Earlier this week, Elon Musk made history when he put his full support behind Bitcoin (BTC) during a clubhouse stream. Speaking to Robinhood CEO Vlad Tenev about Bitcoin and the GameStop debacle, Musk said, “I’m late for the party, but I’m a Bitcoin supporter.” This happened a few days after Musk changed his Twitter profile and added added “Bitcoin” to his biography.
Interestingly, Musk’s public support for Bitcoin comes at a time when old financial markets have been openly caught defrauding their own customers, and the Robinhood app is at the center of that scam. In fact, the richest living man in the world said he believed Bitcoin was about to be mass adopted against the backdrop of criminal stock market behavior.
The GameStop saga
For those unfamiliar with these events, the GameStop saga is a “David and Goliath” story that began with a community of online retailers on the r / Wallstreetbets subreddit bringing hedge funds to a standstill – with institutional short orders in the billions. A short order is a type of order that investors can use to benefit from the decline of a company.
After retail investors discovered that GameStop hedge funds had shorted GameStop to 150% of their total public stocks – meaning more stocks than existed – a group of 2 million (now 8 million) Redditors found that hedge funds were buying those stocks and not sold short-circuit GameStop would lose billions. And so it was. The loss was $ 19.75 billion by January 29, when the power of the internet took hold.
However, once retail investors began to win, the far-reaching tentacles of centralized companies could completely stop the game and freeze trading on major exchanges and trading infrastructure, allowing hedge funds to be repositioned without losing it all.
Decentralization and the “American Dream”
Indeed, one of the greatest fictions of our time is the history of free markets. This concept embodies the “American Dream”, and anyone who follows their dreams can do so (at considerable personal risk). This includes the ability to be rewarded (or punished) for participating in the financial game, which should function according to strict rules.
Whether it’s high-frequency trading, synthetic derivatives, infinite money printing or a combination of all three – the exchange rewards a handful of insiders who play the system and play by different rules than everyone else.
It is important to know that this is not about the game itself – free markets are the most efficient way of properly transferring value when done correctly. The problem is that rules only apply when institutional players win, otherwise they can be broken, suspended and revised with minimal consequences for those with friends in high positions.
This got many Redditors to the point where, knowing the market is rigged, they didn’t care about losing money assuming hedge funds are losing billions. It began as retaliation against those responsible for the 2008 financial crisis and the misery many suffered as a result.
This Reddit post paints a good picture of the motivations that have inspired millions of people to band together against crooked financial conglomerates. Of course, other motivations – such as profit motives – undoubtedly played a role as the market fed on its own self-reinforcing mechanisms. Regardless, the true colors of the system are now visible to all.
And while older financial media have tried to steer the narrative in a certain direction, the truth is that this story is apolitical and exposes the fact that everyday people are not allowed to win. Regardless of the intentions, the stock market is shown to be a means of entrenching and exacerbating poverty in a rigged game that only benefits those who are already rich.
The beginning of a journey
The journey doesn’t end there, however – because there’s a parallel system that isn’t controlled by Wall Street or the central bankers, and it’s growing as we speak. With a market capitalization of over $ 1 trillion, cryptocurrencies are quickly becoming the new frontier for financial markets with no loyalty.
Aside from being a new technology that is democratizing the markets, there is now a crystal clear reason for investors to sign out of the old system and jump into the new one.
Bitcoin started this revolution 11 years ago and doesn’t stop there. A completely new financial ecosystem is being built on Ethereum from the ground up, from which a wealth of decentralized financial products with various compromises and use cases have emerged.
Around this time last year, capital in DeFi products hit the $ 1 billion milestone. According to DeFi Pulse, that number is approaching $ 30 billion today.
Against this background, the future of the financial markets seems closer than ever.
This article does not contain any investment recommendations or recommendations. Every step of investing and trading involves risk and readers should conduct their own research in making their decision.
The views, thoughts, and opinions expressed here are the sole rights of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Christopher Attard is a journalist turned cryptocurrency writer and analyst. After working in both blockchain events and traditional finance over the years, he now reports in detail about Bitcoin in a bi-weekly newsletter. Christopher also works with various small and medium-sized businesses as a content strategy writer and consultant.