GameStop, a company aimed at selling physical video games struggling in recent years, has seen its stock prices explode by triple-digit percentages in the past several days as a bunch of traders from a designated Reddit group decided to act against Wall Street.
Although this rather curious development seems far off the crypto scene, SkyBridge Capital’s co-founder Anthony Scaramucci believes that it highlights the merits of the decentralized nature of BTC.
Headquartered in Grapevine, Texas, GameStop is a video game and consumer electronics company that has suffered the emergence of online games and closed malls and shops due to the COVID-19 pandemic.
Consequently, Wall Street has firmly believed that the company shares should plummet and had opened many short positions. However, this is where the Reddit community came to play.
A group going by the name r/WallStreetBets, with over two million subscribers, decided to act against the most-shorted stock on US markets, according to CNBC. As significant number of people followed the move, it led to a short squeeze, and short-sellers lost more than $5 billion in total.
GameStop shares turned into a frenzy or a meme stock. Some Reddit users bragged about six-digit profits, but others said they wouldn’t sell until the price skyrockets to $1,000. So far, GME has surged from $43 to $148 (255%) in less than a week.
Furthermore, it garnered the attention of the famous “Big Short” investor Michael Burry and the meme lover – Elon Musk. After Tesla’s CEO tweeted about GME last night, the stock price skyrocketed to $240 in after-hours trading.
While it seems on the surface that these developments have a little-to-no connection with the cryptocurrency industry, Anthony Scaramucci disagrees.
He believes that this particular phenomenon has exemplified the power of financial decentralization – the underlying idea behind Bitcoin. People having easier access to the formerly insular and highly concentrated endeavors of investing due to smartphones and low-cost trading have “democratized” the field.
“The activity in GameStop is more proof of concept that Bitcoin is going to work. How are you going to beat the decentralized crowd? That to me is more affirmation about decentralized finance.”
The large US investment company SkyBridge Capital, which Scaramucci co-founded, launched a Bitcoin fund earlier this year with a $25 million initial investment. He noted that the total amount has more than doubled to $60 million in less than a month, while SkyBridge has an overall BTC exposure of nearly $400 million.
