What You Should Take Away From The Robinhood Debacle? The Way Forward Is Rules Without Rulers

Lou Kerner
Feb 1 · 6 min read

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I saw that crypto light on June 29, 2017. I became of the belief that crypto was going to be the biggest thing to happen in the history of humanity. I saw that the history of humanity had been organizations (e.g. governments, corporations, religions…) run by a man at the top, largely solving for himself. But now, for the first time in history technology was creating a toolset to enable us to solve for the community, to have rules without rulers. Immutable rules, where before, there were no real rules, just people in the middle, with the power, largely solving for themselves.

Whatever actually happened at Robinhood, the one thing we know for sure is that Robinhood customers believed that they were on a platform that would let them trade the stocks they wanted to trade. And that belief turned out to be fiction. It turns out Robinhood solves for itself. And if that meant their customers couldn’t trade certain stocks, so be it. And Robinhood users were shocked.

To me, the shocking thing should be that Robinhood users were shocked.

Many in crypto believe this will be the clarion call for crypto. It will finally open people’s eyes to the evils of centralization. Yet in the four days since news broke that Robinhood was halting trading in a slew of stocks, bitcoin is up just 5%. Indicating that there has been little impact … so far.

That said, it was truly a glorious week for those who yearn for a decentralized future. We know in our soul that decentralization offers a better way forward, and we know time is on our side.

Below is a deeper look at the WallStreetBets subreddit, and few of the tweets and memes that captured the moment, a moment along the path to a better, decentralized future:

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The WallStreetBets subreddit was created in 2012 by Jaime Rogozinski because he was “..looking for a community, a place for people to talk about high-risk trades in an unapologetic way,” per this recent TMZ Live interview.

According to Reddit stats, the WSB subreddit didn’t reach 100,000 users until 2017:

The WSB Chairman Twitter account above dates back to May 2017, and is fast approaching 1 million followers. The account is ground zero on Twitter for WallStreetBets Reddit community (Like 4chan found a Bloomberg terminal).

The Real Greatest Short Burn of The Century — 4 months ago

GME is TSLA one year ago. GME is AAPL in 2017. Add to that the greatest short burn you’ll see in history, and you’re in for a hell of a show.

The REAL Greatest Short Burn of the Century Pt 2: The Two Towers ($GME) — 3 months Ago

TL;DR — $GME is just about to go parabolic. If you get on now, your diamond hands could turn to diamond rings.

The final GameStop Reddit post by @Jeffamazon post was poetic. Below are 7 text snippets I found particularly compelling:

  1. It started with a reference to this Elon Musk tweet regarding shorting stocks from 2018:

2. The GME story can be broken up into two main theses. The first is a deep value play which has credibility all on its own. The second is an infinity short squeeze like we’ve never seen before in history, which has credibility all on its own. When combining the two, you get the trade of a lifetime.

3. Just a face-ripping, out-of-nowhere, legendary-HOF-ticker bet that will bankrupt some funds and get people fired — and of course, with no community other than WSB’s name next to it in the history books (and if I could pencil in our lovely GME discord hosted by u/BadElf21 and u/RoaringKitty’s YT stream).

4. Let me show you the ridiculous Avengers team we have. By Avengers team, I mean all the bullish cases:

Ryan Cohen

The Iron Man of the bunch, some call him the Dog-Man.

This guy is a crazy entrepreneur. He took on Bezos with a pet food company (CHWY) and won. Let me repeat — he beat Jeff Amazon without AWS subsidizing his loss lead

5) Three signs of a bubble: leverage, lack of liquidity, and consensus.

This is an inverse bubble — it will rise as quickly as other bubbles drop. KBIO and VW are often quoted as short squeeze examples. Those are wrong comparisons. The only similarity is the fact that shorts were involved.

6) Most importantly, YOU.

CNBC and other misled, egoistic mass media companies and institutional investors continue, time and time again, to look down upon the new generation of traders and laugh at WSB.

7. The JeffAmazon target is $420

I started on Wall Street in 1994 as an equity analyst, and a made few pretty good calls in my seven years, and one GREAT call (I posted on Tumblr and it changed the trajectory of my career). But a 28 times price target (it was trading around $15 at the time of the last post), that was surpassed (GameStop traded at a high of $483 on January 28th) in two months, may well go down as THE greatest price target call in the history of Wall Street.

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and it’s decentralized …

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This content is for educational purposes only. It does not constitute trading advice. Past performance does not indicate future results. Do not invest more than you can afford to lose. The author of this article may hold assets mentioned in the piece.

Analysis. Advisory. Money Management

Lou Kerner

Written by

Believe Crypto is the biggest thing to happen in the history of mankind. Focused on stablecoins (founded JustStable.com) & communities (founded. CryptoMondays)

Quantum Economics

Quantum Economics is a publication for all those who wish to gain a greater understanding of why markets move, what influences them, and how you can get ahead of it.

Lou Kerner

Written by

Believe Crypto is the biggest thing to happen in the history of mankind. Focused on stablecoins (founded JustStable.com) & communities (founded. CryptoMondays)

Quantum Economics

Quantum Economics is a publication for all those who wish to gain a greater understanding of why markets move, what influences them, and how you can get ahead of it.

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