The modern world is a place where sensationalism and the ability of a story to virally spread itself are the most important means of propagating any information. While this was true for most of history in some shape or form, presently the same approach is gaining strength in virtually any domain of human activity. Even fields like the global economy or the stock market, which had their share of sensationalism but rarely one that captured the public imagination are now entering the same process in full speed mode. In a world that is infused with esports, social media, and video streaming services, having a catchy financial story is more important than ever was to make people take notice.
Presently one such story is developing in front of a global audience. This is the story of Reddit and of the GameStop stock stellar breakout blending into a singular incredibly weird but incredibly entertaining narrative. As it unfolds, the sheer strangers of the story are also adding their weight to a different strange domain – cryptocurrency. In fact, the story of GameStop could be one of the strongest allies and it comes to bitcoin and cryptocurrency adoption in this strange period.
The story of the GameStop stock and its performance is one that would baffle anyone not from 50 years in the past, but only from five or even less. It shows a changing landscape of new generations coming about and offering their take on the very strange and unjust world they are inheriting. In this case, the generation that makes up the relevant group is that of mainly Millenials and Z Gen. Both groups are avid Reddit users, which is the biggest internet forum in the US. On it, a subreddit called WallStreetBets is a place where individuals interested in stock trading converge.
However, they are also interested in many additional things and those feature things that would be familiar to most of their peers. Among them are memes and trolling, so much so that even the official description of the subreddit claims that it is something like the notorious 4chan board but only found on a Bloomberg stock trading terminal. Now, the same forum decided to act and act fast when it comes to an investment that a few – if any – would consider taking on. This Kickstarter is an investment mania that spreads fast and wide.
The target for this group was none other than the stock of GameStop, a chain of gaming retail stores that have been performing badly for years. However, with the influx of sudden and big investment funds from WallStreetBets members and their constant hyping of these stocks, the fortunes of GameStop suddenly changed. From a price of around 4 USD, the value of the stock shot up drastically in a space of several days, bringing it to a range of 350 USD. Because of that, a number of hedge funds that had logical bets (up to that point) against GameStop suddenly found themselves in a squeeze.
The same squeeze only got bigger and bigger, which meant that some of them went under and needed to get private bailouts. This was the moment when the mainstream media got wind of the same event and it also began its involvement. In a matter of days, the hashtags related to this ongoing event and the amount of chatter on social media became one of the dominant global topics. That discussion is at the same a very important moment for cryptocurrencies in general and the alternative they provide to the global investment domain.
Anthony Scaramucci is a well-known name from the US finance domain for many years. However, back in 2017, he gained further fame – or negative publicity, depending on the political alignment of the beholder – when he briefly worked as the director of communication in the White House under President Donald Trump. Today, he is again firmly rooted in his primary financial profession but is also an outspoken voice about the state of the industry. In a recent interview, Scaramucci stated that GameStop is actually one of the phenomena that were rarely seen in the past of the US stock market.
It features the occurrence of strong individual trader market actions in a domain that is not otherwise saturating the main news media cycle. That includes, like now, individuals organizing in large numbers to buy stocks of a relatively unknown and unsuccessful company and flipping its value drastically almost overnight. That is all familiar to anyone working or trading inside of the cryptocurrency domain. Because of that Scaramucci believes that bitcoin and other digital currencies will profit greatly in terms of adoption and activity with this trading mentality. It also, according to him, has additional perks for this specific and decentralized financial ecosystem.
Serious Potential in Small Activity
A further point that Scaramucci makes is that these investors are broadly incredibly decentralized. In the case of Reddit, they follow a single online forum, but then spread that message far and wide using a range of social media, often completely on their own initiative. Yet, the excitement is unmistakable and any market drives activity from that. An additional element here is the fact that trading many takes in the low-cost, mobile-based systems like Robinhood. That makes the speed with which the actors in this take their activity to the markets a lot more flexible.
All of this, in turn, revolves back to the idea of DeFi or decentralized finance. That alone is a small financial revolution, but when it is combined with the notion of millions of small traders acting either in unison or individually, DeFi gets a whole new and much more powerful role. Throughout all of this, cryptocurrencies are the only natural ally because they offer the same level of full decentralization and space where the market truly does all of the correcting. With those concepts, anyone who loved the GameStop stock story is bound to find crypto trading equally appealing and interesting. That is precisely what cryptocurrencies presently need.