchange halts trading for whatever reason, because to me that's a slap in the face to free markets--but on the other hand, if there were no rules traders would wreak havoc on the market, especially with today's technology.

I haven't been following the GameStop situation, but I heard something about it on Bloomberg.  As far as it relates to bitcoin, I don't think it does. 

One thing I love about crypto is that markets are open 24/7 and right now there really isn't a lot of regulation on exchanges.  But I'd hate to see the stock market go back to the days when pump and dump groups were par for the course (as in the days of Jesse Livermore).  I just wish the stock market was open 24/7 and that trades didn't have to take 3 days to settle....but that's how it is.

thanks man for the link!