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It is in fact not the case that there is a single exchange on which IBM trades (it is listed on the NYSE, CsE, and at various places abroad). Liquidity factuall

It is in fact not the case that there is a single exchange on which IBM trades (it is listed on the NYSE, CsE, and at various places abroad). Liquidity factually does exist in different amounts at different places; this is a major reason why HFT works. Bitcoin is volatile because it has a small float, terrible market infrastructure [1], a relatively unsophisticated set of traders, a Wild West of market manipulation [2], and no fundamentals to get in the way of wild gyrations. [1] The biggest Bitcoin exchange presently is functionally incapable of transacting in dollars. [2] As one of many things that could be said here, the biggest Bitcoin exchange earns commissions in Bitcoin and then “dollarizes” then by selling the Bitcoins on their own exchange, to their customers.

down 9y ago
please take a look at the gold chart after the gold standard was dropped, same volatility.
decentralised 9y ago
What you say is mostly correct but the undertone "wild west", "unsophisticated", "manipulation", etc fails to address the point because that is true of most hedge funds as well.
- decentralised 9y ago
  While the downvotes serve to show disagreement the lack of arguments also shows where the downvotes come from.
  - decentralised 9y ago
    :-)
thisisit 9y ago
He says "single ledger" which I think alludes to the NBBO rule in a normal stock sale. Brokers are required to guarantee that customers get best prices while buying/selling. So they aggregate prices from all the exchanges, at least in US, and present it to the customers. When the trades are placed while they might be routed to exchanges for execution but they are effectively working as a single market. Bitcoin volatility has lot of problems, a lot of them due to market micro-structure. There is also no dedicated market maker because the risk in bitcoin deal making would be huge.
leoc 9y ago
> It is in fact not the case that there is a single exchange on which IBM trades (it is listed on the NYSE, CsE, and at various places abroad). Liquidity factually does exist in different amounts at different places; this is a major reason why HFT works. Ground loops... /showerthought

down 9y ago

please take a look at the gold chart after the gold standard was dropped, same volatility.

decentralised 9y ago

What you say is mostly correct but the undertone "wild west", "unsophisticated", "manipulation", etc fails to address the point because that is true of most hedge funds as well.

decentralised 9y ago
While the downvotes serve to show disagreement the lack of arguments also shows where the downvotes come from.
- decentralised 9y ago
  :-)

thisisit 9y ago

He says "single ledger" which I think alludes to the NBBO rule in a normal stock sale. Brokers are required to guarantee that customers get best prices while buying/selling. So they aggregate prices from all the exchanges, at least in US, and present it to the customers. When the trades are placed while they might be routed to exchanges for execution but they are effectively working as a single market. Bitcoin volatility has lot of problems, a lot of them due to market micro-structure. There is also no dedicated market maker because the risk in bitcoin deal making would be huge.

leoc 9y ago

> It is in fact not the case that there is a single exchange on which IBM trades (it is listed on the NYSE, CsE, and at various places abroad). Liquidity factually does exist in different amounts at different places; this is a major reason why HFT works. Ground loops... /showerthought