Although it seems to many people out of nowhere, the themes behind the Reddit-powered r / Wallstreetbet GameStop pump look familiar. When I saw this unfold, I tried to figure out why I was so interested in it, and for me it was an entry into the traditional markets of some of the common traits that drive cryptocurrency.

Despite some competition in history, I look at the catalytic force – and by that I mean the spread of a message across social media that generated interest broad enough to have an impact on the market – behind a GME pump similar to what, today was the driving force behind Bitcoin (BTC). ). This is the driving force (based on irony) for the expansion of cryptocurrency markets and decentralized financial movement – the desire to “democratize the economy”. Behind this movement is a belief that finance and financial products should be open and accessible to all, and not dependent on whether you are a certified (read: high net worth) player or institutional player.

Related: Time to shine? Cryptocurrencies should have a chance after the GameStop drama

The rules for accredited investors, which have long been criticized, were recently expanded in 2020. During the revolution, this change allowed more classes of investors to meet with specific financial references, such as Series 7 and knowledgeable employees of private equity funds. Identify among other changes that did not contain anything important. See the Securities and Exchange Commission press release for a description of recent changes to the definition.

There was a folkloric element to this story, kind of a David and Goliath story where an ordinary person managed to flip over to spark a massive crowdfunding move in the market. However, while it generated a certain degree of euphoria, the incident also brought about some acute underlying tensions in American society, including a strong sense of patriarchy toward the poor, in this case, retail investors, and increased intergenerational tensions.

Related: GameStop Saga shows that the old economy is rigged and that DeFi is the answer

Organizational parenting
In the United States, as a somewhat toxic outlet for self-determination, there is a bias or an implicit assumption that those wealthy become so because of their personal characteristics, and likewise, the poor will remain poor as a result of some. Personal failure. from their side. Outside of academia, retail policy has not been reflected in detail on the socio-economic factors that enable people to accumulate wealth and feel that the game has been rigged by mounting barriers to upward mobility in the United States.

This manifests itself in regulatory paternity, where the government imposes restrictions on who, in its view, can invest or have access to certain financial products. This clearly left those who had not been certified without access to early investment. Many argued that the wealth test systematically excludes all investors who are able to understand risk, regardless of their income level, and argue that I agree that “wealth is not a condition for financial development.”

But at the same time, it provides access to casinos, tickets, payday loans, and other predatory financial tools such as reverse mortgages, where competing interests such as the lack of a government budget or effective pressure from the industry are presumed to prevail.

You end up with a system that appears designed to reinforce class barriers – where the wealthy can shape the law and dictate history. This is most clearly demonstrated by the sympathetic content of Melvin Capital, who worked for CNBC and portrayed hedge funds as heroes, and leveraged the network’s belief system of belief that Melvin’s actions were somehow good for society and just universally fair.

This was likened to characterizing the readers as unwashed wrinkled masses, who, due to chaos and devastation, emerged like rodents on the path of personal financial ruin and created a situation in which there was a kind of systemic risk resulting from the random selection of a small stock. I hate to give too much importance to it, but even though the rich lost a little money here, this is not quite an economic disaster as portrayed.

Source: CoinTelegraph

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