Will Bitcoin Repeat The GameStop Saga?


GameStop has been dominating the global news cycle since last week. A bunch of millennials is waging war against multi-billion-dollar hedge funds by buying the stocks these hedge funds heavily shorted, including GameStop, AMC, and BlackBerry. The price of GameStop Stock rose from $30 per share to as high as $469 per share, while AMC upped 581% in a week. 

Exchanges such as Robinhood have imposed restrictions on trading these stocks, which raises the concern whether the market is rigged by exchanges and Wall Street companies. 

It’s still too early to tell how this war between retail investors and big hedge funds will end. But amid all the chaos, some look to cryptocurrencies, with which decentralized censorship-resistant trading is made possible.  

Bitcoin is a decentralized cryptocurrency that could be sent from user to user without the intermediaries. Transactions done via Bitcoin are recorded in a public distributed ledger called a blockchain, ensuring that no one could amend the records.  

Bitcoin has quadrupled in value since 2020. It is considered by some as a “digital gold” for investors to hedge against inflation. What makes Bitcoin so special is that its supply is capped – 21 million, and around 18.5 million Bitcoins have been mined. 

For the past week, Bitcoin price shared a similar pattern with the price of GameStop stock. After struggling at $31,000 for over a week, Bitcoin finally had a rally to $38,500 after Elon Musk changing his Twitter profile into #Bitcoin. But the price of Bitcoin soon dropped back to previous levels. According to crypto news and The Block, hedge funds are behind the drop by shorting over $1 billion Bitcoin. 

The biggest difference between GameStop and Bitcoin is that Bicoin has a more promising future as it represents a new type of technology and has been gaining recognition from Wall Street investors and government sectors. Miami’s mayor, Mayor Francis Suarez, recently expressed that he has been playing the idea of adopting Bitcoin payment and investing in it. 

In the long-term, Bitcoin faces supply crises.“There’s a lot of demand, and there’s not enough supply of bitcoin for every financial institution to have their own reserve to serve their clients,” said McKenzie Slaughter, a member of the Black Women Blockchain Council.

Many Bitcoin hodlers believe that when they buy Bitcoin, they are supporting the future of blockchain technology and a decentralized financial system. This is another way of taking back power from institutional investors. 

Shorting refers to the practice of selling a stock or security with plans to buy it later. If you believe the price of a stock is going to drop, you can open a short position and make profits with the price differences. 

Bexplus is a Bitcoin-based trading platform offering 100x leverage and contracts for BTC, ETH, EOS, LTS, etc. Registration requires no KYC and takes 60-seconds. A Bexplus account grants you access to trading simulators, built-in charting software, up to 30% annualized interest bitcoin wallet and 100% deposit bonus.

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