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 Reporter | Si LinweiThe smokeless war on Wall Street in the United States at the beginning of 2021 is impressive. A large number of retail investors and well-known short-selling institutions such as Citron Fund are fighting over targets such as GameStop. In the end, Citron Fund lost billions of dollars and announced that it would never short-sell, and GameStop's stock price soared. Retail investors who have tasted the sweetness are now turning their attention to Dogecoin. Why is Dogecoin soaring? Have Bitcoin and Ethereum become games for big capital? Can Dogecoin repeat the story of GameStop? On May 8, Barry Silbert, the boss of Grayscale Capital, the world's largest institutional holder of Bitcoin, announced on social media that he had shorted Dogecoin and hoped that everyone would return their attention to Bitcoin. According to public data, Grayscale Capital holds 653,300 Bitcoins worth US$38.014 billion. Barry Silbert is the founder and CEO of Grayscale’s parent company, Digital Currency Group, and is a wealthy man on Wall Street. On May 9, Tesla CEO Elon Musk said during an appearance on the American variety show "Saturday Night Live" that Dogecoin is the future of currency, an unstoppable financial tool that will take over the world. The emergence of Dogecoin is that "there is a way to steal" (the original text here is "It is hustle", but it cannot be directly understood as a "scam". "Hustle" also means the spirit of thieves in Western culture, refer to the British drama "Hustle"). Why did Barry Hilbert announce, like Citron Fund, that he would be shorting something that retail investors love? The background is that at the beginning of 2021, under the strong appeal of Musk, the spiritual leader who happily proclaimed himself "Dogecoin CEO", the price of Dogecoin soared more than 140 times in less than half a year. Investors are mostly retail investors in the United States rather than large financial institutions, so Musk calls it "the people's currency." Dogecoin is a mass carnival under the leadership of Musk and a rebellion against the traditional American elite. It is a completely different investment philosophy, with the most direct dream of getting rich and a down-to-earth spiritual slogan. Its investment rate of return has also directly left behind the traditional institutions that have heavy positions in Bitcoin and Ethereum. Such a funny air currency has no actual value or innovation, but its peak market value has exceeded 100 billion US dollars. In contrast, Grayscale Capital's Bitcoin trust products have recently experienced a negative premium for a long time, which reflects that investors' willingness to buy is getting lower and lower. This naturally makes Wall Street elites like Barry Hilbert unable to accept the surge of Dogecoin. Why is Dogecoin soaring like crazy? In addition to Musk's platform, we can pay attention to these two perspectives: First, multiple trends show that the two cryptocurrencies of Bitcoin and Ethereum have become farther and farther away from ordinary investors. As of May 10, the price of Bitcoin remained near US$60,000, and Ethereum was about to break through the US$4,000 mark. In terms of price, the income of many Americans can no longer afford to buy one Bitcoin. Judging from on-chain data, according to research by data research website Glassnode, as of January 2021, exchanges held 2.36 million Bitcoins, accounting for 12.7%, and funds, custodians, OTC counters and other institutional entities accounted for 31.7% of Bitcoins. Given that the total number of Bitcoins is only 21 million, and the addresses that have recently purchased large amounts of Bitcoin are traditional large funds, it is foreseeable that the concentration of large Bitcoin addresses will further increase. In other words, this round of price increases for Ethereum and Bitcoin has been driven by the inflow of incremental funds from traditional institutions. Most of the coins flowing in the market have been slowly captured by large institutions. In turn, the high prices have kept retail investors out of reach. The wealth gap represented by Wall Street in the United States will reappear in the cryptocurrency field. Therefore, Dogecoin is another manifestation of the anti-Wall Street elite culture of the American people. Since the subprime mortgage crisis in 2008, the structural problems exposed by the U.S. economy have not been resolved. Even during the epidemic, the wealth of Wall Street elites has continued to grow tremendously, and the American people still need the government to issue checks to make ends meet. The original intention of the retail investors who drove up GameStop's stock price at the beginning of the year was very simple, which was to protect their childhood memories and make Wall Street lose money. Judging from the final result, Citron Fund's surrender did achieve the direct purpose of retail investors, but the deep-seated demands behind it were not actually refined, nor were they paid attention to by the elites represented by Wall Street. Even the US Securities Regulatory Commission (SEC), which acts as an arbiter, announced that it will investigate whether there is any suspicion of market manipulation in the US Tieba "WallStreetBets" section. The "Bill Hwang" incident that just exploded shows that institutional investors can also abuse tools, but the treatment of institutional investors and retail investors is very different. The American people’s wealth dreams and anti-Wall Street narrative require a new investment target, and the geek culture of cryptocurrency itself and the ironic spirit of Dogecoin perfectly fit this. Therefore, Musk calls it "there is a way to steal." To the elites it was a sham, but to the American people it was a plebeian orgy. There is no essential difference between Dogecoin and GameStop as investment targets, but please note that its skyrocketing rise is not a simple attack on Wall Street by retail investors, but a huge bubble spawned by the public’s dream of wealth during the bull market craze combined with the anti-authority spirit in American culture. The speech of Barry, the boss of Grayscale Capital, is tantamount to actively popping this bubble and standing on the opposite side of retail investors. This allows the two forces to collide again in the field of cryptocurrency. Who loses and wins this time, and whose side are you on? Since Barry Hilbert announced his short selling, on May 9, according to CoinMarketCap data, Dogecoin fell by as much as 40% in 24 hours, and currently has narrowed to around 25%. However, on May 10, the price of "SHIB" (Shiba Inu Coin), an altcoin that imitates Dogecoin, tripled in a single day and became a hot search topic on Weibo. Its topic was even more popular than Dogecoin. Recommended reading  Unauthorized reproduction is prohibited  |
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