Reporter | Zou LuhuiEdit|The US stock market continues to play big games. As the long short battle between US retail investors and Wall Street institutional investors continues to ferment, cryptocurrencies have also been trapped in this battle in the past two days, once again presenting a price myth of 8 times a day and 10 times a day
Reporter | Zou Luhui
Edit|
The US stock market continues to play big games. As the long short battle between US retail investors and Wall Street institutional investors continues to ferment, cryptocurrencies have also been trapped in this battle in the past two days, once again presenting a price myth of 8 times a day and 10 times a day.
On January 28th local time, after several fairy stocks represented by GME in the United States were pushed to high prices by American retail investors, internet securities firms represented by Robinhood successively announced restrictions on trading, allowing only users to sell and not buy, causing the stock prices of the aforementioned companies to plummet collectively.
To protest, in an uproar, angry retail investors shifted the battlefield to a cryptocurrency called Doggy Coin, which became the last to benefit from the battle. The price doubled 10 times within 48 hours, and the market value jumped to seventh place in the cryptocurrency market value.
Retail investors strangle Wall Street, and the stock price of game stations soars tenfold
It all starts with a rapidly rising US stock market.
GameStop, a US gaming retail company, has seen its stock market rapidly rise by almost 100% daily in recent times. As of the close of the US stock market on January 27th, GME's closing price was $347.51, while seven days ago, its price was only $39.36, a nearly 8-fold increase in seven days.
The opposite of its price is the declining performance of GameStop, a company.
As an established giant in the industrial gaming industry, GamStop is facing dual attacks from online electronic game sales platforms such as Steam, Nintendo, and digital game publishers. Not only did it lose nearly 300 million yuan in the first three quarters of 2020, but it also faced bankruptcy under the impact of the epidemic, announcing the closure of more physical stores in the next two years.
The driving force behind the sharp rise of GME's stock price against the market cannot be separated from a community called "wallstreet bets" on the Reddit forum in the United States. Wallstreet bets means the Wall Street gambling world, filled with a large number of retail investors who do not believe in rationality and value investment, using "YOLO" (Youonlyliveonce, you only live once) as the investment philosophy, and sneering at the behavior of elite institutions on Wall Street short selling stocks.
The selection of GME as a retail target may seem absurd, but there is a reason to follow: firstly, Ryan Cohen, the co founder of the well-known pet e-commerce company Chewy, has strengthened the confidence of retail investors by adding to GME since the second half of 2020; Another igniting factor is that Citron Capital, a well-known short selling institution, released a short selling report on January 19, which not only called GME stock buyers "losers in this poker game", but also regarded half of GME's share price as a foam, completely igniting the reverse psychology psychology of retail investors.
Not only was Citron heavily attacked, forcing it to open another social media account and announce a "ceasefire", but the US stock market also staged a "civilian victory", with bearish institutions suffering heavy losses, with cumulative losses expected to reach as high as $10 billion (approximately 70 billion yuan).
Some evaluations have pointed out that the GameStop incident directly unleashed the energy of American retail investors to the extreme, strangling a group of well-known American institutions.
Securities firms restrict retail trading and trigger class action lawsuits
This unilateral victory changed on January 28th local time.
As the day approached the opening, Robin Hood, known as the "retail capital", issued a statement saying that, affected by recent fluctuations, the broker had decided to restrict some securities from closing positions only, and the margin requirements for corresponding securities would also be increased accordingly. The affected securities include GME, AMC Cinema, BlackBerry, Nokia, and other stocks that are highly regarded by the Wallstreet beta community.
Subsequently, Yingtou Securities, Futu Holdings, and multiple domestic securities firms in the United States followed suit and also prohibited the opening of certain such stocks.
Affected by this, WSB concept stocks have plummeted one after another. As of the close on the 28th, the game station plummeted by 44%, marking the first decline in six trading days; AMC theaters closed down 56%, Express down 50.26%, and Nokia down 28.17%.
After the internet securities firms represented by Robin Hood took the aforementioned restrictive actions, angry retail investors also regarded the securities firms as "accomplices" to "assist short sellers".
Under the official push of Robin Hood, a large number of investors bombarded the trading platform with this decision. At the same time, some retail investors have launched a class action lawsuit against Robin Hood Securities. According to the interface news, Hao Junbo Law Firm, which had previously participated in the class action lawsuit against Ruixing and Alibaba, also initiated a class action lawsuit against Robinhood today.
Reuters reported that the U.S. House Financial Services Committee and Senate Banking Committee announced on the 28th that they will hold hearings on the stock market. Maxine Waters, the chairman of the House subcommittee and a Democratic senator, said that the hearing would focus on "the systematic impact of short selling, online trading platforms, game companies, and related events on the U.S. capital market and retail investors."
We must address the issue of hedge funds, whose unethical behavior has directly led to recent market turmoil. We must examine the entire market and how hedge funds and their financial partners manipulate it. They benefit themselves and make others pay for it
Individual investors turning to a new battlefield: Doggy coins born from jokes
At the same time, two unrelated investment targets were also drawn into this war, and due to restrictions from securities firms, American retail investors who were unable to open their stock positions found a new target - Dog Coin (DOGE).
An account named WSBChairman has asked multiple questions about DOGE on Twitter. Firstly, what is Dogcoin? Who owns Bitcoin and should choose Bitcoin or GameStop stocks? Received responses from multiple cryptographers, and renowned founder Anthony Pompliano replied that WSB community+Tesla+Bitcoin=Wall Street's nightmare.
Although the user was ultimately proven to be a counterfeit account of the well-known KOL in the WSB community, their Twitter account still unstoppably pushed Dog Coin into the eyes of retail investors.
In the past 48 hours, DOGE has skyrocketed from 0.00726 USDT to a maximum of 0.084 USDT, with a daily increase of over 8 times and a two-day increase of over 10 times. According to Coinmarketcap data, DOGE's market value has already ranked among the top seven.
According to encrypted data provider TheTIE, the daily tweet volume of DOGE surged by 1787% yesterday. Within 24 hours, a total of 89991 tweets about DOGE were posted, marking the first time that Shanzhai Coin's daily tweets exceeded Bitcoin's.
Some cryptocurrency investors exclaimed, "Dogcoin has not seen as much growth in the past two years as it did in this day." Some investors jokingly said, "The existence of coin circles is just to make a plain truth, people are not as good as dogs
In fact, Gougou Coin was initially just a joke like cryptocurrency, originating from the popular meme (MEME) of a picture of a firewood dog on social media in 2013. At that time, the concept of cryptocurrency began to rise, and Australian marketer Palmer, one of the world's largest technology companies, joked about two of the hottest topics on the internet: cryptocurrency and Doge. Twitter said, 'Investing in Dogecoin - I'm pretty sure it's the next big thing.' And bought the domain name of Dogecoin.com and printed the Chaigou on the coin.
This joke was supported by a software engineer from IBM who is obsessed with electronic games. The two of them continued this joke and truly created a new cryptocurrency - Dogcoin, which relied on its self deprecating features to gain a huge community, thus continuing to become one of the old currencies in the cryptocurrency world to this day.
The Dog Coin code has not been updated for many years, and its price support comes from occasional hype. For example, Tesla founder Musk changed his Twitter profile to Dog Coin CEO, and a virus video on TikTok in July 2020 has gradually hyped up this well-known joke coin.
In May 2020, Robinhood launched a cryptocurrency transaction for seven assets, including Bitcoin and Ethereum, in New York, and Dogcoin was involved, laying the groundwork for the hype of Dogcoin.
Nowadays, this currency born out of absurdity has become a new target for speculation, inevitably adding to the "absurdity" of this battle between retail investors and institutions.
A cryptocurrency observer commented on this: "Cryptocurrencies were born to fight against the mainstream, but now mainstream institutions and retail investors are on the same front. Dogcoin, a product of community culture that is not recognized by institutions, has a surge in sentiment similar to GME
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