[iso1631]

> what isn't ambiguous is that GameStop stock wasn't worth nearly 400 dollars

1 bitcoin is worth $50,000 and has less utility. Tesla stock is worth more than every other car company put together, yet I don't see half of global car sales being Tesla.

Are you suggesting that the government should not allow people to freely trade bits of paper between themselves based on your view of how valuable something is?

[mdasen]

> 1 bitcoin is worth $50,000 and has less utility. Tesla stock is worth more than every other car company put together, yet I don't see half of global car sales being Tesla.

I think there's a distinct difference here. Bitcoin believers think that bitcoin is worth that and that it's so important. Tesla believers think that Tesla will take over the world, become the self-driving handle-every-transit-issue company, and become dominant in the power industry as well. I'll throw in that gold is of extremely limited utility (for jewelry and industrial purposes), but people think that's really valuable. Warren Buffet talked about how gold was worth as much as 16 ExxonMobiles plus all the crop land in the US plus a trillion dollars left over. Would you rather have a cube of gold that fits in a baseball infield (68 feet per side) or companies that make stuff. If you had $15T today, would you buy the FAANG + Microsoft and still have $7T burning a hole in your pocket or would you go for the shiny cube!

But people still believe gold has so much value.

That contrasts with GameStop where the dialogue was about forcing someone who had a short position to have to buy the shares to cover their position at a high price and drive the price up further. Most people who invest in gold aren't thinking, "I'm going to make money off the bigger idiot who comes after me". People who believe in Bitcoin aren't thinking they have to hoodwink a bigger idiot into buying them in the future - they're just so awesome! People who are Tesla bulls think Elon Musk is going to change the world and grab all the profits across several industries.

I'm not saying one way or the other that the government should regulate these trades, but there is a big difference. In one case, people genuinely believe in the things they're buying. In the other, they're trying to manipulate or take advantage of something in the system - in this case, that someone was short and could be squeezed if enough people/money went in on the squeeze.

[chii]

> forcing someone who had a short position to have to buy the shares to cover their position at a high price and drive the price up further.

why shouldn't that be allowed? If the person shorting has a demand for the share (to cover their position), they must pay for their demand. They knew this could happen going in, and assumed the risk.

[pid_0]

>Most people who invest in gold aren't thinking, "I'm going to make money off the bigger idiot who comes after me".

Uh... this is literally how any investment works.

[mdavis6890]

No it is not, at all. Investments [are believed to] have intrinsic value that may be realized over time. I DO NOT need to sell an investment to make money on it. It is this belief in enduring value creation that gives an investment its present value, and certainly I can buy or sell the investment at any time based on this present value. Circumstances can change the relationship between the value creation and present value, and give me more opportunities to exit an investment profitably, if I want to.

But an investment is a belief in enduring value creation, not a belief in selling to a greater fool, or selling at all.

This is why (for the most part) gold, currencies and other 'stores of value' ARE NOT investments, in the proper sense.

[pid_0]

>I DO NOT need to sell an investment to make money on it.

You literally cannot make money from an investment without selling it (sans dividends, rent, etc but thats not really what we are talking about)

In the case of BTC and TSLA, people are ONLY buying it because they expect it to go up, and then they will sell to someone "idiot"

[belltaco]

Why does it necessarily have to be an idiot? If you bought a home in 2000, and you sell it today for 4 times the cost to someone that wants to live in it, are they an idiot?

[manfredo]

Bitcoin, and decentralized currencies in general, are a novel thing. They absolutely do have utility, especially when it comes to circumventing government asset transfer controls. Plus, there's a fixed amount of bitcoin that will ever be available. And we're already close to that limit, 80-90% there.

Tesla is a pioneer in the electric vehicles industry. It's in a particularly good position to profit from decarbonization movements.

Gamestop is neither of these things. It's a brick and mortar store that was being made obsolete by digital distribution, and even more so from coronavirus.

Should pump and dumps be legal? That's just reading bits of paper based on people's views of how valuable they are. But nobody serious doubts that pump and dumps schemes are justifiably banned. Yes people should mostly be free to buy and trade as they see fit. But some people are willing to act in bad faith to exploit others.

Was Gamestop's meteoric rise a pump and dump? In part it was a short squeeze, but it also had all the hallmarks of a pump and dump. We keep saying that it was a bunch of internet people getting rich off hedge funds. But the people who were actually getting screwed were the ones who bought in at $100+ a share and lost over half their money. Nobody was ever under any illusion that the stock would remotely stay this high, and people were just hoping to get lucky and sell right before the crash. This isn't the kind of behavior someone wants in the stock market.