August 12, 2022

Robinhood and GameStop proved we need a new financial system

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King Midas is most famously remembered through the fable we tell our kids that the king could turn everything he touched into gold. At first, it was a great idea that his greed turned even food into gold, leaving him wealthy but unable to live. 

Robinhood’s CEO and its board had the impossible King Midas dilemma this week: deciding whether to side with their customers and let them make over $15 billion in profits or halting trading and allow only the sale of GameStop (GME) to enable the money-hungry shorts to cover their position at lower prices and avoid massive losses. Robinhood showed everyone that its favorite color is money, and its friends are the same people who make sure you almost never win trading on Wall Street.

Related: GameStop saga reveals legacy finance is rigged, and DeFi is the answer

Greed will win again and again

As it usually does on Wall Street, greed triumphed. It was not only Robinhood, Interactive Brokers, Ameritrade, Charles Schwab, and Citadel and Point 72 but all centralized finances sided with the shorts.

Robinhood launched a platform and an app that represented the people and that was always going to act in the users’Title: Robinhood and GameStop proved we need a new financial system
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Published Date: Sun, 07 Feb 2021 17:33:00 +0000