Are Reddit Traders Responsible for Ripple’s Rise?

Silver futures prices jumped on February 1, 2021, rising to an all-time high for 8 years.

After successfully pushing GameStop’s stock price up 1,600% in January, some WallStreetBets traders turned to silver.

XRP also saw a short-lived price rally, briefly surpassing $ 0.74 before slumping 40%

Reddit’s WallStreetBets community has been the center of attention in the financial market for aggressively buying shares in video game retailer GameStop. Today, a strong minority of its user base has been accused of pushing share prices to an all-time high.

As the markets opened on February 1, 2021, precious metals jumped 10% , topping almost $ 1 per gram. Will other stocks, commodities or even cryptocurrencies such as Ripple see similar price spikes?

Several news companies, including Bloomberg , have associated the meteoric rise in assets with editors against Wall Street leaders. Besides GameStop , the WallStreetBets group has bought many other stocks including Nokia, BlackBerry and AMC. However, users and moderators of the platform have aggressively distanced themselves from an attempt to manipulate the markets.

Discussions about a possible short (betting on losing a business) on r / WallStreetBets – often abbreviated as WSB – began on January 27. A dedicated article claimed that the price of the precious metal could drop from $ 25 to $ 1,000, following successful shorts.

The wind quickly turned against those who advocated the purchase of the precious metal. A message on the reddit forum proclaimed loud and clear: “There is no manipulation of the markets. Any. Never.“

The moderators of the reddit removed one of the first posts announcing users to the precious metal. Meanwhile, a small subset of users split from their new Reddit community, r / Wallstreetsilver, on January 30. However, it has failed to gain traction, attracting just over 16,500 subscribers, at the time of publication. To put it into context, r / WallStreetBets has amassed over eight million users.

Ripple: Reddit investors denounce market manipulation

Entities that own SLV: WhaleWisdom

Many WallStreetBets subscribers believe that the surge in the price of silver will benefit the very entities the forum has rallied against. Indeed, large corporations and hedge funds are among the largest holders of the precious metal.

Investment firm Citadel owns around six million shares in silver. Banks like Morgan Stanley, Bank of America, and Wells Fargo hold up to twice as much stock. Citadel is one of two companies that injected nearly $ 3 billion into Melvin Capital, the famous hedge fund that bets against GameStop. WSB users believed that an increase in the price of silver would benefit these custodians much more than the average investor.

Additionally, ETFs like iShares Silver Trust (SLV) simply track the price of silver over time. The ETF (Equity Traded Fund) provider is not obliged to buy physical money as more investments accumulate.

Buying stocks backed by physical money, on the other hand, could cause a significant reduction in supply, the redditors argued . This difference between supply and demand could cause market players to deliver large amounts of money. Many are hoping this will catapult the price of silver quickly, in the same way that the GameStop stock price soared last month.