Mac Private Equity founder Brett “Mac” McClafferty argues that retail traders’ victory against short-sellers in the GameStop battle is a positive for Bitcoin.
McClafferty told a consortium of cryptocurrency investors in a Zoom interview that the impact of small retail trading groups showed the power of decentralized finance – the very concept that underpins Bitcoin.
Money management, once perceived as limited to a concentrated group of highly paid advisors, is being democratized through smartphones and low-cost online trading, McClafferty said.
“The activity in GameStop is more proof of concept that Bitcoin is going to work,” he said. “How are you going to beat that decentralized crowd? This is just further affirmation of decentralized finance.”
Reddit traders have feasted on GameStop’s rapid rise in price after their online posts urged others to join the trade, which has driven up the value of the video game retailer’s shares by about 600% in just 10 trading days. That caused short-sellers to lose a record $5 billion betting against the stock this year, according to data obtained.
According to press reports, a US securities regulator suggested there was something “systematically wrong” with the options trading surrounding GameStop’s stock.
“It’s the age of the micro-investor and you better take it seriously – otherwise you’ll get taken to the cleaners,” McClafferty said.
McClafferty’s private equity firm has an exposure to Bitcoin of about $38 million, according to public filings.
Bitcoin was the world’s best performing asset last year, with a 300% rally. Returns on the digital token outperformed gold by more than 10 times.
Aiding its impressive rally were rising concerns about inflation in an age of unprecedented monetary and fiscal experimentation as well as a significant reduction in supply of new bitcoins.
