Elon Musk on Bitcoin, and Reddit vs. Wall Street
Elon Musk on Bitcoin, and Reddit vs. Wall Street
Hey Redpill Readers!
Today’s newsletter covers Elon Musk dropping a big bomb on Twitter.
And then, after that, we’ll unpack what happened this week with GameStop, the stock market, Reddit groups, trading apps, and hedge fund elites. If it all seemed like too much, we can't blame you for tuning out.
But here’s what you need to know...
BITCOIN SOARS AFTER TESLA CEO ELON MUSK SAYS THIS ON TWITTER
Elon Musk, the world’s richest man and the greatest innovator of our generation, changed his Twitter bio to a single word: Bitcoin.
View here...
For those that don't know, he's the founder and CEO of several multi-billion dollar companies, yet the only thing that he's identifying with at the moment is Bitcoin.
On top of that, he tweeted this...
You're right, Elon.
It was inevitable. But you knew that. You took the redpill of money a long time ago. As a matter of fact, it wasn't long ago when you tweeted this...
And let's not forget the day when Twitter user Will Reeves, sent this out: "just passed by and saw @elonmusk has a bitcoin ATM at the Gigafactory."
Yes, a Bitcoin ATM at the Tesla Gigafactory in Nevada.
The tweet was accompanied by a Google maps image revealing the location of the ATM on the northern side of the massive factory complex.
According to a report by Finbold, the ATM was installed by LibertyX in August of last year solely for the use by employees of the factory.
But hey, that's just a coincidence right? It could be fake news? Maybe. Regardless, the crypto community is stoked to have Elon Musk endorse BTC loud and clear.
If you ask us, it won't be long before Elon does what Michael Saylor, the CEO of MicroStrategy, recommends: putting Bitcoin on the company's balance sheet.
To be honest, we shouldn't be surprised when Elon puts Bitcoin on Tesla and SpaceX's balance sheet. The world is changing. And everything we're seeing, right now, will serve as a milestone for when the world woke up to the decentralized system.
Because the truth is, the legacy system doesn’t work any longer.
Millions of Americans need a new, trustworthy, and fair financial system. And that's exactly what we're going to get.
Sure. The price action is fun. Who doesn’t like seeing Bitcoin and smaller cryptos jump 3x or more? We certainly do. But the larger significance is about decentralized alternatives to today’s financial system.
THE TAKEAWAY
Google searches for “bitcoin,” a barometer of widespread interest, surged following Musk’s cryptic endorsement of Bitcoin.
As for price movement...
Bitcoin is looking strong, having pierced a two-week bearish trendline on our firm's charts. Resistance is seen at $40,112 (Jan. 14 high), followed by the psychological level of $42,000. Will we go to the moon? Yes.
And then Elon shall take us to Mars.
Moving on...
INSIDE THE REDDIT ARMY THAT'S CRUSHING WALL STREET
Over 1M+ "degenerates" made history this week...
Details: the army from the subreddit r/wallstreetbets was where it all started. At the heart of the GameStop saga is a struggle between two different groups of investors: A band of amateur day traders Vs. a bunch of Wall Street pros. And in case you don’t know, these pros are known as short-sellers.
What’s short selling? It's how investors make money off a stock falling.
But here’s what happened: Earlier this week, trading volume surged in shares of GameStop, AMC Entertainment, as well as Bed Bath & Beyond and BlackBerry, stunning Wall Street firms betting that the value of those stocks would fall.
The surges came from small retail investors (from that subreddit). These smaller guys had trading accounts ranging from $500 to $2,500.
And what did the small guys do? They teamed up together in an economic tug-of-war against major investment firms...
Companies like Citron Research and Melvin Capital, which had placed bets that GameStop shares would fall (in a practice called short selling, as we just mentioned).
Ultimately, they had to fold their entire position by buying back their short shares, which also created more demand. This is a perfect storm called a “short squeeze.” And get this, the GameStop stock, which sat at $10 a few weeks ago, went as high as $380.
The point of all this? This is the first time that we’ve seen the small guy, organize and punish fat cat hedge funds as a target. It’s a complete paradigm shift, since it’s usually the other way around. When hedge fund folks loot our markets, it’s all good.
But when small retail investors destroy a hedge fund, all of a sudden...
CNBC analysts start calling for more regulation, new rules, and censorship. Or they’ll halt trades “for our own good,” blame foreign powers, and they may even talk about “fundamentals.” But as we’ve just explained, this is all B.S.
STOCK MARKET MEETS INTERNET FRINGE CULTURE
This subreddit believes that the stock market is a casino. Plus, these "degenerates" have a "yolo" mentality, vowing to either "get rich and ride away in a Maserati or end up living underneath a bridge."
But the point is this: we just saw Reddit's misfit investors go to war against the big boys. They exploded onto the mainstream, moving from the front page of Reddit, to the front page of the New York Times. Just like that.
Is this part of the Fourth Turning? You bet.
Small guys are fighting back. Redditors are taking down hedge funds. And Bitcoiners are taking down the central banks. Together, they’ve become a huge, decentralized collective “fund” that aims and shoots.
Could this be the beginning of the end of traditional fundamentals? We believe so. Just look at Tesla as a shining star.
And let’s be honest. Most, if not all, traditional markets are manipulated anyways. The crypto market is a more “raw” version of the equities market.
If you want free market capitalism... (and not crony capitalism which is what we’ve had for so long), then the crypto market is the place to be.
But once the billionaires were bleeding, what did they do? Call up their elite buddies, of course. They had the folks at exchanges and trading platforms halt trading.
Angry traders have already filed a class action suit against Robinhood, striking back against the restriction.
And it didn’t stop there, the subreddit’s Discord server was even banned. Why? For allowing "hate speech." Some folks in the mainstream media have called these small investors "terrorists." Seriously? Sorry, but that's ridiculous.
Key points:
It’s a David Vs. Goliath story: Folks on Reddit feel like they're shifting the power dynamic by betting against Wall Street. Why are they doing this? Because they feel historically wronged by big shots. Like the hedge fund guys in fancy suits. And the bankers, too.
In addition to $GME, traders following the r/WallStreetBets subreddit have been piling into AMC ($AMC), Blackberry ($BB), and Nokia ($NOK).
These funds were betting GameStock would fall — like Melvin Capital and Maplelane. But they lost billions after the Reddit army pumped up the stock.
WallStreetBets described itself as "4chan with a Bloomberg terminal." Look closer at communities like 4chan, or 8kun, or WallStreetBets, and you’ll see plenty of similarities. They all have an edge.
One key element to 4chan is its opposition to mainstream "normie" culture. For them, that means: focusing on mutual funds, long-term slow gains, maxing out your 401(k)s, buying index funds, etc. But on WallStreetBets, that's all depicted as a sucker's game. And we agree.
Corruption in plain sight: Wall Street hedge funds running to the exchanges to halt trading to prevent losses is another example of why the game has always been rigged in favor of the elites. When you lose, it's okay. But when they lose, the game is turned off.
Bottom line: What's going on is basically a targeted distributed denial-of-service (DDoS) attack of short hedge funds by a small, yet powerful group of retail investors.
Some of the high-profile short sellers of GameStop, closed out their positions (ending their trades). And the Reddit army celebrated with memes like this…
Reports show us that the hedge funds have lost more than $5B on the GameStop stock. Sure enough, they got some help. Melvin Capital received a $2.75B bailout from Citadel and Point 72 to help with finances. More bailouts.
Wonderful.
Underdog ethos: The battle continues. But it’s clear, they have a desire to expose the hypocrisy and call out the flawed, corrupt system that leaves them feeling the way they do. A similar sentiment held by Redpill Crypto Readers who are aiming to topple conventional thinking. That’s why our firm teaches you how to exit the matrix, invest in Bitcoin, and help you win big with smaller, more speculative cryptos.
Keep in mind: Cashapp, Robinhood, Ameritrade, Fidelity, and E-Trade all restricted AMC and GameStop trades. What do you call it when multiple companies shut down trading on the same stocks? Not a free market.
In other words? The system is rigged. Bitcoin isn't.
Another hedge fund to know about -- D1 Capital -- which has to be one of the biggest losers that bet against r/WallStreetBets. And get this, they also just sohappen to be one of Robinhood’s biggest investors.
Mike Novogratz, head of Galaxy Digital, was saying much the same thing on Twitter: "This GME squeeze is deeper than a squeeze… It's a revolution happening in parallel with the social unrest across the country”
Whatever this Reddit group's motivation, be it political, revolutionary, monetary, or just meme-fueled anarchy -- we, at Redpill Crypto Research, dig it. Because it's working. They have the world's attention now.
What else will they do with it?
THE TAKEAWAY
Taxis don't like Uber. Hotels don't like Airbnb. Bookstores don't like Amazon. Hedge funds don't like the rise of retail investors.
Innovation is not always liked.
If you ask us, the exodus has just begun from Wall Street, into Bitcoin and crypto.
Just think: First, they censored a sitting U.S. President. Then they censored words. And now they've censored trades. Nearly every person with a keyboard and an internet connection is pissed off right now. But don't worry.
The system can't stop the decentralized revolution that’s coming. This is the beginning of the end for centralized finance (and centralized institutions, too). The elites can try to regulate and make Bitcoin much more difficult to use... but good luck trying to control something that is transnational, decentralized, and infinitely expansive.
Remember the last financial crisis?
2008: Too big to fail.
2021: Too small to win.
And get this, it took less than a day for big tech, big government, and the corporate media to spring into action and begin colluding to protect their hedge fund buddies on Wall Street. This is what a rigged system looks like, folks. Carry on.
MORE REDPILL CRYPTO NEWS
Bitcoin is ‘less risky the higher it goes,’ says Investor Bill Miller on CNBC
Morgan Stanley boosts stake in Bitcoin-laden MicroStrategy to 10.9%
Rothschild Investment Corp. has acquired another $700,000 in Grayscale’s Bitcoin Fund
Elon Musk’s Starlink is going to be a game-changer. What happens when the entire world is online (and has access to 100mbps) no matter where they are? Good things.
DISCLAIMER: Newsletters published by Redpill Crypto Research reflect the opinions of only the editors who are associated persons of the firm and do not reflect the views of anyone else. They are meant for informational purposes only, are not intended to serve as a recommendation to buy or sell any security in a self-directed account with Coinbase Inc. or any other account, and are not an offer or sale of a security. All investments involve risk and the past performance of a security or financial product does not guarantee future results or returns. Cryptocurrencies and digital assets are speculative and highly volatile, can become illiquid at any time, and are for investors with a high risk tolerance. Investors could lose the entire value of their investment.
Redpill Crypto Research will have no liability whatsoever for any expenses, losses (both direct and indirect) or damages arising from, or in connection with, the use of information in this newsletter. Readers are encouraged to conduct their own research and due diligence, or obtain professional advice, prior to making any investment decision.© 2020 Redpill Crypto Research. All Rights Reserved.