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It only succeeds at manipulation, for the most part, because of assumptions created by the prohibition that the apparent liquidity is genuine liquidity. I trade

It only succeeds at manipulation, for the most part, because of assumptions created by the prohibition that the apparent liquidity is genuine liquidity. I trade crypto on unregulated exchanges where spoofing is such a familiar phenomenon that traders and their algorithms assign little or no meaning to it, and it has no observable effect. The prohibition is what makes it work.

abduhl 6y ago
But the point of the commodities market is, at its core, for hedging, not speculation. The point of the crypto market is, at its core, speculation. Many will disagree with this assertion, but it's true. You grow wheat. You want to make sure that you can get $X for your wheat in 6 months and you are willing to risk the upside of a wheat shortage for protection against the downside of a wheat glut. Your counterparty makes bread. They're willing to lock in a price of $X now for wheat delivered in 6 months at the inverse cost of your reasoning. You've both hedged. The world is better because I can buy bread made from wheat in 6 months at a reasonable price. Traders and Wall Street came along and perverted this, but it is still a primary purpose of the market at its bedrock. If the bakers and the farmers disappear, there is no wheat market for the traders to pervert. It is the foundational hedger that the prohibition protects. Compare: you trade crypto. You want to sell your crypto for dollars. Later, you want to buy your crypto for dollars. When the hell does anyone else care about your crypto? Why would we care about the integrity of price discovery in the crypto market when it has (or should have) no impact on the real world outside of your economic gains/losses? If we don't care about price discovery and its integrity, we have no need for the prohibition.
- raziel2701 6y ago
  I think the commodities market is by far used for speculation. Same with options, supposed to be an insurance policy for portfolios, it's now a vehicle for speculation. Thinking that at its core it's for hedging is a very naive position. All you have to do is look at the volume of transactions and you'll realize that most activity is purely speculative.

abduhl 6y ago

But the point of the commodities market is, at its core, for hedging, not speculation. The point of the crypto market is, at its core, speculation. Many will disagree with this assertion, but it's true. You grow wheat. You want to make sure that you can get $X for your wheat in 6 months and you are willing to risk the upside of a wheat shortage for protection against the downside of a wheat glut. Your counterparty makes bread. They're willing to lock in a price of $X now for wheat delivered in 6 months at the inverse cost of your reasoning. You've both hedged. The world is better because I can buy bread made from wheat in 6 months at a reasonable price. Traders and Wall Street came along and perverted this, but it is still a primary purpose of the market at its bedrock. If the bakers and the farmers disappear, there is no wheat market for the traders to pervert. It is the foundational hedger that the prohibition protects. Compare: you trade crypto. You want to sell your crypto for dollars. Later, you want to buy your crypto for dollars. When the hell does anyone else care about your crypto? Why would we care about the integrity of price discovery in the crypto market when it has (or should have) no impact on the real world outside of your economic gains/losses? If we don't care about price discovery and its integrity, we have no need for the prohibition.

raziel2701 6y ago
I think the commodities market is by far used for speculation. Same with options, supposed to be an insurance policy for portfolios, it's now a vehicle for speculation. Thinking that at its core it's for hedging is a very naive position. All you have to do is look at the volume of transactions and you'll realize that most activity is purely speculative.