How Regulating GameStop’s ‘Market Manipulation’ Could Harm Crypto
Benjamin Sauter, Steven Perlstein, William McGovern and David McGill, 02 March 2021
The ongoing roller-coaster ride of GameStop, dogecoin and other so-called meme stocks has led day traders, market makers and exchanges to attack each other with knee-jerk accusations of “market manipulation.” When this happens, the primary winners are government regulators seeking to expand the scope of their authority. Industry cries of market “manipulation” – from all sides – are not only shortsighted. They also risk setting the market on a path towards an enforcement framework that all market participants may come to regret, no matter what side they think they are currently on.
Reddit takes on Wall Street
Since early this year, by sharing tips and organizing on social media platforms such as Reddit and Twitter, individual traders have been able to rally prices of meme stocks to unbelievable heights. First, it was GameStop, AMC and a handful of other targets, with traders sending prices skyward 1,500% or more. Then, traders set their sights beyond the securities markets: dogecoin (DOGE) rose over 800% in 24 hours after a tweet from Elon Musk rallied the masses behind it.
