Run the Numbers #23: is r/wallstreetbets Buying Bitcoin?

Bitcoin & Data Science


What an incredible roller coaster it has been in traditional markets over the last two weeks! At the height of the Wallstreetbets short squeeze, failing video game retailer Gamestop’s ($GME) stock hit a high of $480 after trading under $10 for the previous two years – a 6,000% increase.


The reason for the dramatic price swing was the group of stock traders on the r/wallstreetbets Subreddit recognized that several hedge funds were over leveraged in their short trades against Game Stop stock. In a grass roots movement, they started buying the stock (which many analysts see as a failing company), forcing the funds to cover their short positions. Traders continued to buy the stock, forcing more and more short positions to be covered which drove the price skyrocketing until finally regulators and trading platforms pulled the plug, preventing retail traders from taking the long side of the $GME trade.

Its no surprise that wall street beat out the little guy in the end – they pull all the strings after all – but the wallstreetbets saga exposed just how rigged our financial system is. In the wake of the fiasco we have seen public figures such as Elon Musk and Dave Portnoy come to the defense of the wallstreetbets traders, calling the actions taken to prevent them from trading Game Stop as criminal. But not unlike the aftermath of the 2008 financial crisis, the big wig wall street banks (who are tightly involved with regulators and fiscal policy makers) get saved and the retail investors are left holding the bag.

After realizing the stock market is rigged against them, WSB traders aimed their sights on the precious metal market. Silver, in particular. Similar to Game Stop, they saw that major funds around the world were naked short the Silver price. They were able to pump the price up a bit, but as we can see in the chart below it was nothing compared to their efforts the last two weeks – a mere 50% increase. WSB will inevitably realize that the precious metal markets are just as rigged as equities markets and there is only one asset that cannot be minipulated – Bitcoin.


The r/wallstreetbets Subreddit does not allow discussion about Bitcoin or other cryptocurrencies (likely due to the sheer number of scams and pump & dump schemes in the space), but we have seen major players from the WSB movement start promoting Bitcoin on Twitter and other social media platforms. Bitcoin was released as a direct response to the 2008 financial crisis. Its fair and open nature prevents it from being corrupted by regulators and market makers.