If you haven’t been living under a rock for the past year you’ve likely heard something about what’s going on with stocks like GameStop, AMC Entertainment, and cryptocurrencies like DOGE and SHIB which have all seen tens of thousands percent gains collectively. This movement started when a then little-known subreddit named “wallstreetbets” and a trader known as DeepFuckingValue collectively decided to buy GameStop shares to cause the price to go up, effectively “short squeezing” hedge funds such as Melvin Capital who held large bets on the stock price falling because of GameStop’s impending bankruptcy.
In response to the predatory tactics of these hedge funds who sought to profit on the downfall of others, the reddit community forced the price of GameStop to go in the opposite direction than the hedge funds were expecting. Fueled by powerful memes and a lack of fear for losing any money, thousands of individual retail traders all aggressively and incessantly bought the stocks on leverage (borrowed money), giving a community of 50,000 the same market sway and buying power as that of the hedge funds which they were waging war against. While the stock price of GameStop started sky rocketing, the pressure was on funds like Melvin Capital as they rapidly bled billions of dollars, stubbornly holding onto their bet that the GameStop share price would go back down.
In the midst of the chaos, the atmosphere of the wallstreetbets subreddit went from that of a light hearted community joke to a cult-like revolution that aimed to destroy the institutions which had long profited off of the backs of the millennial generation and working class, a generation which has been permanently priced out of the housing markets due to rampant speculation and hoarding of rental properties by real-estate funds and other wall street investment vehicles like Melvin Capital. This was no longer a joke, it was a real movement that had legs and would forever redefine investing, fundamental analysis and the influence a meme can have on markets and public perception. This is a paradigm shift in all aspects, and will become the narrative that paves the way for social tokens, memes, Decentralized Autonomous Organizations, and retail investment communities to become important components in the global financial markets and beyond.
Shortly after the GameStop fiasco, other meme-centric financial assets began to take off. DOGE went up 12,000% in the span of a few months, SHIB, SafeMoon, and too many others to mention. Okay, so something’s happening here. What is it? And most importantly why? It’s simple, the internet has enabled us to be connected like never before, and we’ve realized when we all work together in coordination, pooling our resources together, we become a force to be reckoned with. Cryptocurrencies mixed with these communities amplify the effects even more. Content creators can release their own tokens and encourage a large community to back it, where the token represents some kind of share in the success of that content creator.
Take CryptoKeif for example, the power of cryptocurrency and a tight knit community united by the coin has taken his KeifCoin social token from a $0 market capitalization to a high of $1 million practically overnight, and it’s not stopping there. This will be one of many stories where a group of random internet strangers come together to achieve a common goal and collectively become obscenely rich off of nothing but a community, some memes and strong will-power. Pandora’s Box has been opened. Citizens of the internet now realize they can make anything have value just because they will it to. Similar to the US dollar whose value is based on thin air, and a mantra “In God We Trust”, communities on the internet have come up with their own belief systems for their own currencies. Some people really like dogs and some people really like CryptoKeif or Lil Yachty and their respective tokens, and trust them more than traditional fiat currencies or assets part of the legacy financial system.
Social Tokens encourage community engagement and cooperation like never before as now instead of clicking “Like” or “Retweet” on a creator’s content out of the kindness of their heart, a fan is financially incentivized to do so, which will cause a super-scaling of online personalities who deploy their own tokens to their community of loyal followers, creating a self sufficient creator economy which doesn’t ask permission from anyone to create things that can shake the world.
