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The Tale of Two Markets: Shorting, Longing, and the Fight for Control
In the wild, volatile world of financial markets, two parallel universes—crypto and traditional equities—offer a stage for traders, exchanges, and retail warriors to battle over wealth and power. Let’s dive into a narrative that follows two traders: Alex, shorting Bitcoin (BTC) in the crypto realm, and Jamie, going long on GameStop (GME) in the equities market. Through their journeys, we’ll uncover the monetary flows, the hidden hands of exchanges and brokers, and the ultimate lesson about who truly controls the market. 1 reply
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Act 1: Alex Shorts Bitcoin at $100,000 and bets it’s overvalued. On March 9, 2025, he opens a short position on a major exchange hypothetical CryptoXbwith 2x leverage. He puts up 0.5 BTC ($50,000) as collateral, borrows 1 BTC , and sells it immediately, pocketing $100,000 in stablecoins. His plan? Buy back the BTC cheaper later, repay the loan, and keep the difference. Monetary Flow Alex’s $50,000 collateral locks into CryptoX’s vault. The lender—another user or CryptoX itselfearns 0.05% daily interest (18.25% APR). After 10 days, Alex owes 1.005 BTC ($650 extra at $130,000/BTC). If BTC drops to $80,000, he buys back 1 BTC for $80,000, repays 1.005 BTC ($80,400), and nets $19,600 profit—a 39% return on his $50,000. #Leverage #CryptoProfit
But the market turns against him. BTC climbs to $120,000. His unrealized loss is $20,000 ($120,000 - $100,000), cutting his equity to $30,000 (0.25 BTC). At $130,000, the loss hits $30,000, and liquidation. .See last post in thread for remainder of this section) 1 reply
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CryptoX’s insurance fund, plus a $500 liquidation fee. Alex’s $50,000? Gone. #Liquidation #CryptoLoss
Monetary Changes:
Alex: -$50,000 (0.5 BTC lost).
Lender: +$650 (0.005 BTC interest), 1 BTC returned (now worth $130,650 vs. $100,000 lent).
CryptoX: +$35,500 ($35,000 excess + $500 fee), plus $230 in trading fees (0.1% on $100K short, $130K buyback).
Market: 1 BTC buy at $130,000 reduces sell-side liquidity, pushing prices higher. #ExchangeProfit #MarketImpact
CryptoX sees the bigger picture: 10,000 BTC shorted across users, liquidations clustered at $132,000. With its 5,000 BTC ($650M) insurance fund and order book data, it buys 500 BTC at $125,000, triggering a cascade to $140,000. 1 reply
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Act 3: The Power Plays
In crypto, CryptoX exploits its data—order books, liquidation prices—to engineer squeezes. It could’ve pushed BTC to $132,000, netting $366M, then used its fund to long on Exchange B, turning market risk into a $368.74M windfall. Interest rates (18.25% APR) pale next to these margins (200%+ per move), showing how exchanges profit beyond lending. #CryptoExchange #Manipulation
In equities, GME’s squeeze wasn’t broker-orchestrated—retail drove it. But brokers and market makers (e.g., Robinhood, Citadel) profited from fees and spreads, even as they restricted buying (not selling) on January 28, 2021, sparking outrage. The DTCC’s custody enabled 140% shorting via re-lending, a manipulation tool hedge funds wielded until retail flipped the script. #RetailRebellion #BrokerGames 1 reply
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Act 4: Shutting Down the Middlemen
What if Alex and Jamie fought back against centralized control?
Crypto: Alex learns CryptoX’s game. If users stop lending BTC (reducing borrowable supply) or lock it in non-custodial wallets (e.g., Ledger), shorting dries up. Borrowing costs soar (50%-100% APR), and CryptoX can’t trigger liquidations easily. Its $350M cascade profit shrinks, and leverage-driven manipulation falters. Liquidity shifts—less BTC for shorts, more in retail hands—tilting power away from exchanges. #NonCustodial #BitcoinWallet
Equities: Jamie opts out of BrokerX’s lending program. If 50% of GME’s 71M float (35.5M shares) stops lending, short interest drops from 140% to 70%. Borrowing fees jump (30%-100% APR), deterring hedge funds. Better yet, Jamie direct-registers his 100 shares with Computershare, pulling them from the DTCC. If 70% of the float (50M shares) follows, only 21M remain lendable—shorting collapses to 30%.. #DirectRegistration #DRS 1 reply
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Act 5: The Lesson of Control
In both markets, centralized players—CryptoX, BrokerX, the DTCC—thrive on custody and lending. CryptoX uses liquidations and insurance funds to rake in $368M, while BrokerX and the DTCC enable overshooting GME, pocketing fees as shorts bleed. But their power hinges on retail participation. #CentralizedControl #MarketPower
Crypto: True decentralization means non-custodial wallets. If Alex and millions hold BTC off-exchange, CryptoX’s lending pool shrinks, its manipulation weakens, and retail dictates supply. Volatility persists, but exchange profits (50%-100% margins) erode without captive collateral. #DecentralizedFinance #HODL
Equities: GME’s warriors showed retail can win by buying and holding, but direct registration locks it in. Moving shares from the DTCC to Computershare mirrors crypto’s wallet shift—short sellers lose ammunition, and retail controls the float. #ApeStrong #GMEControl 1 reply
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Epilogue: The Future
Alex lost $50,000 to CryptoX’s game, but if he’d held his 0.5 BTC in a wallet, no liquidation could touch him. Jamie won $49,800, but direct-registering his shares could’ve doubled that by choking short supply. In both worlds, centralization—exchanges lending BTC, brokers and DTCC lending GME—fuels manipulation and middlemen profits. True control for retail lies in opting out: non-custodial BTC wallets and DTCC-free GME shares. Imagine a future where GME squeezes again—say, in 2026 or this week (No Dates but it is coming), soaring to $2,000/share and costing shorts $200B. This disruption rattles traditional markets, and companies, starting slowly but accelerating over time, tokenize their equities on blockchain. GME’s apes become the voice, educating the masses on how these mechanisms—shorts, longs, liquidations—work in a decentralized system, free from DTCC or broker meddling. 1 reply
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(Act 1 pt 2)
The exchange buys back 1 BTC at $130,000, uses Alex’s 0.5 BTC collateral (now worth $65,000) to cover part of it, and repays the lender 1.005 BTC. The excess—$65,000 - $30,000 = $35,000 (0.27 BTC)—goes to CryptoX’s insurance fund, plus a $500 liquidation fee. Alex’s $50,000? Gone. Monetary Changes:
Alex: -$50,000 (0.5 BTC lost).
Lender: +$650 (0.005 BTC interest), 1 BTC returned (now worth $130,650 vs. $100,000 lent). It nets $350M in premiums, $1.3M in fees, and $7.5M trading profit. Then, using 1,000 BTC from the fund ($130M), it opens a 5x long on Exchange B at $125,000 (5,000 BTC position), cashing out at $140,000 for a $75M gain. Total haul? $368.74M. Tfund grows by 71 BTC ($9.94M), proving it’s both shield and sword. #ShortSqueeze
CryptoX: +$35,500 ($35,000 excess + $500 fee), plus $230 in trading fees (0.1% on $100K short, $130K buyback).
Market: 1 BTC buy at $130,000 reduces sell-side liquidity, pushing prices higher.
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