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This is such a terrible comment. Think about the landscape of exchanges globally. TSE, SiMex,Globex, ICE, NYSE, LIFFE LME, Eurex, etc etc etc. If FTX is an ex
by MrMan 4y ago
This is such a terrible comment.
Think about the landscape of exchanges globally. TSE, SiMex,Globex, ICE, NYSE, LIFFE LME, Eurex, etc etc etc.
If FTX is an exchange, then they make more money when volume is up and less money when it is down. Just like all exchanges.
If the holding company Alameda that owns FTX is a market maker, they make more money when volume is up, spreads are wide. They may or may not do well during herding events like crashes, but market makers don't like directional vol.
If any of these players are arbitrageurs, where do their arbs come from? Why do they persist? I think most of the edge comes from retail flow.
This is a trading business. What makes you think that any exchange has an edge that is unique in a downturn that makes it like Amazon or Microsoft? Neither of those companies run a trading exchange.
Why the romantic anthropomorpgic narrative surrounding trading exchanges? Historically it's a good but not amazing business. There is secular growth, but it tends to be highly constrained and it's a very competitive environment.
Does FTX have better infrastructure or risk management than ICE or CME? Or just better press at the moment.
- daniel-cussen 4y agoSolid analysis.
- avrionov 4y agoYou seems to know a lot about the exchanges. D you think coinmarketcap numbers are real [1]? The parent comment was about FTX and Binance compared to the other crypto exchanges not to the exchanges in general. FTX claims to be way more efficient than Coinbase - having only 25 engineers compared to thousands for coinbase. This could be secret of the surviving exchanges - efficiency. [1] https://coinmarketcap.com/rankings/exchanges/ https://coinmarketcap.com/rankings/exchanges/
- ordinaryradical 4y agoCoin market cap volume numbers are known to be easy to manipulate, but exchanges like FTX and Coinbase do not likely engage in these kinds of manipulations as they don’t seek to legitimize themselves through nonexistent volume anymore. But the lesser known exchanges that appear on there are likely pumping their numbers. I have heard Coingecko’s ranking eliminates some of the volume pumping tricks but have little to back up that claim: https://www.coingecko.com/en/exchanges https://www.coingecko.com/en/exchanges