GameStop saga Shows legacy finance is rigged, and DeFi is the answer

Interestingly enough, Musk's general endorsement of Bitcoin comes at a time when heritage financial markets have been openly caught defrauding their particular customers, and also the Robinhood app is at the middle of this fraud. Really, the richest man alive advised the world he thinks Bitcoin is on the verge of mass adoption amid a background of criminal stock market behavior.

The GameStop saga
For those unfamiliar with these events, the GameStop saga is a"David and Goliath" story that started out with a neighborhood of online dealers on the subreddit r/Wallstreetbets bringing down hedge funds -- clawing off at billions of dollars in institutional orders that are short. A brief order is a sort of order which allows investors to profit from the passing of a company.

After retail investors realized that hedge funds shorted GameStop for 150% of its entire public inventory -- i.e., more shares than existed -- a group of 2 million (now 8 million) Redditors figured out that by buying the stock and not selling, hedge funds that shorted GameStop would shed billions. And so it was.

However, whenever retail investors started winning, the long-reaching tentacles of centralized corporations were able to block the game entirely, freezing trading on key trades and trading infrastructure to ensure hedge funds can reposition without dropping everything.

Really, one of the largest fictions of our period is that the narrative of free markets. Including the capability to be rewarded (or punished) for getting a bet in the financial game, which ought to function under strict rules.

When it's high-frequency trading, artificial derivatives, boundless money-printing or any combo of all three, the stock exchange rewards a couple of insiders who game the system and perform with a different set of rules than everyone else.

It's important to see that the issue is not the game itself -- free markets are the most effective way of proper value transfer, if done properly. The issue is that principles only apply if institutional gamers win, otherwise they are sometimes broken, revised and suspended with minimal impacts for all those with friends in high positions.

This drove many Redditors to the stage where, knowing that the market is rigged, they didn't care about losing money, given hedge funds lose billions. It began as retribution against those responsible for the 2008 fiscal crisis and the misery that many had to live for this.

This Reddit article paints a good picture of the motivations that inspired countless individuals to band together against jagged financial conglomerates. Of course, other motives -- such as profit motives -- were definitely at play as the market fed on its self-reinforcing mechanisms. No matter the program's true colors are now available for everybody to see.

And while heritage financial media has attempted to steer the narrative in a specific direction, the accuracy of the matter is that this narrative is apolitical and exposes the fact that ordinary regular people aren't allowed to win. Regardless of goals, the stock market is revealed to be a way to entrench and exacerbate poverty in a rigged game that only benefits those that are already wealthy.

The Beginning of a journey
On the other hand, the journey does not end here -- for there's a parallel system that is not controlled by Wall Street or central bankers, and it's growing as we speak. With a market capitalization of more than 1 trillion, cryptocurrencies are fast becoming the new frontier for financial markets which have no allegiances.

In addition to being a brand new technology which democratizes markets, there is now a crystal-clear motive for investors to opt out of the older system and input the new one.

Bitcoin started this revolution 11 decades ago, and it doesn't end there. A completely new financial ecosystem has been constructed on Ethereum from the ground up, which has sprung a wealth of decentralized fund products with assorted trade-offs and use cases.

This time this past year, funding in DeFi products reached the $1 billion landmark. Now, that figure is approaching $30 billion, according to DeFi Pulse.

With this backdrop, the future of financial markets appears closer than ever before.