Cynthia Lummis Speculates Blockchain Could Fix Stock Manipulation in GameStop

Cynthia Lummis,

February 1, 2021

Reading Time: 2 minutes

News on Gamestop has been making headlines worldwide, especially recently after corrupt firms put a stop to its stocks trading once it hit the level price of $450.

Wyoming state senator, Cynthia Lummis, said that blockchain could help fix this and similar market manipulations. She argues it out like this: if the stocks were issued on a blockchain, the mainstream investors would own their stock shares to bring a claim on a broker.

The technology would also ensure that the US SEC monitors the markets more closely as per their regulations. Wallstreet, under this technology, would provide capital to society more accurately.

Gamestop Drama

Gamestop is a video game outlet based in the United States. The business took a toll for the worst after most gamers opted to download games online instead of purchasing them at a subscription. Large investors such as wall street bet that their stocks would fall.

Not everyone subscribed to this opinion. Members of a Reddit stock market discussion group particularly encouraged others to invest in the market. Gamestop was undervalued according to them and would soon spike up in stock prices.

More ‘smaller’ investors bought into the company fuelling its rapid rise in market value. These rising stocks got troublesome for larger investors that had predicted its fall.

This week alone, Gamestop made a jaw-dropping increase of nearly 1700% of stock value since January 2021. Short sellers are now being forced to buy shares in order to cover their losing bids, which shoots the share price even further.

Politicians Stand with their own

Robinhood and Ameritrade trading channels blocked retail traders from purchasing Gamestop stocks after they drove prices to a $450 margin. This move incited a lot of criticism from politicians and business leaders because hedge funds are free to trade stocks as they best see fit.

US Representative, Alexandria Ocasio-Cortez, insisted that Robinhood needed to explain to us more on their decision to block retail traders from purchasing Gamestop stocks.

If the stocks were issued on blockchain, Robinhood would not have been in the capacity to do that.

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