Crypto investors upset over Bitcoin’s price dropping by $10,000 in a matter of days could learn something from the members of the WallStreetBets subreddit, who have dutifully pumped the price of GameStop’s stock this past week.
Today, following the temporary halting of trading for GameStop on the New York Stock Exchange and trading apps like Robinhood blocking purchases, this ragtag group of several million day traders watched the stock’s price go from an open of $263 to a high of $492 and then all the way down to a close of $193.
They took the hit as if it were a walk in the park.
Why? Because for many of these traders, it isn’t about the money—or, at least, not just about the money. It’s about a collective effort to give Wall Street the finger and hit hedge funds, specifically those who took out short positions on GameStop, where it hurts: their pocketbooks.
GameStop is a company specialized in selling physical copies of video games. The business was good but declined as digital content distribution boomed and as online retailers beat out mall-based businesses.
Over the years, several institutional traders started short selling its stocks with huge leveraged positions, generating a downward spiral for the stock price. The company’s stock went from around $45 per share to less than $5 in 2020. The people on r/WallStreetBets took notice and pitted themselves against the big, bad capitalists who opened shorts, such as Melvin Capital and Citron Research.
Chart of GameStop stock from 2012 until just days before the pump.
GameStop stock from 2012 until just days before the pump. Image: TradingView
The self-organized army started buying up huge amounts of shares, driving up their price in a matter of hours. The hedge funds, backed by millions in capital, initially held out, but they were no match for the millions of retailers united. At least two major funds had to close their positions with huge losses—although one of them, Melvin Capital, received a $2.8 billion bailout shortly after that.
GameStop shares today opened at $265 and rose all the way up to around $480. After the spike, news came that the Robinhood trading had barred further buying of the stock. GME subsequently crashed to $113 before rebounding somewhat. In normal times, that would be enough to spook any investor back into complacency. But judging by some of the responses on r/wallstreetbets, it’ll all be worth so long as the big guys go down as well.
“Call it an opportunity, call it revenge, or justice, I know we are on the right side of this. I’m proud to be holding next to you fellow brothers and sisters in arms. I will not sell,” said user u/Zdubzz19. “I will hold until Melvin and Citron and any other fucker who think that they can get away from the inevitable by using dirty tactics and mis-information to [deplatform] us fails at their own game.”
There is no technical or fundamental analysis to explain this. There is no sentiment analysis around the $GME stock. It all seems to be primarily driven out of resentment—a collective vendetta against the big capitalists.
When GameStop’s stock goes down, these retail investors could be wrecked, but they don’t think they need a bailout—no matter what Robinhood says. Today many of them gladly embraced the losses as a sort of necessary evil to send a collective message.
One user wrote a missive to Melvin Capital, calling “a firm who makes money off of exploiting a company and manipulating markets and media to your advantage. Your continued existence is a sharp reminder that the ones in charge of so much hardship during the ’08 crisis were not punished.”
The user, u/Ssauronn, continued: “This is personal for me, and millions of others. You can drop the price of GME after hours $120, I’m not going anywhere. You can pay for thousands of reddit bots, I’m holding. You can get every mainstream media outlet to demonize us, I don’t care. I’m making this as painful as I can for you.”
So, losses don’t seem to bother these people, who see every red candle as one more provocation that boosts their morale during this sort of financial war. “GME is about more than just money, GME is about sending a message,” said u/aoechamp, who has 25k invested in GameStop stock.
With policymakers and regulators monitoring the situation, it is difficult to say how or when this uprising will end. But it seems that even at a loss, many feel like some good has come from all of this.
“I only have one measly share. I missed the boat on this, I was preoccupied the last few months with my wife’s cancer battle,” said u/Sir-xer21, “but thank you for letting me feel invigorated… For the first time in a long while, I feel a fire inside me. Thank you for this.”
Binance’s Trading Volume Hits $100 Billion in Just One Day
Binance continues to see unprecedent trading activity while attempting to sail through regulatory hurdles
Binance’s daily volume hit an eye-popping $100 billion on Oct. 20, according to a tweet by CEO Changpeng Zhao.
The leading crypto exchange recorded this crucial milestone on the day Bitcoin, the largest cryptocurrency, reached a new all-time high of $67,276.
Despite introducing stricter measures for users due to severe regulatory scrutiny, Binance enjoys a comfortable lead over other crypto exchanges in both spot and derivatives trading, according to data provided by CoinMarketCap.
Eerier this month, the trading platform also announced a $1 billion ecosystem fund.
Meanwhile, the decentralized finance sector is catching up with centralized behemoths. The total value locked in DeFi protocols has hit $100 billion for the first time.
Binance Smart Chain DeFi protocol PancakeHunny suffers flash loan attack
As the users argue “what’s better,” Ethereum or Binance Smart Chain, the latter saw another decentralized protocol being exploited. PancakeHunny on BSC was attacked by a flashloan and no, this wasn’t a first for the protocol.
Blockchain security and data analytics company Peckshield Inc. announced the attack on Twitter.
The last time that this protocol was exploited, was in June, wherein the team had noted the creation of a smart contract to exploit the Hunny Minter Smart Contract. The contract was subsequently executed 91 times, as per the team.
The team took a long time to respond to the hack this time but assured the users that their funds were safe. The team added in a preliminary report,
“On 20 October 2021, at 0920 UTC. A smart contract was created to exploit the Hunny TUSD vault. The Contract was subsequently executed 26 times.”
PeckShield provided some details about the same noting,
According to the agency, this hack was possible due to a profit inflation bug, which converts the relatively small amount of harvested ALPACA, to a large amount of TUSD for staking. PeckShield added,
“These converted TUSDs are then counted as profit, now inflated to mint large amount of $HUNNY!”
Actions taken by the team
The PancakeHunny team has stopped the minting process for the TUSD vault while assuring that funds in Hives were all SAFE. The exploit did not affect other Hives and Vaults but the price of HUNNY.
They added that the issue has been identified and the team will change its rooting to higher liquidity pools to prevent the aftereffects of price manipulation of LP pools.
NBA Makes Coinbase Its Exclusive Crypto Partner
Coinbase has joined FTX in scoring major partnerships in the sports industry
The National Basketball Association has announced a multi-year deal with Coinbase, America’s biggest crypto trading platform in an Oct. 19 press release.
Coinbase will act as the exclusive partner of the NBA, NBA G League, Women’s National Basketball Association (WNBA), and other leagues.
As part of the deal, the exchange will have a brand presence during televised games as well as unique content and activations that are meant to boost crypto awareness.
Kate Rouch, Coinbase’s chief marketing officer, says that the company is proud of joining forces with the NBA:
The freedom to participate and benefit from the things you believe in is at the heart of Coinbase’s mission. Nobody believes this more than NBA and WNBA fans. We’re proud to become the Leagues’ official cryptocurrency partner.
The shares of Coinbase are up roughly 3% at press time.