BREAKDOWN: GameStop, Robinhood and the Failure of Un-Free Markets
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 30 January 2021
⏱️ 15 minutes
🧾️ Download transcript
Summary
The latest in the saga of WallStreetBets vs the world.
This episode is sponsored by Nexo.io.
In this edition of the Breakdown’s weekly recap, NLW looks at:
- Robinhood’s ham-fisted explanations for why it shut down buying for GME and other stocks
- Why the root cause seems to have been insolvency
- How politicians are gearing up for political inquiries around the trading shutdowns
- How WSB is reacting to the shutdown attempts
This week on The Breakdown:
Monday | The Bitcoin Whales Won’t Stop Buying
Tuesday | ‘The 4 Wars We Could Fight With China,’ Feat. Kyle Bass
Wednesday | Why Bitcoin Has More Ideological Flexibility Than We Think
Thursday | WallStreetBets Is Occupy Wall Street With Teeth
Friday | In Retrospect, It Was Inevitable: Elon Musk Pumps Bitcoin to Space
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Earn up to 12% APY on Bitcoin, Ethereum, USD, EUR, GBP, Stablecoins & more. Get started at nexo.io.
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Transcript
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| 0:00.0 | Welcome back to The Breakdown with me, NLW. |
| 0:09.1 | It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. |
| 0:16.0 | The breakdown is sponsored by nexo.io and produced and distributed by coin desk. What's going on, guys? It is Saturday, |
| 0:25.0 | January 30th, and that means it's time for the weekly recap. And this week, as you would imagine, |
| 0:31.0 | it's all about Robin Hood, Wall Street bets, GameStop, and the failure of unfree markets. Where we left off on Thursday was that |
| 0:41.6 | Robin Hood had shut down trading on the set of equities that were associated with the Wall |
| 0:47.8 | Street bets community. More specifically, they had shut down the ability to buy those assets. |
| 0:53.9 | You could still sell things like GameStop. |
| 0:56.7 | Quick review now of this recent Wall Street Bet strategy, there are two sides of the play. |
| 1:02.5 | First, find some over-leverage short-seller focused on an underpriced stock and then buy the |
| 1:08.6 | ever-loving crap out of that asset. Second, hold. Do not sell to the |
| 1:14.4 | short sellers as they desperately try to cover their shorts as the price of the asset rises. |
| 1:20.3 | Going back to Robin Hood then, they didn't just halt trading entirely. That would have been one thing. |
| 1:25.7 | Still a pretty serious thing, but different than what actually |
| 1:28.6 | happened. What they did was that they only allowed selling of these assets, the whole point of which |
| 1:35.0 | was this community was trying to keep holding. It was nearly impossible for anyone watching, |
| 1:40.7 | frankly, quite reasonably, to see this as something other than an attempt |
| 1:44.8 | to tank the market for these specific assets. |
| 1:48.7 | Unsurprisingly, then, people asked what was the logic behind this, or more specifically, |
| 1:54.0 | who was behind it. |
| 1:55.5 | Justin Khan, the founder of Twitch, sent out a very incendiary tweet that said, |
| 2:00.0 | Just got a tip that Citadel reloaded |
... |
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