Wall Street, the Stock Market, and the legacy of institutional trading has had very little competition or disruption to its status quo in over 100 years. When Bitcoin broke through and started challenging banks, financial institutions and even the Wall Street-types, there was a lot of scoffing at its potential.
However, the battle between Bitcoin and Wall Street has abated as the major investors and institutions have come around to purchasing Bitcoin — but mostly on their terms through the likes of CME, Baakt and Greyscale.
However, a new challenger has emerged to upset this status quo, and it seems that the sub-culture of millennial, Reddit-informed, new blood investors who have cut their teeth on crypto have taken to the stock markets.
A war is raging between the lofty hedge fund managers and the common people with the former alarmed at the power of group-think and mass mobility. Having pinned GameStop and a few other seemingly obsolete stocks as their banners, Redditors are using crypto-buying tactics to short squeeze the life out of a number of Wall Street-types.
Not playing fair
There is a taste of one’s own medicine going on in the current battle between the Reddit investors and those who tried to short GameStop. These funds usually find a stock, short it, and do all they can to gain momentum in driving its price down.
Now, the same tactic has been worked against them, but in reverse, and with the power of a decentralized group of people connected only through digital likeness — and Wall Street is not happy.
Cryptocurrency buying and trading principles are being touched on here as the power of a global, digital group — fed up with how the legacy of finance has been handled, is looking to make their presence felt.
But, there is a fight back coming as limitations to buying up the shorted stock is coming in from centralized entities which again highlights the need for crypto and the decentralized and level playing field it brings.
After tweeting about “unprecedented volumes” that “may be causing limited access,” TD Ameritrade simply restricted client trading for GameStop, AMC and other securities “in the interest of mitigating risk for our company and clients.”
Nasdaq CEO Adena Friedman told CNBC Thursday her firm actively monitors social media chatter and will halt stock trading if the content it sees matches with “unusual activity in stocks.”
Bloomberg reported that Wells Fargo also banned its advisors from making stock recommendations on GameStop and AMC Entertainment.
Government officials and regulators are also watching. The Biden Administration’s economic team is “monitoring the [GameStop] situation,” White House Press Secretary Jen Psaki told reporters Wednesday afternoon. The Securities and Exchange Commission (SEC) also released a statement Wednesday evening saying it is “aware of and actively monitoring the on-going market volatility in the options and equities markets.”