Following last week’s absolute nail-biter of a show featuring Reddit vs. Wall Street Hedge Funds, US Treasury Secretary Janet Yellen is calling a meeting including the leaders of the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Federal Reserve in order to discuss the finance sectors last few weeks. According to the Wall Street Journal, the meeting is scheduled to begin as early as tomorrow, Thursday, February 3rd, 2021, in what is sure to become an investigation that marks, at the very least, a small blip in financial history. Who knows, if consumers get away with this fiasco we could be looking at the more effective sequel of Occupy Wall Street.
For those who live under a rock, last week, a ragtag stock market trading group of Reddit users by the name of came together to initiate a short squeeze on GameStop stocks. Their actions caused losses of billions to some hedge funds, including Marvin Capital which lost 53% in January and required a bailout of $2.75 billion from larger hedge funds, and drove the S&P 500 to its lowest point since October.
All the losses were intensified by the fact that Robinhood, a leading stock trading app, blocked its users from buying more GameStop stocks. Furthermore, WallStreetBets was temporarily banned from Discord. All of this seemed to prove to individual stock traders and many within the cryptocurrency market that the financial industry is severely rigged.
Another organization was quick to cash in on the situation. Thinknum Alternative Data is a software company that is now selling data regarding WallStreetBets. For 16,000 a year, hedge funds can get real-time information detailing the usage of stock names in the WallStreetBet Discord channel.
Stephanie Avakian, Director of the SEC’s Enforcement Division stated, “Robinhood provided misleading information to customers about the true costs of choosing to trade with the firm, Brokerage firms cannot mislead customers about order execution quality.”
These events continue to raise tensions across the different sectors within the worldwide financial markets. Yet somehow, this all seems like a net positive for the cryptocurrency market. Alas, this is but another rock hurled at the “infallible grace” of Wall Street, another point goes to those of us who continue to champion transparency, decentralization, and the utopian potential we see in cryptocurrencies and blockchain!