If you haven’t been living under a rock in the past week or so, you must have heard about the stock explosion at Game Stop, fueled by an army of Reddit warriors trying to fight the good fight against their hedge fund overlords. GME stock, the ticker for video game retailer Game Stop, sat at just under $20 dollars on January 12th. What happened next will go down in history, as the stock skyrocketed to as high as $470 in just two weeks, triggering an unheard-of response from the Wall Street firms.
Why Game Stop?
Popular Reddit forum Wall Street Bets has always been a place where small-time investors in search of the next big thing can go and share stock tips and advice. The sub-Reddit is known for its activism, hate of big Wall Street firms, and their sometimes vulgar posts. Earlier this year, the contributors of the sub-Reddit made the decision to band together to try and thwart the short sell of several stocks by some of the world’s largest hedge funds, most notably Game Stop stock.
Game Stop got the most acclaim, as it saw the biggest backing, but several stocks were targeted by Wall Street Bets, including BlackBerry and Bed Bath and Beyond. These were stocks that were being heavily shorted by large firms, and the forum saw an opportunity to band together and cost the Wall Street funds millions of dollars by buying up the stock, causing its price to go up. This was stock manipulation at its finest, but instead of the major Wall Street firms calling the shots, this was regular people like you and me driving the price up.
— Elon Musk (@elonmusk) January 26, 2021
What caused the stock to truly skyrocket, though, was when billionaire Elon Musk decided to get in on the fun and started tweeting out support for Wall Street Bets and GME. Musk has always been at odds with the big bankers, and he saw a chance to hurt them where it matters, in their pocketbooks, and took full advantage of it. It seemed like the little guys were going to win in this David vs. Goliath battle until Wall Street decided to band together to squash the little man once again.
An Unprecedented Response
So, what did the big banks do to stop the Reddit army from spoiling their billion-dollar short plays? They halted the buying of the stock! Several major firms, including TD Ameritrade, E-Trade, and Robin Hood, stopped allowing people to buy GME stock in an unprecedented move. They still allowed people to sell the stock, though, which for those of you out there that understand how stock prices work, tanked the stock.
We actually have laws in place that will temporarily stop the buying and selling of a stock if there is too much mid-day movement. These pauses are in place to stop stock market crashes where everyone wants to sell so fast that nobody has time to really think it through, which can erase billions of dollars in just minutes. But I have never seen Wall Street only pause the buying of a stock while still allowing the selling of that same stock.
This is unacceptable.
We now need to know more about @RobinhoodApp’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit.
As a member of the Financial Services Cmte, I’d support a hearing if necessary. https://t.co/4Qyrolgzyt
— Alexandria Ocasio-Cortez (@AOC) January 28, 2021
This was tantamount to Wall Street fixing the game, as the stock could quite literally only go down, as people were only allowed to sell their positions. Not shockingly, the stock lost half of its value in one day, and it looked like the big banks again would have their inevitable win, even if it took some shady tactics to get it.
While the Redditors haven’t backed down yet, and now that GME stock is back on the market, they are again backing the stock, as it has gained 78% today in early trading, they are waging a war they can’t win. While the battle on Wall Street wages on, some of the Wall Street Bets crew have decided to take this battle to a place where the rules are fairer, cryptocurrency. That brings us to DogeCoin.
What Is Doge Coin?
Quite literally, DogeCoin is a joke. It was created as a gag by software engineers Billy Markus and Jackson Palmer in response to the crypto craze in 2013. They based the coin off of a popular dog meme, and while it technically has the ability to hold value in the same manner as, say, Bitcoin, for example, the coin never really took off and has always had a value of less than a penny per coin. Until now.
The beauty of any cryptocurrency is that they are decentralized, meaning that nobody own or controls them. They are also, for the most part, completely unregulated. Knowing that there really isn’t anything that anybody can do to stop the intentional manipulation of a cryptocurrency, the Redditors decided that they would even up the playing field by taking the fight digital.
#Dogecoin becomes the most tweeted cryptocurrency of all time, surpassing previous records for #Bitcoin @elonmusk https://t.co/dCtpzloxKq
— Bio Stocks™ (@BioStocks) January 29, 2021
Since DogeCoin found itself as part of a much bigger fight between small-time investors and the Wall Street billionaires, it has seen its value shoot up over 800% in just a couple of days. After being worth almost nothing for years, DogeCoin hit a high of over 9 cents per coin last night. Had you invested in DogeCoin this morning, your investment would be up nearly 150%, and there is still a lot of day left for trading.
Will Doge Coin Hit $1?
The real question everyone is asking themselves, is will DogeCoin keep going up? We saw that GME hit the 2000% mark for growth, and many are wondering if DogeCoin will do the same?
Despite the long-term future of DogeCoin looking like this is certainly going to be a short squeeze bubble and not a long-term investment like other cryptocurrencies, there is still some money to be made on DogeCoin. The best part about DogeCoin is that it is unregulated, and it allows the Wall Street Bets crew to flex their muscles without anybody being able to stop them. The problem for DogeCoin is that the Wall Street bankers likely don’t care.
— Elon Musk (@elonmusk) January 28, 2021
Unlike the GME manipulation, inflating DogeCoin “to the moon” does nothing to really hurt Wall Street. Yeah, it shows the strength of what small investors can do if they team up together, but it doesn’t cost them billions like the GME play did.
So, will DogeCoin hit $1? Probably. These WSB guys love to show what they are capable of, and now that Elon Musk has now jumped into this movement, you can expect some crazy volatility in the value of the coin in the short term.
If you want action, you can still get in now cheap, as the coin is currently trading at about .05 cents. If it hits a dollar, which it absolutely could by the end of the week, that is a hefty 20X return. But just know that if you are buying into this literal joke of a coin, that the tides could change quickly, and there is no SEC or Wall Street bank that is going to slow things down when the bottom falls out. DogeCoin could make you rich today, but broke tomorrow. If you decide to jump on the roller coaster, just make sure you know when to jump off!