A number of stocks, such as GameStop (GME) and AMC Entertainment (AMC), have increased significantly in price over the past few days, as reported in accordance with the attention from Reddit users who are purchasing due to the selling pressure from big players. Robinhood which is a successful trading platform eventually began limiting the ability of the customers on buying multiple assets associated with the drama. Richard Byworth, CEO of crypto exchange EQUOS, emphasized the value of independence in the markets when asked about his thoughts about Robinhood suspending GameStop stock purchases.
When Robinhood halted buys on specific stocks, day-traders were in complete disbelief. As the dust settles, these decisions have highlighted the growing divide between Wall Street and Main Street. Is crypto the only answer here? https://t.co/cSJXzSdogx — Cointelegraph (@Cointelegraph) January 30, 2021
Byworth told Cointelegraph:
“It’s always important to have free and transparent markets for all traders, and maintaining an open trading book that is available for everyone to use is a responsibility of all trading venue providers. The GameStop issue and platform responses will likely see crypto assets come more into focus.”
According to TradingView.com data, one share of GME cost around $53 on Jan 22. By Jan. 28, GME had hit a peak of approximately $508 per share. The asset fell all the way back down to about $113 in the hours following its peak price. GME has remained unstable in price since then, varying roughly between $197 and $411.
Aleks Svetski, co-founder and CEO of Amber, a Bitcoin investing platform, told Cointelegraph:
“I think it’s clear indication of how broken and fundamentally rigged the traditional financial system is. This will set all of the wrong precedents and is one of the final nails in the coffin for the relationship between Main Street and Wall Street. The WSB people are also likely to move to Bitcoin next as they realise it’s the only thing that can’t be turned off.”
The people are believed to be responsible because the rising stocks are part of the Wall Street Bets subreddit, often simplified as WSB. A CNBC article said on Wednesday that the squad allegedly searched for stocks with vast short-seller interest and purchased shares of those securities, triggering price rallies. Robinhood postponed Thursday’s purchase of some associated assets.
What kind of impact will Robinhood’s suspension for purchasing assets have on the crypto space moving forward?
“Situations like this show why regulation is important and ensuring there are orderly markets, equal access to information for everyone and trading venues that provide customers with fair opportunities to trade, hedge and take a position,”
He further added:
“In crypto, there have been some exchanges that have not provided this kind of trading environment, and often it is the customer who loses. It is incumbent on exchanges to provide a safe, transparent and compliant trading environment so that investors can access markets that are trusted – by regulators and by traders. At EQUOS, we do not trade against clients on our platform like most crypto exchanges nor do we sell our clients data to High Frequency Traders like many traditional brokers have done.”
The Securities and Exchange Commission of the United States, or SEC, has lately announced its intention to investigate the events of the past few days.