Reddit WallstreetBets Copies Chainlink Marines Playbook: GameStop Up 800%
In the beginning of 2020, long before Bitcoin would drop back to $4,000, have a midyear May halving and then rise to $20,000, a social media rally saved Chainlink. When the group of dedicated Chainlink fans known as the Chainlink Marines heard that Zeus Capital had opened a short position on their favorite crypto, they huddled together and sent Chainlink even higher, buying up every new low. By the summer, as DeFi became famous, Chainlink hit $20.
Redditors manipulating $GME is horrible— 👨🏻💻☕️ (@hunterwalk) January 25, 2021
We should leave stock manipulation up to the Wall St professionals
Gemini co-founder Tyler Winklevoss at the time commented:
I really appreciate the passion of the $LINK Marines. Their fervor and dedication reminds me of the early Bitcoin and Ethereum communities. Unlike many other crypto armies, they are dedicated to a project that has real promise and technical merit.
Short sellers are down $91 billion in January as GameStop leads squeeze in stocks they bet against https://t.co/MozcBPJfdz— CNBC (@CNBC) January 26, 2021
By now, the Chainlink Marines playbook has been copied by a group of Reddit enthusiasts who are grouping together on a Sub-Reddit called r/wallstreetbets. This social media band of brothers has become so massive that they are able to move Wall Street stocks.
Hedge fund short position
Their biggest exploit came earlier this week when they sent Gamestop stock some 800% higher in only a few days after hearing that a Wall Street hedge fund called Melvin Capital wanted to enlarge it’s short position.
The story is a long and winding one, but started to gain traction when a Reddit story named Bankrupting Institutional Investors for Dummies appeared on the site in September last year. The Redditor explained the theory, copying the Chainlink Marines playbook of last year.
Fans of the game selling franchise shop network Gamestop (which clearly had no real future anymore give the number of brick and mortar stores that it owned), sent the stock ever higher in order to put the short seller’s position underwater.
As of yesterday, they were able to do so much damage to classic Wall Street hedge funds that Citadel and Point72, two major funds, had to invest $2.75 billion into Melvin Capital to keep it alive. Melvin saw it’s short position on Gamestop blow up.
By now, Melvin Capital is down 21% for the year, which is about the same percentage that Gamestop is up pre-market today.
Looks like Reddit is bringing crypto trading to Wall Street.
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