Spoiler alert, I have no idea what the timeline is for all of this and the fallout is going to catch most everyone off guard I’m pretty sure. That said, I’ve said before that based on the time frame of the chart patterns and setups themselves, it’s very reasonable to assume this phase is going to last for a good long while. A breakout of a 5, 10 or even 20 year base (like $GME) isn’t going to resolve itself in a month or two. It’s hard for me to see this not taking years to fully develop and play out, and the only way I see that not happening is because we see literally years worth of upside priced into these plays in a much shorter amount of time. All I can say on the timeline estimations is be prepared for it to drag on and test your patience and resolve, but also be ready for anything including some of the most violent upside price action you’ve ever seen. Wave 1 in 2020/21 was unprecedented in it’s magnitude and scope and wave 2 should be able to build upon that.
As for the fallout, I believe it’s inevitable that this ends up breaking the market to a large degree – or at least the market as we know it. All this potential madness stems from hedge funds and market markers who knowingly abuse the system and sell short that which they don’t own. Not only that which they don’t own but that which they can’t borrow and doesn’t even exist! If there are more shares sold short than should be trading in the open market, that is a broken system. They have gotten away with this for literally decades but what we’re going to see will expose this for what it is, though you can be sure that retail traders and Roaring Kitty will get the blame from the mainstream media.
I believe this to be inevitable because the short squeezes, lead by $GME, will force short covering on a scale that has never been seen before. Hedge funds with too much exposure will go belly up but their shorts won’t disappear. Someone out there will own that counter party risk, namely their brokers, and that’s when the fun begins and the system gets shaken to it’s core. What this all looks like is anyone’s guess but it’s not going to pretty. It’s going to force major changes purely out of necessity.
The obvious problem is the system has allowed entities to sell short more than should ever have been sold short. It’s counterfeiting on a grand scale, which many have known about for years, but this is going to be the undeniable proof of that “conspiracy theory”. The obvious answer to the obvious problem is a decentralized method of accountability, which makes tokenization of equities on the blockchain the next logical step.
I have no doubt this is where we’re heading, but the trillion dollar question is what does the path look like as we make our way closer to this inevitable solution? Trust me, the powers that be do not want to relinquish their authority and ability to manipulate and rig the system with systematic counterfeiting of shares, but this event is going to force that change upon them. Just remember when it happens it’s not the little guys and Roaring Kitty that are to be blamed, it’s the toxic system which allowed all of this unmitigated risk to reach this level.