“All of this has a bit of ‘Okupa Wall Street'.” With this eye-catching headline he defined an investment specialist from Euronews what is happening in recent days with Reddit. Members of this network of forums, he argues, “are an army of small investors who have decided to stand up to the big Wall Street hedge funds.”
They're getting it. And on Wall Street they cannot disguise their concern, as they have taken action against this group of liners who have taken the procellous path of facing the ocean liner. A ‘David Vs Golliat' of finances, so far, unknown final.
But to understand everything well, let's go back. Howdid Reddit's rdago start on Wall Street? On January 4, 2021, the shares of the GameStop video game store were worth $17.25, according to Investing. Ravaged by the growth of online sales – greatly accentuated by confinements – the company was irretrievably heading towards bankruptcy. Thus becoming a bicoca for hedge funds, they sell in short and benefit from falling prices.
This speculative system involves enriching yourself with the debacle of a company. At least that way they seemed to understand Reddit's linings. Then the group ‘Wallstreetbets' was born,a horde of small investors who decided, in their own way, to ‘squat Wall Street' and prove that they were able to cope with the establishment.
On January 25, the value of GameStop's assets was $76.79, a day later it closed at 147.98, and 27 closed at 347.51 (+1,914% in 25 days). Obviously, this didn't like anything in the high rooms: it strikes to say the huge amounts of money that these anonymous investors were losing large financial institutions.
Then came the lifeboat, and it originated where it could least be expected. Robinhood, one of the most widely used trading platforms by young and small investors, whose objective, theoretically, is to democratize investments – and which had been the platform mostly used by Reddit components – decided to restrict trading with GameStop shares and other companies.
Since Robinhood they excused themselves in market volatility with the aim of justifying their decision. For some, it was to move from the poor to the side of the rich in a moment.
“All of this has a bit of ‘Okupa Wall Street'.” With this eye-catching headline he defined an investment specialist from Euronews what is happening in recent days with Reddit. Members of this network of forums, he argues, “are an army of small investors who have decided to stand up to the big Wall Street hedge funds.”
They're getting it. And on Wall Street they cannot disguise their concern, as they have taken action against this group of liners who have taken the procellous path of facing the ocean liner. A ‘David Vs Golliat' of finances, so far, unknown final.
But to understand everything well, let's go back. Howdid Reddit's rdago start on Wall Street? On January 4, 2021, the shares of the GameStop video game store were worth $17.25, according to Investing. Ravaged by the growth of online sales – greatly accentuated by confinements – the company was irretrievably heading towards bankruptcy. Thus becoming a bicoca for hedge funds, they sell in short and benefit from falling prices.
This speculative system involves enriching yourself with the debacle of a company. At least that way they seemed to understand Reddit's linings. Then the group ‘Wallstreetbets' was born,a horde of small investors who decided, in their own way, to ‘squat Wall Street' and prove that they were able to cope with the establishment.
On January 25, the value of GameStop's assets was $76.79, a day later it closed at 147.98, and 27 closed at 347.51 (+1,914% in 25 days). Obviously, this didn't like anything in the high rooms: it strikes to say the huge amounts of money that these anonymous investors were losing large financial institutions.
Then came the lifeboat, and it originated where it could least be expected. Robinhood, one of the most widely used trading platforms by young and small investors, whose objective, theoretically, is to democratize investments – and which had been the platform mostly used by Reddit components – decided to restrict trading with GameStop shares and other companies.
Since Robinhood they excused themselves in market volatility with the aim of justifying their decision. For some, it was to move from the poor to the side of the rich in a moment.
On January 28, the shares fell again, in this case to $193.60. He did not like the Robinhood movement, which received a class action lawsuit accused of “manipulating the market.” She was forced to withdraw the restrictions and, on January 29, GameStop's shares peaked at $413.98. Currently, they are held at $225.
Despite the obstacles, on Wall Street they already knew how Reddit spent them and waited in fear for the next move. This one didn't take long to get here. The second earthquake would affect the cryptocurrency sector.
Reddit propels Ripple and Dogecoin
“What do we have these with?” should Reddit's liners have thought when they saw Wall Street defending themselves against threats. They then turned the target and set it in the Dogecoin – thecryptocurrency that was born from a meme. On January 27, it was $0.007444. On 30 January it reached 0.045968 (+517 %). When you write this article, its value is 0.034125.
But in Reddit they wanted to, so they turned the rearview mirror again and decided to shoot the fourth cryptocurrency by market capitalization (Ripple). Let's make the same comparison: on January 27, 2021, it closed at $0.25073. Throughout February 1, it reached an incredible peak peak of 0.75358 (+991%). Then came the descent. Still, it stays above the values of a week ago, and, at the time of writing, it's at $0.36010.
A suggestive question these days is how has the war between Reddit and Wall Street affected the most important cryptocurrency: bitcoin? As it remains stable, on January 27 it was $30,404 and is currently at $34,393.
How to invest in GameStop shares
One of the options for investing in GameStop stocks is CFDs. A broker that allows you to invest in CFDs on Game Stop stocks is eToro. We invite you to read our full analysis on the eToro trading platform.
