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The GameStop Stock Craze is Basically a $20+ Billion Ad for Bitcoin
This week, the world saw something take place that has never happened before. A Reddit-based chat room got together, and launched a coordinated attack on wall street hedge funds.
It was a way of fighting back against corporate greed, and (remarkably) it worked… The response from the platforms this was taking place on was exactly what we were expecting, but not what we wanted. These platforms started shutting down the trades, stopping all further activity of its kind from taking place. This sort of action is only possible within a centralized ecosystem.
There has never been a stronger marketing campaign for decentralized systems.
Markets Open for Wall Street, Closed For Reddit
The kind of trades that the wall street hedge funds were executing were fraudulent in nature. I’ll name it, but I won’t explain it as I want to keep you reading, instead of bore you with financial jargon like “Naked Shorts”. To put it simply (really simply), they were betting against certain stocks, one being GameStop (GME). This means when the stock goes down, the wall street traders make money.
The Redditors from WallStreetBets identified these Naked Short positions, and devised a scheme to play hard ball with the folks in the big league. Buy the stock, drive the price up, and force Wall Street to lose their bets. This is exactly what happened, and what was the response? RobinHood closed the trades on GME, BB, NOK, BBBY and a number of other stocks that WallStreetBets were targeting.
Taking a step back to analyze, what happened is that trading companies and the government are happy to keep doors open for fraudulent trading. However, when a group of teenagers and hobby traders on Reddit get together to coordinate a trade on a meme stock, that’s when the red flag gets thrown. This is a double standard that only exists in centralized systems. This is financial censorship.
What is Decentralization?
Anything decentralized is absent from centralized control. There are pros and cons to a system like this. Learning about decentralization is actually really important to understand Bitcoin (and other cryptocurrencies) on a macro-level. In order to learn about decentralization, I find it useful to invoke concepts that most people are already familiar with; Government.
Democracy is Decentralized Government
When we think of forms of government, we can name many. Monarchy, Dictatorship, Republic, Democracy, Oligarchy.
“Democracy is the worst form of government, except for all the others — Winston Churchill”
The reason why democracy works (more or less) is because two things are distributed amongst the participants. Control (Power), and Trust. However, democracy is very slow at moving policy forward, and progressing in general. So much so that it may be the very thing that makes the system fatally faulty.
On the other hand, policy moves very quickly underneath a dictatorship because Control (Power) is centralized, and trust is enforced rather than mutually held. Decisions are made unilaterally and at the will of the entity in power. Most of us don’t need a history lesson on the woes of installing a dictatorship.
Bitcoin is Decentralized Finance (Money)
Even though we have a decentralized government in the western world, we still have a centralized financial system (money). The evidence is mounting that our centralized financial system succumbs to the same shortcomings of that of a dictatorship:
- Manipulation: Modification of interest rates
- Unilateral Decision Making: Printing of trillions without populous consent
- Censorship: Institutional suppression of activity such as Reddit traders
Bitcoin was designed from the ground up to be decentralized money. There is zero ability for the network to be manipulated, for decisions to be made unilaterally, or to have any of its users censored. In essence, it is a money designed for a true democracy.
What we have right now, is a centralized monetary policy. We need democratic money, because that’s a money that works for all people, rather than just the highest classes of our society.
Why Am I 95% in Bitcoin?
The events of the last couple of weeks is a perfect illustration of why I have 95% of my wealth in Bitcoin. It is the same reason why retail traders all over the world bought GameStop (GME) stocks last week. It’s out of total disgust for the current financial system we find ourselves in.
The difference between GME and Bitcoin is that Bitcoin is money, and thus the foundation of a sound financial system. GME is a stock on the stock market that traders found they could take advantage of. The WallStreetBets crew realized that buying GME was a way to take down the hedge funds.
What happens when these same traders, retail investors, and the average individual all over the world realize that buying Bitcoin could do the same thing to the financial system at large? In my opinion, WallStreetBets, and GME is the battle, Bitcoin and the USD is the war.
The Best Advertisement for Bitcoin
If it is not clear to you why we need a decentralized foundation to our financial system, then you haven’t been paying attention last week. Centralized entities won’t hesitate to protect their interests, or the interests of their business partners. Who can blame them? That’s what businesses are supposed to do.
When there is a systemic double standard against the retail investor, that’s when there is a problem. Bitcoin represents a system where censorship is impossible. Where there is no bias, no favoritism, and no handouts. No money printing, and no Cantillon Effect. This week was a billion dollar advertisement campaign for Bitcoin, financed by RobinHood, and Wall Street.
Disclaimer: This article is for informational purposes only and does not express the opinion of CryptoVantage. It is not meant to be taken as advice to buy, sell or invest in cryptocurrency.
