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The GameStop saga is the best thing that could happen to crypto

Photo of: Joseph Stone
by Joseph Stone

A community was organized in front of Wall Street to support the GameStop title. The broker Robinhood decided to intervene, in favour of the financial markets, according to its detractors. And this episode would lend even more credibility to Bitcoin.

Would the all-powerful Wall Street be challenged? Last week, individuals were organizing themselves on the Reddit forum to put obstacles in the way of these financial players.

The Internet users were more particularly attacking the practice of hedge funds betting on the decline of securities. And this battle revolved around the value of a video game retailer, GameStop.

To speculate on the stock, Reddit members relied on Robinhood’s trading services. Through their coordination, they managed to make Wall Street lose significant amounts of money.

Robinhood responded by imposing restrictions. For its critics, the company chose its side, namely the financial majors against the individuals. In any case, the affair is widely reacted to in the United States.

In particular, the American Congress announced that it would hold hearings to shed light on stock market practices, including short-selling. And the stock exchange regulator is also getting involved.

The SEC expressed its concern about “the extreme volatility of certain stock prices in recent days. “The SEC is expected to rule on the dispute between Reddit users and Robinhood.

“The Commission will carefully examine measures taken by regulated entities that may disadvantage investors or unduly impede their ability to trade certain securities,” a spokesperson explained.

But for many in the crypto industry, this speculative warfare is also a source of lessons for cryptocurrencies and Bitcoin.

“While advocates for retail investors are speaking out against the current structure and practices of the financial markets, it is significant to note that much of the work done in the blockchain business has been driven by these barriers,” considers the Bitfinex CTO.

Anthony Scaramucci, the founder of SkyBridge Capital, also links the GameStop case to Bitcoin. This participation by individuals demonstrates an evolution of the market according to him. “The activity on GameStop is further proof that Bitcoin will work,” he concludes.

For Mike Novogratz of Galaxy Digital, however, this stock market chaos is primarily an argument in favor of DeFi and decentralization. He even sees the GME affair as “huge support for DeFi”.