Build the wall, drain the swamp, buy bitcoin. Sure you can gamble on it, you buy a bitcoin and then maybe you sell a bitcoin to a greater fool for a profit. Sure these activists can topple over a single small fund who was maintaining some dodgy shorts. In a nutshell a bunch of retail investors (possibly with help from institutional insiders) decided to pump a small cap stock far beyond what the valuation of the company should be. Yes, a tiny group of colluding insiders are richer; but a ton of investors are left holding bags and a bunch of institutions made a killing taking their money. But you know who is making a killing off all this fiasco? Goldman Sachs, Citadel, Andersen Horrowitz those guys are making transaction fees, getting on the other side of your trades and facilitating Robinhood’s public offering. A similar story has been spun around bitcoin investments for years in order to solicit billions in investment from the public.
The last ten years have seen a massive redistribution of wealth from this age bracket into older demographics. A deeper story about the rage that’s boiling just beneath the surface of modern life and how a new class of people have learned to tap into and release that pressure for their own personal gain. In fact I assert the GameStop story is relatively inconsequential. It’s the story of how Gamestop and bitcoin are symptoms of same collective neurosis and how, through technology, nihilism and rage have been turned into a tradeable commodity. But we have to ask what has this achieved? Everyday I see a world where many in my generation have simply given up all hope for opportunity of a family, a house, a stable career and forced to confront an uncertain future in a world that is slowly boiling itself to death. A death cult with a central faith in digital alchemy that purports to transmute entropy into gold by channelling its true believers worst instincts of resentment and greed into energy waste. At its core it is a philsophy that channels the mutual suffering of our generation, not into productive activity or reform, but into the very same worst excesses of financial speculation and climate change that created our generation’s problems.
There are only two problems with this story: Its economic absurdity and technical absurdity. Simple answers to complex problems are optimized for viral transmission. The Gamestop story and bitcoin story are two sides of the same coin. Many articles written about the GameStop story mark the event as a watershed moment in the markets and an epic tale of the establishment vs the little man. Equities markets are efficient and the majority of people who joined this bubble late are all but guaranteed to lose money. I’m very sympathetic to the retail investors in this bubble because a lot of their anger is absolutely justified. While a bunch of retail investors are at best left holding a bunch of garbage equities in their portfolio. While in the lottery people pour their hope and money into the chance of life-changing winnings based on impossible odds. This is Goliath drinking champagne while David dances for his amusement. And so we see Gamestop story fall out of that. This story does however hold up a mirror to a more profound truth.
Let’s state the uncomfortable truth. Yes, let’s replace the evil corrupt system that screwed us over! Bitcoin is overthrowing the financial system in the same way a Che Guevara t-shirt on sale for $5 at Primark is overthrowing capitalism . And in doing so anger at the financial system has itself been transmuted into a vehicle for wealth extraction from the gullible to the greedy for the same system. It’s not surprising that when it comes to their investment strategies, that the “you only live once” philosophy and a preference for high-risk high-return investments is preferred. Bitcoin doesn’t work, it’s a naked speculative bubble based on a technology that doesn’t scale can’t and can’t replace any existing financial service. And they don’t give a damn about timing this bubble because they make money in either direction. And millennials are desperate for stories that give them a sense of hope for a future of prosperity and a return to the lives their parents once led. Millennials are suffering because they are poor and many will never recover from back to back crises of 2008 and the global pandemic. Buying lottery tickets and trading manipulated crypto assets are both a tax on the poor and disenfranchised.
