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What do memecoins and meme stocks have in common?: A review of ‘The Trolls of Wall Street’

source-logo  blockworks.co 11 June 2024 13:55, UTC

Nathaniel Popper’s new book — The Trolls of Wall Street: How the Outcasts and Insurgents are Hacking the Markets — isn’t about crypto per se. However, his dramatic telling of the WallStreetBets subreddit’s rise is still relevant to today’s crypto industry.

In fact, I would argue that the chronically-online horde that makes up so much of r/WallStreetBets’ story played an important role in shaping the crypto space, despite some of the WSB moderators’ best efforts to keep crypto separate for so long.

The Trolls of Wall Street tells a story that most of us are quite familiar with — at least the most famous elements, like the GameStop and AMC memestock frenzies (some of which, in perfect timing for Popper, are coming back in trend this very week).

But what’s most interesting to the crypto audience is how Popper draws parallels, both directly and indirectly, between the memestock craze and the crypto craze. Popper’s inclusion of sociological research about the young men that made up such a large part of the early online trading communities shares important similarities with the crypto space.

“This was a new kind of laddish culture for a changing universe in which men were falling behind.

Sometimes they just lashed out at the world and their female peers who were pulling ahead. But they spent just as much time making fun of one another and themselves in a way that allowed them to laugh rather than cry at their misfortune. […] Rather than using these terms as insults, they were embracing their status as socially challenged outsiders. It had the pleasing secondary effect of pissing off ordinary people, who viewed these terms as pejorative epithets.”

Doesn’t this sound like a description of Crypto Twitter?

But while there was clearly tons of overlap between the obsessive retail day traders on WSB and the growing crypto trading space, Popper’s book highlights a different aspect. He really nails down that the original ethos of the WallStreetBets subreddit wasn’t to make as much money as possible and brag about it online. Instead, it was a refuge for those (mainly men) who wanted to genuinely learn about retail stock trading in a like-minded community.

Read more from our opinion section: The history of NFTs you didn’t know you needed: A review of ‘Token Supremacy’

In fact, what was most surprising to learn was the innocent quality of the early r/WallStreetBets days. Initially, many of the main subreddit contributors warned about the dangers of options trading and shared fears about what Robinhood’s overly simple UX (and terrible customer service) could do to the finances of the inexperienced.

To see how that community then turned into the massive crowd that inspired Elon Musk to tweet “Gamestonk” so many years later is a bizarre story that those in crypto can learn from. Doesn’t it sound familiar that a space intended to help the financially disenfranchised ended up in a giant, messy massive money grab?

Because somewhat ironically, Popper’s in-depth exploration of the WallStreetBets subreddit — a markedly anti-crypto space for so many years — also ends with so many pieces of the WSB movement trying to turn to crypto once they saw where next to find the easy money.

Jaime Rogozinski, the original creator of the subreddit, put both his and the WSB name behind a dapp for after-hours stock trading that failed miserably even after a promotional crypto cruise around Manhattan. Some of the WSB moderators began to come up with ideas to get paid for their moderation by launching NFTs to fund the subreddit. And even the GameStop investor who inspired the entire movement, Ryan Cohen, tried to do a crypto and NFT-pivot that also failed, stoking the ire of many WSB supporters who had believed in him for so long.

As I mentioned earlier, Popper’s book on a three-year-old retail stock trading phenomenon is eerily more relevant than ever this week, as we’re seeing a return of some of WallStreetBets’ major players. The book is also unfortunately and weirdly prescient about how cryptocurrency and Donald Trump are becoming intertwined in this election season:

“Cryptocurrencies appealed to many of the same instincts that had led to the rise of Trump and the broader manosphere. The challenge that [bitcoin] represented to central banks and governments with its bid to create an alternative currency — played right into the suspicion of government power that had animated Trump’s campaign.

Bitcoin offered a way to defy the wisdom of Boomers and show your disdain for the status quo.”

If you want to understand one of the most unusual financial movements in recent years, this book is a good place to start. I found The Trolls of Wall Street to be a valuable resource for anyone looking to parse the unique dynamics of the WallStreetBets phenomenon and its relevance to current trends across Web3.

I don’t care much about tech, I don’t care a whole lot about finance, either. I care about writing stories and watching weird things unfold. And that’s why I’ve ended up in crypto.

But because I’m missing that passion for what crypto and blockchain are all about — finance, tech, privacy, yadda yadda — I’m going to write instead about what I am actually interested in. Everything about crypto that has very little to do with crypto.

That’s what this column will be about. All the tangential stories that come out of the blockchain and crypto space, what I think about them, and how I navigate it all as a skeptical former Russian literature major.

It’s precisely my perch as an outsider that lets me do what I do: Opine on all sides of any crypto issue, no strings attached, no skin in the game.

If you want to talk crypto with me, let’s go off topic.