Up until now, 2021 has been an exciting year and a Reddit forum called r/wallstreetbets ignited a whole new hot topic this week. news.Bitcoin.com posted on the stock market crisis four days ago that began with short Gamestop (GME) shares being crushed. However, GME shares also impacted other stocks as the wallstreetbets (WSB) trend started spilling into numerous other shares.
For example, Russell 3000 Index (RUA) stocks were targeted, which included stickers such as NOK, GOGO, AMCX, and FIZZ. The social media trend has leaked into the world of cryptocurrencies, driving up coins like dogecoin and XRP as well. According to figures from the financial data analytics company Ortex, estimates assume that short-sellers have lost “$70.87 billion from their short positions.”
A report from Zerohedge shows that during the month of 2021, Melvin Capital lost a staggering $7 billion. The report noted:
“Melvin Capital lost 53% in January, as Gabe Plotkin (a former SAC Portfolio Manager), lost over $5.3 billion in one month”
Because of the short squeezers who want to squeeze the silver market, the financial news desk has also posted on another WSB trend taking place over the last week. A particular thread on r/wallstreetbets indicated that the power of the crowd could push the silver price from $25 to $1,000. Zerohedge has posted on trends that indicate that Redditors and users of social media have managed to trigger silver demand.
The finance reporter disclosed:
“In the 24 hours proceeding Friday market close, SD Bullion sold nearly 10x the number of silver ounces that we normally would sell in an entire weekend leading to Sunday market open. In a normal market, we normally can find at least one supplier/source willing to sell some ounces over the weekend if we exceed our long position (the number of ounces we predict we will sell over the weekend).”
During the time WSB crisis, Durden from Zerohedge stated that Goldman Hedge Fund VIP list decreased by 4 percent this week. Goldman’s David Kostin concluded:
“In recent years elevated crowding, low turnover, and high concentration have been consistent patterns, boosting the risk that one fund’s unwind could snowball through the market”
Durden interpreted Kostin’s last conclusion in another way:
Translation: if WSB continues to push the most shorted stocks higher, the entire market could crash.
Source: Bitcoin.com | Image: INSIDE BUSINESS | QUESTION MORE