- After pumping GameStop's stock, some reports claimed Reddit group WallStreetBets planned to do the same to silver.
- Redditors rebutted the claim, noting that pumping silver would actually benefit big hedge funds.
- They claimed that a silver rally was misinformation put out by the hedge funds themselves.
Notorious Reddit group WallStreetBets (WSB) is not trying to pump the price of silver, according to a post published today. This comes in the face of reports claiming the group was going to give it the “GameStop treatment.”
On the contrary, WSB is actually against creating a silver squeeze because many big hedge funds have long positions on it—not short ones.
“This is BS & the straight up the ANTITHESIS of who we are,” the post said, adding, “By buying silver/going long on silver, you would be directly putting money into the pockets of the EXACT HEDGE FUNDS ON THE OTHER SIDE OF $GME. The hedge funds are LONG silver NOT short silver.”
The entire principle behind boosting the price of GameStop was to liquidate the hedge funds that were shorting it, causing them to exit the trade at huge losses. The ultimate purpose was to send a message to Wall Street—which it certainly did. But when it comes to silver, the exact same hedge funds are betting its price will go up, so any price boom will play into their hands.
While Reddit is a pseudonymous platform, which means that no single message can be considered an “official” statement from the WSB, the post in question has already been upvoted over 64,000 times and received roughly 500 community rewards. This could suggest that it somewhat reflects the overall community’s sentiment.
Further, the post claimed that the source of the reports claiming WSB was behind a silver rally was misinformation put out by the hedge funds themselves.
“This ‘squeeze’ that all these people are referring to is definitely not a ‘squeeze’ at all and is an artificial hedge-fund driven attempt to reduce the GME momentum and we should all be cognizant of the media manipulation and happening everywhere including right here,” he summarized.
But while WSB isn’t pushing for a silver squeeze, there has been some movement in the silver market. On Thursday, a number of buyers indeed flooded iShares Silver Trust, pumping the price of the metal by up to 6.8%.
The volatility on the silver market that ensued was “mind-boggling, breath-taking, it’s shocking really,” Bloomberg cited commodities market consultant James Gavilan.
However, even if the WSB really wanted to short squeeze silver—which they apparently don’t—it would be not nearly as easy as pumping GME since the two markets’ sizes are simply incomparable.
For example, the shenanigans around GameStop’s stock resulted in its market capitalization growing from $1.2 billion at the start of 2021 to $24.2 billion last week. At the same time, silver’s total market cap amounts to around $1.635 trillion today, meaning that Redditors would require a lot more money to move this giant. Not that the challenge would daunt WSB.
Stay on top of crypto news, get daily updates in your inbox.