Wall Street Bets was a real world example of what happens every day on a more micro scale. It shows us that, if you can in fact leverage the existing infrastructure–that is, the physical, the knowledge base, the attitudes of the people, and many other factors–you can make gains. Wall Street Bets did this: they harnessed the infrastructure of the internet and social media. Total greed ultimately took over in Wall Street Bets.
Q1 2021 hedge fund letters, conferences and more
Further, this event happened on the heels of an insane year--unlike anything we have ever experienced. People were already in a state of disbelief, distrust, and questioning the system, the banks, etc.
The Long-Term Effects Of Wall Street Bets
WSB proved to provide a bit of relief from this tension, especially for all of the people who believe in reptiles that rule the countries, who felt vindicated about their theories. The Wall Street Bets leaders had ideas about how the financial system works.
But, nobody can predict the long-term effects of Wall Street Bets. The ones who made money were in early, and then exited the trade. Perhaps they were laughing at the mania they started. Who knows? WSB went the way of all pumps and dumps. The big difference was the scale. WSB took place in such a manner for all to see. The same thing happens on a small scale every day.
As the WSB GameStop situation unfolded, greed came together, and the price went parabolic. For a short time, everyone was happy. Until the price collapsed, and many of the followers left holding the bag. Then, WSB reportedly turned their attention to silver. Many analysts believed the silver price could go bonkers. Even from a technical analysis perspective, silver seemed ready to spike, and many believed it would. The greed in the silver market skyrocketed.
So, attention was now on a market seemingly ready to go parabolic. Everything seemed aligned. But, this time it was not some obscure Reddit page that nobody knew about. The world was watching, and everybody knew what was happening. Certain traders probably prepared. People bet against WSB. You saw the dollar strengthen, and JPMorgan downgraded the sector.
GameStop And Silver Squeeze
The WSB situation entailed some people with ideology and some pertaining goals. That’s cool. They weren’t evil. They had an ideological goal. But, the people who followed were largely acting on greed. When it came to the attempted #silversqueeze, greed was ultimately trumped by greater greed.
WSB’s squeeze on GameStop and attempted squeeze on silver demonstrated how markets are fluid and evolving. Just because you struck a blow against a hedge fund, doesn’t mean that opportunity will be there tomorrow. The WSB movement, by having such success, likely destroyed itself in the process. That’s how things go. It’s a real world, clear example of basic behaviors of man.
In the aftermath, the markets have in many ways remained more stable than I expected. WSB has not had the consequences many people seemingly thought it would. And, although the world of traders got clear evidence how markets are rigged, they still throw their money at Wall Street.
Article by Thierry Gilgen, CEO of MachinaTrader
About the Author
A seasoned trader and CEO of automated trading platform MachinaTrader, Thierry Gilgen has highly infectious motivational energy in the trading industry. With years of experience in forming startups and understanding the hurt points of enterprises, he provides insights based on his experience. From starting from garage path lifestyle and selling websites from at home during his teenage years, his goal is to provide valuable insight to the finance industry and share his thoughts on how to build successful businesses.
Twitter: https://twitter.com/MachinaTrader
LinkedIn: https://www.linkedin.com/in/thierry-david-gilgen-ab5659161/
