WallStreetBets, Source of GameStop Short Squeeze, Launches Crypto Subreddit

WallStreetBets, the Reddit forum whose members coordinated to send GameStop stock through the roof, is creating a separate subreddit just for cryptocurrency discussions.

According to a Wednesday announcement from user bawse1, “It’s the same community, same format, same things you love about wallstreetbets, run by the same people.”

The WSB forum was ground zero for GameStop stock purchases earlier this year. Its members, who now number close to 11 million, applied memes and the threat of FOMO to encourage their peers to buy up as much GME as they could. The price of the stock, which hung below $20 to start the year, went all the way to $400 within a month as the amateur day traders barrelled through hedge funds’ short positions and held their nerve.

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At first glance, cryptocurrency trading would seem a perfect topic of discussion at WSB. Crypto assets garner the same cultish exuberance as GameStop and other meme stocks do. Sometimes the tokens are fly-by-night pump-and-dump schemes facilitated over Telegram. Other times they’re harmless (yet useless) meme coins and tokens looking to replicate Dogecoin’s and Shiba Inu’s multi-billion dollar market caps.

But the WallStreetBets moderators have been standoffish to cryptocurrency. Rule #4 of the forum is “No Pump & Dump, Crypto Discussions, Schemes or Scams.” The moderators lump in the $2 trillion asset class with SPACs, OTC stocks, and “other worthless securities that are susceptible to scams.”

In April, WSB made a small concession to its members interested in cryptocurrency, allowing discussion of Bitcoin, Ethereum, and Dogecoin—but no others—on a single thread. bawse1 wrote that the moderators didn’t want to “burden everyone with crypto spam” and that the no-crypto rules would apply to the rest of the subreddit.

That concession was reversed within 48 hours after Bloomberg ran an article titled “WallStreetBets Bows to Crypto.” That ruffled the forum moderators’ egos.

“Crypto discussion is banned indefinitely,” declared bawse1. “I’ve read a lot of dumb articles written about wsb. This one takes the cake.” He went on to explain that other moderators had been fiercely opposed to adding crypto discussions in the first place but that he remained for it.

Now, crypto comments have their own home, with far fewer restrictions. The new subreddit, called WallStreetBetsCrypto, already has 14,000 members. Though it’s officially listed as having been formed on January 25, 2018, discussions date only back to Wednesday. Top conversations include the China ban, Solana staking, and shorting Western Union.

There are still rules: “no cheerleading” for assets or fundraising for them, as well as “no political bullshit.” 

“If it’s not about taking advantage of the political to make money then leave that baggage at home,” rule #5 reads. Not that everyone in WallStreetBets has made money from trading. GameStop is back down below $200, 50% off its yearly high—great for those who bought at $20, but not so good for members who piled on at the peak. 

Still, the sense of camaraderie and the joy of sticking a finger in traditional finance’s eye is enough for some. As one WSB forum member wrote: “Wallstreetbets never fails to find new and inventive ways to lose money. I’m in.”

25 September 2021 00:02

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