Bitcoin news of the week. Handpicked for you by Anita Posch. Every Friday.
Thought of the week by Anita Posch
From “Occupy Wall Street” to “Leave Wall Street” – What happened with GME stocks?
“On Sept. 19, 2020, a Redditor with the handle Player896 published a post in the channel entitled “Bankrupting Institutional Investors For Dummies, ft GameStop.” In it, the person outlined a strong bullish case for GameStop (GME), a brick-and-mortar business that primarily sells video games and consoles.
The author noted that GameStop stock was being heavily sold short at the time by a number of institutional investors, despite the fact “their books are rock-solid”. This was likely an attempt by large players to out-muscle amateur traders and induce panic selling. The WallStreetBets Reddit community saw this as an opportunity to push back against the financial elite and decided to whip up a buying frenzy in the hopes of creating a major short squeeze.” (Source)
The WallStreetBets’ call was successful. The price of GME stocks skyrocketed over 1,800% from $19.79 to a high of $380 in nine days causing huge losses for large players and hedge funds (which btw also are investors in Robinhood, where most of the GME trading happened). Yesterday Robinhood and other trading platforms halted GME trading and as it seems even started to sell retail investors GME shares without the investors consent to protect brokers and funds. Here is the chairman of Interactive Brokers explaining that they halted buying of GME stocks to protect themselves.
Here is the chairman of Interactive Brokers explaining ON LIVE TV that they halted buying of $GME to protect themselves and other brokers from massive losses#wallstreetbets won, but the game is openly rigged pic.twitter.com/HXGzq2OkRJ
— P. P. Dik (@ppdik) January 28, 2021
What can we learn from that? This can happen on every centralized trading app or centralized Bitcoin exchange. When Robinhood can halt and even sell your stocks, exchanges like Coinbase, Binance, Bitstamp and whatever their names are can do the same. They might be forced by authorities to do the same for the sake of protecting the big players. This is another bail-out, where the small investors get crushed. This is the reason why Bitcoin was built. So that every single person has the possibility to hold the keys to their money themselves. Do it. If you have your bitcoin on an exchange move it into self-custody now.
I understand you might be scared to lose your 24 seed words and lose access to your bitcoin. That’s why I will do a Q & A session around that topic. Send me your questions on how to self-custody your Bitcoin here, I will answer them in my February Q & A video.
Last weeks Bitcoin Q &A
Including answers to questions around exchanges, wallets, buying bitcoin, price predictions and more….
Quote of the Week
“In moments of uncertainty, when courage and strength are required, you find out who the true corporatist scumbags are.” – Chamath Palihapitiya
Users exiting Robinhood and using Coinbase now?
Seems that betrayed retail investors delete Robinhood and move to Coinbase. Nice for Coinbase. But they are still a centralized exchange and the same can happen there.
Coinbase is now the #9 most downloaded app on the US App Store, up from #143 yesterday.
Retail is entering the market. I expect strong buying during the US session.
— Alexander Markl | SW Capital (@codingalex) January 29, 2021
Why the 21 million bitcoin supply limit and not any other amount?
Here is the original answer from Satoshi Nakamoto.
Q: Why did Satoshi choose an upper limit of 21,000,000 BTC?
A: The limiting factor is the max value of a 64 bit integer (18,446,744,073,709,551,615) and 21,000,000 BTC is represented as 2,100,000,000,000,000 satoshis.https://t.co/lUo4fRn0yS pic.twitter.com/KbxSyesiNK
— Jameson Lopp (@lopp) January 23, 2021
Podcast of the week audio only
No financial advice. DYOR.