161–170 of 454 posts
Dumb question, but is price manipulation wrong when it's for something that doesn't have a "true" price? Like I get why it should be illegal for stocks. If you pump it and the price reverts back to some true price (calculated from expected future earnings or whatever), then people who bought it expecting it to be at an efficient price will lose money. In the case of crypto where everything is driven by supply and dem…
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Looming rate hikes combined with ever increasing correlation of Bitcoin to equities suggests you may even get your day this year.
It's sad to see people genuinely wanting to watch others lose wealth so they can relish in it.
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Author here. I considered this, but rejected most of those hypotheses. > Retail and futures traders create instability by placing leveraged trades and stop orders that amplify swings. True > Market makers are aware of instability and design their bots to turn off so that they don't end up on the wrong side of a liquidity cascade. Algorithmic traders, yes. Market makers absolutely not. MMs want to be there as much as…
Market makers don’t print riskless money, they are affected by a very real risk of divergence loss.
Bid/ask spreads were as wide as double or triple digits during the liquidation event. At this point the only limit to riskless profits is your liquidity and the speed at which you can execute.
Eh 20-ish years ago the shit happening on Island and Archipelago would blow most people’s minds. Undocumented, conditional, non-displayed order types. Routine wash trading. Shear-but-don’t skin multi-venue arbitrage. The ECNs were the Wild West. Smoke-filled dark pools. Island and Arca are NASDAQ and NYSE now. But Ben, US equities have intrinsic value unlike this BTC garbage! Well unless they pay no dividend, have du…
> US equities have intrinsic value Really? My impression is that many US equities in 2022 are more like Reddit up/downvote scores than a reflection of intrinsic value. Which isn't a bad thing in my opinion, by the way.
Eh 20-ish years ago the shit happening on Island and Archipelago would blow most people’s minds. Undocumented, conditional, non-displayed order types. Routine wash trading. Shear-but-don’t skin multi-venue arbitrage. The ECNs were the Wild West. Smoke-filled dark pools. Island and Arca are NASDAQ and NYSE now. But Ben, US equities have intrinsic value unlike this BTC garbage! Well unless they pay no dividend, have du…
With crypto these days alpha is still very easy since it's a small backwater. Microstructure is all complete bullshit (and has been as long as these markets existed), and leverage is basically unlimited. A huge sell order is more likely to indicate buying than selling, for example. At least liquidation cascades don't literally hit 0 like they have in the past, which is an improvement. There are also all sorts of unpu…
Dumb question, but is price manipulation wrong when it's for something that doesn't have a "true" price? Like I get why it should be illegal for stocks. If you pump it and the price reverts back to some true price (calculated from expected future earnings or whatever), then people who bought it expecting it to be at an efficient price will lose money. In the case of crypto where everything is driven by supply and dem…
None of what we have is great, and I’m not going to bother justifying traditional financial markets. But cryptocurrencies represent a massive moral hazard to our handling of hundreds of millions of peoples’ economic security.
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> but there is no revenue for a digital currency Isn't there? Ethereum kind of has revenue in that transaction fees for smart contract execution are burned (effectively a stock buyback) It has around ~$19B in revenue extrapolated at the current rate (although it's issuing more than $20B a year for now, planning to reduce issuance some time later this year)
That's like MSFT issuing MicrosoftDollars to pay their dividents.
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I'm not here to defend Elon Musk, but since he is tentatively experimenting with accepting crypto as payment for some of his products, I assume crypto is in his wheelhouse
That would be a wrong assumption, I believe. You don't need to know much about crypto to be able to accept it.