Report said that the success of the GameStop short squeeze has highlighted the need for decentralized finance (DeFi).
It has been reported that the stock, which was trading at less than $20 per share earlier this month, was deemed by members of the r/WallStreetBets subreddit to be under attack by a hedge fund that had disclosed a large short position in the stock.
However, as a result of the pump coordinated on Reddit and executed by individual traders using platforms like TD Ameritrade and Robinhood, hedge fund Melvin Capital Management lost a total of $3.75 billion by having to close their massive, losing short position on GME.
Crypto-friendly trading platforms like Robinhood and FTX are providing a range of money-saving alternatives when investing in stocks. https://t.co/M1g7JKahyv — Cointelegraph (@Cointelegraph) January 28, 2021
The report said that various centralized trading platforms have now put limits on trading the stock and the president of NASDAQ, the exchange on which GME is listed suggested that trading could be temporarily halted on stocks deliberately targeted by internet users, in order to give investors a chance to “recalibrate.”
According to the report, the crypto community has watched on with fascination as traditional markets start to resemble crypto markets, only worse.
At some point these r/wallstreetbets dudes will figure out that BTC is the biggest financial protest https://t.co/IjdHKm57wg — Haralabos Voulgaris (@haralabob) January 27, 2021
Mike Novogratz, the CEO of digital assets management company Galaxy Digital, likened what happened with GME to “a giant endorsement of DeFi” on Twitter by calling it “a revolution that started with people not trusting central authority.”
1)This GME squeeze is deeper than a squeeze. its a large group of people saying they don't want Citadel preying on their orders from RH, they don't want IPO's being allocated to insiders, they don't like a system geared to the already rich.This is a giant endorsement of DEFI. — Mike Novogratz (@novogratz) January 27, 2021
Thus, he also drew comparisons between the Reddit-based movement and the current social climate of inequality that has gripped the US, as well as many other countries, in recent years.
3)these are all symptoms of a growing inequality that is leaving our markets, our political system, and civil society more fragile than they have been in my lifetime. it makes my more bullish crypto but more importantly more focused and committed to systems change. — Mike Novogratz (@novogratz) January 27, 2021
Source: Cointelegraph