I watched "Eat the Rich: The GameStop Saga" on Netflix last night. I thought it was entertaining and accurate.
I started paying attention to the $GME story about a year after I got into crypto. I wrote a blog post about it on heyheyrenee -
Looking back how wrong I was.
At the time I was a Chamath Palihapitiya fan. After learning more about Chamath and his $SPCE pump and dump scheme, I'm now a harsh critic.
I think what I missed most about the $GME story was that it was just another version of rigged. What I mean by that is this.
Yes it's true that a few profited from essentially trading on information that was free, for anyone to see. In my blog post I wrote that was a good thing, because it enabled John Q. Public to get ahead. But on balance, that wasn't what was going on. And for every 1 person who profitted, many more lost their money.
The documentary clearly points out that the stock takes off largely because of YouTube influencer account roaringkitty. Basically some random guy on YouTube who had a major position in the stock. roaringkitty wants everyone to believe he's an everyday man just trying to get ahead. But it turns out he worked in the financial sector - he knew the game.
Back then I looked at this as democratizing of information. The Internet and the sub Reddit wallstreetbets was bringing information theretofore only available to insiders, to John Q. Public. My take was naive.
My post closes with this:
"I think it’s a really good thing that people are saying “fuck you” to the system. It’s what we need.
Power to the people!"
I'd been in crypto about a prior to writing the post, was on a crypto pink cloud at the time. It didn't occur to me that crypto could be affected by market manipulation, because all the transactions are on the blockchain.
According to this piece from The Defiant, wash trading - a misleading act to drive up the price of an asset - accounted for over half of NFT volume in 2022. Crypto isn't immune from market manipulation. In fact it's easy to make a case that the NFT boom we've seen heretofore is based entirely on market manipulation.
Back then I thought the $GME story was a feel good showing what could go right when people come together. That free information and crypto give the everyday man has just as much power in markets as the well-to-do. I was convinced that crypto was going to be the rising tide to lift all boats.
The harsh reality is that in the stock market and now crypto you're playing against expert day traders and institutions who're rigging the game. Yes, crypto has promise. But so far it's a rising tide that's lifted all yachts. If you're going to invest in the stock market or crypto you need to understand you're in a daily battle for lunch money. Get rich quick is a fantasy. You need to exercise extreme caution or you're going to lose all your money.
tty next time,