As I write this, Gamestop (NYSE:GME) closed at USD347.5 à up from about USD5 in just August 2020. Meanwhile Bitcoin (‘BTC’) is trending at over USD30k à up from USD1 in April 2011 (which then rallied to a high of USD20k in Dec 2017, lulled down below USD10k in 2019&2020, before shooting up to almost USD42k (Jan 2021).
If you are following these two anarchistic trends that are rocking the financial market and leaving many conventional fund managers scratching their heads, you will agree with me that that all of this is only happening because of a technological empowerment known as ‘Decentralisation’.
The Gamestop phenomenon is entirely enabled by the Reddit-based r/wallstreetbets ‘Decentralisation’ hedge fund that came up from a redditor who started the $GME saga, turning his initial USD50k position into over USD22 million.
Meanwhile, the Bitcoin phenomenon (which also represents the premise of what cryptocurrencies are based on) is entirely enabled by the blockchain, which is basically a distributed ledger based on a ‘Decentralised’ database of transactions.
Who knew that the World Wide Web would make such waves so quickly in the world’s financial stage. From a connectivity set up that spanned the globe, the Internet has been the one technological wonder that has continuously sprung surprises to mankind and the many different societies we live in.
Fast and furious changes are happening in the financial world whereby ‘Decentralisation’ is increasingly fuelled by the reach of the Internet, added on with the maturity of social media to spread information in real-time so as to garner widespread, far-reaching support.
Indeed we are only at the beginning of what will become a fast-paced, roller coaster ride.
When it comes to Gamestop, at this point I honestly think that conventional players in financial systems are stumped and at a loss at how to stop the bleed. Personally, it’s been highly entertaining, just like watching an exciting movie while stuffing myself with popcorn…
And in terms of Bitcoin and cryptocurrencies, the last two years 2019 and 2020 have allowed the more progressive financial institutions to better access how decentralisation technology can play to their favour. We are seeing serious participation by fund managers in crafting out Bitcoin-related investment options and offerings, and large corporations shifting their money-making fundamentals to crytocurrencies and/or blockchain backed initiatives.
Back to Gamestop, the obvious effects is this: In just a couple of months, much capital wealth has been shared around with many other common folks around the world who respond to the its Robin Hood-themed, crowdfunding-like call.
Many larger institutional players and hedge fund companies are losing millions from the short squeeze (which they have always been profiting from), with Melvin Capital in particular, which as of today, reportedly requiring a whopping USD2.75 Billion cash infusion after this GameStop rally.
Somehow, sometime, I think the Gamestop craze will end or at least evolve to another stock…but in the meantime, it’s good to observe (or maybe participate if you have the money) how far this goes.
IBB Just Saying… : Overall, I see it as a good thing that decentralisation gives the power back to the people. As American Democrate and Congress lady AOC tweeted “Gotta admit it’s really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino. Anyways, Tax the Rich’ … to which, I totally agree.
