GameStop traders sent the stock on a wild ride. The stock boosted by Redddit online forum r/WallStreetBets has plunged more than 40% Thursday after once surging nearly 40% earlier in the day. The GameStop saga also triggered popular investment applications such as Robinhood to shut down trading in the stock.
The stock trading app announced the restriction of trading in the video game seller’s stocks citing market volatility: “In light of recent volatility, we are restricting transactions for certain securities to position closing only.” Robinhood also shut down trading in other red hot stocks such as AMC, Blackberry, Bed Bath & Beyond, Nokia, among others – Reddit traders also declared war on short sellers who see these stocks as overvalued.
Other online brokerages such as Interactive Brokers also took similar steps to curtail activity in the high-flying stocks.
GameStop’s stock has been soaring in a remarkably volatile fashion. As investors congregate on the WallStreetBets subreddit, piling onto GameStop against short sellers, GameStop once surged to $483 during the past few days in a Bitcoin-like growth. At the time of writing, GameStop is closed at $193.6, up more than 102% so far this year.
DeFi: Censorship-Resistant Investment
As the latest development, Robinhood announced it plans to allow “limited buys” of stocks like GameStop, after its initial ban sparked fury across social media and triggered a class-action lawsuit, as well as the attention of members of the US Congress.
“The wrong people are winning so they delisted the assets,” tweeted Ryan Sean Adams, author of the “Bankless” newsletter. “They just recruited another 1 million people into DeFi. UNISWAP NOT ROBINHOOD. PROTOCOLS NOT BANKS. This is why we go bankless.”
The GameStop investing craze is a “Proof of Concept” for Bitcoin’s success, said SkyBridge Capital’s Anthony Scaramucci in a Bloomberg interview, as the mobile-based and low-cost trading are “democratizing” markets, shown by the decentralized investor activity.
“How are you going to beat that decentralized crowd? That to me is more affirmation about decentralized finance,” Scaramucci said.
Bitcoin (BTC) and cryptocurrency prices have climbed after stock trading apps stepped in to restrict GameStop trading.
In a tweet responding to “WSB Chairman” inquiring about “Anybody own Bitcoin?”, crypto analyst Alex Krüger replied:
“You guys should come join DeFi, sure you’d love it.”