Reddit and Twitter as New Pump Tools: To Leave or To Believe?

They were almost uniformly instigated by speculative influencers (AKA Twitter/Reddit celebrities) – be them stories about the miraculous rise of the bankrupt company GameStop (GME) or the violent ups and downs of Bitcoin and DOGE cryptos on Twitter posts by Elon Musk. How fair and manageable is this new reality of the markets and how can a private investor survive in it?

Bearing in mind that about four-fifths of the world's capital markets are in one way or another of the U.S. origin, the laws on securities and stock exchanges are being constantly polished and improved, starting with the historical Securities and Exchanges Laws of 1930 and 1933, and following their various additions and amendments – the laws of Glass Steagall, Sarbanes-Oxley and the Rule of the now deceased Volcker. Then why, despite such tight control over the markets, do they still often suffer from manipulation and insider trading activities?

This is the biggest problem of modern regulation: the constant lag behind the dynamic reality of the modern digital world. For the current US Treasury Secretary Janet Yellen to be ready to propose to Congress her consideration of the possibility of basic regulation of crypto markets, the latter should have grown to trillion-dollar capitalization and to the stage when they no longer need external regulation at the level of “how, where and when”. The SEC, the US regulator for the securities markets, once was engaged in memorable war of words with Elon Musk prompted by the latter's desire to write on social networks and talk about his brainchild Tesla – the company's being completely public by its status – whatever he wanted to in terms of its potentially harmful impact on markets. So what to do with social media in this respect? Hmmmmm ... something needs to be done for sure! But what exactly and how? Great question! Other equally important questions – is it technically possible and is it necessary? No reply.

Okay, social media ended up shutting down the politically incorrect Trump. Should we now turn off Musk's inappropriate behavior and what to do, say, with freedom of speech of the owner of Ripple, the controversial Brad Garlinghouse? Maybe someone will vote to ban the CEO of the recently going public via IPO CoinBase? “Just in case”? We need to know where the red lines were being drawn to figure out if one managed to cross them and whether we must care at all!

By weighing those options, although in the name of making markets safer and more transparent, we will produce "Internet prisoners of conscience"! Instead, we badly need some sort of a ranking system to rate these bad actors for their prudence and integrity. A person using his name regularly to abuse people’s trust by issuing contradictory declarations and thus gradually, post by post, undermining his reputation with investors, should not be punished by the regulator. He or she should be punished by us – by the crowd. Parodies, memes and various cartoons should serve as the weather barometer, the framework of which will determine future trust in a particular social character affecting the market. Remember the good old tale about a man who, just out of fun, used to repeatedly alert his entire village with shouts of “wolves are coming! wolves are coming! " And what happened to him in the end when the wolves really arrived, but no one believed him anymore? This story is about that!