Within the past few days, several stocks, like GameStop [GME] as well as AMC Entertainment [AMC] have risen dramatically in price, reportedly in line attentively with Reddit users purchasing within the face of selling pressure from the capital investment players. Renowned trading platform Robinhood subsequently began restricting users’ ability to shop for multiple assets related to the drama. When asked about his thoughts about Robinhood suspending GameStop stock purchases, Richard Byworth, CEO of cryptocurrency exchange ‘EQUOS’, revealed the importance of freedom within the markets.
“It’s always important to possess free as well as transparent markets for all traders, and maintaining an open trading book that’s available for everybody to use might be a responsibility of all trading venue providers,” Byworth explained. “The GameStop issue and platform responses will likely see cryptocurrencies come more into focus.”
Earlier on 22nd Jan., one share of GME cost about $53 USD, consistent with TradingView.com data. By 28th Jan., GME hit a peak of roughly $508 USD per share. Within the hours following its peak price, the asset dropped all the way backtrack to approximately $113 USD. Since then, GME has remained volatile in price, ranging between about $197 USD and $411 USD.
“I think it’s a clear indication of how broken and fundamentally rigged the existing economic system is,” Aleks Svetski, co-founder & CEO of Amber, a Bitcoin investing platform, added.
“This will set all of the incorrect precedents and is one among the ultimate nails within the coffin for the link between Main Street and Wall Street,” he added. “The WSB people also are likely to maneuver to Bitcoin next as they realize it’s the sole thing that can’t be turned off.”
The folks thought to be liable for the surging stocks are a part of a subreddit called WSJ [Wall Street Bets], sometimes shortened to WSB. The squad reportedly searched for stocks with vast short-seller interest & purchased up shares of these assets, causing price rallies, a CNBC article added on Wednesday. Robinhood suspended the acquisition of certain associated assets on Thursday.
What sort of effects might Robinhood’s asset purchasing suspension wear on the cryptocurrency ecosystem going forward? “Situations like this show why regulation is vital and ensuring there are orderly markets, equal access to information for everybody and trading venues that offer users with fair opportunities to trade, hedge and take an edge,” said Byworth, explained:
“In crypto assets, there are some exchanges that haven’t provided this type of trading environment, and sometimes it’s the users who lose. It’s obligatory on exchanges to offer a secure, transparent, and compliant trading environment in order that investors can access markets that are trusted – by regulators as well as by traders. At EQUOS, we don’t trade against clients on our platform like most cryptocurrency exchanges nor can we sell our client’s data to High-Frequency Traders as many traditional brokers have done.”
The United States SEC [Securities and Exchange Commission], recently expressed the intent to research the events of the past few days.