WallStreetBets and Cryptocurrency
Recently, data on CoinMarketCap shows that Bitcoin’s position must have been endangered by a token emanating from the Reddit group called WallStreetBets. The influence of this group has reached the Crypto industry and a name coin named WallStreetBets just sprang up and has started to spread.
This new coin WallStreetBets represents a coin by the subreddit of the same name which is a decentralized Reddit forum. WallStreetbets popularly known as WSB is a subreddit medium where most Reddit users discuss highly speculative and big market trading ideas and opportunities. It describes itself as “4chan found a Bloomberg terminal” with members who are young traders and investors who buy small and so lack the primary investment practices with little knowledge of risk management skills and so based their decisions on assumptions and gambles.
Wall Street Bets: It's Users
The new coin emerged on the 27th of January on the CoinMarketCap. The coin has attracted enough attention yielding a first-day trading volume of a whopping $100 million. Such trading trends are now on the increase since there is a growing population of no-commission brokers and many mobile online traders. They normally see such high-risk offers as an opportunity to uplift their financial conditions and increase more money in their pockets.
Consequently, a cycle broke out as a result of the frenzy that surrounded the GameStop stock being sold. Many traders rushed in but because they believed that the tactic with Hertz will hold since a few hedge funds were borrowed. Ultimately, there was a rush as the argument was fuelled by eager WallstreetBet users and other traders.
These short-sellers, despised by many, are big hedge funds that bet on a decline by selling borrowed shares in the hope of repaying at a lower price. They often use borrowed capital like student loans to bet on platforms that show popularity within the subreddit community; This influx in purchases has been putting pressure on short sellers to make purchases to avoid steeper losses. Markets have felt the impact of the tussle between traders at the amateur level and hedge funds. So much so that it has been felt all over the world, in major players like United States, Europe, and Asia.
As a result of the adverse effects on the major markets in the world, Robinhood and Trading212, which are mobile trading apps accumulated immense traffic during this time. It was like a flood of amateur retail traders looking for the next big thing.
Wall Street Bet Coin: A joke
So much money had piled into the company, from such a broad array of investors, that the wry smile is giving way to genuine emotions. Unfortunately for traders who have immediately bought coins, it turned out that the coin is just one of a series of jokes by the CapMarketCap team that has played in the past. The team is one of its posts stated that no such assert existed
This in turn had impacted heavily on many companies. The unleash hit many across the political spectrum and society at large; they accused this token “once looked upon as assert” as a scheme to hedge funds and evidence of a rigged system.
Upon the results of this new token, WallStreetBet Reddit channels server went quiet briefly in response to many of its users’ flooding resulting in an influx of discriminatory posts and hateful comments from radio traders. This led to Robinhood making an announcement to cease trades on GameStop entirely. Its British competitor, trading 212 also concurred to this announcement as well as other stocks. The brunt at this point was severely felt with the abrupt changes happening in the financial world. Nokia and AMC were also part of the companies that stopped trades on GameStop in a bid to salvage their reputation and credibility in the market.
Which companies have they helped?
Video game retail store GameStop has been the main target
On Wednesday, January 27, 2021, there was a massive rise in the shares of the company. It rose to 130% which was owed to the push by users in the Reddit group.
This happened because the short sellers were put under pressure by the buying power of the WallStreetBets users. These followers bought so much on GameStop that it pushed the shares up that short-sellers had no other option than to me more purchase to mitigate their losses.
The struggling video game store's shares are up a total of 1,700 percent since the beginning of January, from $17.25 per share to $347.51. Evidently, Wall street trollers are on the hunt for GameStop and other companies as well.
The stock skyrocketed for other companies that had been heavily shorted by Wall Street firms as well.
The struggling video game store's shares are up a total of 1,700 percent since the beginning of January, from $17.25 per share to $347.51. Daily Mail reports that three companies with major investments in GameStop have made $3million as a result of the stock prices rising.
How r/wallstreetbets made headline news
In January 2021, with the pandemic raging and financial instability abound, the sub grew to previously unimaginable heights.
Within the space of a few days, it has gained more than two million subscribers and more comments. This is according to subreddit stats, exposing that the posts have gathered a whole lot more traffic than they used to.
The people have now taken over, driving the purchases of stock through the roof. GameStop now has a higher valuation with many more people interested in its stock. The efforts of r/wallstreetvets cannot be forgotten during this time as they pumped the price of GameStop’s stock from $40 to $492.
The ban caused a lot of outrage as heated arguments and conversations filled social media and added more to the discussion on finance in the world.
Many will also attribute some of the remarkable changes that have happened recently to the tweets of Elon Musk. The ode of investing has been altered dramatically within these few days. Hence, people are now being careful with investing their money.
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