Not when the buyer and seller are one and the same person.
There's extensive evidence to suggest wash trading, as it's known, is endemic in the crypto space.
There's extensive evidence to suggest wash trading, as it's known, is endemic in the crypto space.
https://www.fs.blog/2013/11/mr-market/
Basically, every market is basically an insane, irrational, manic-depressive, uncaring business partner who gives you the option to buy his share or sell yours every day, as long as market hours are open (in the age of cryptocurrency, this is 24/7). You are under no obligation to take the transaction, though. If you believe the price is too high, sell. If you believe the price is too low, buy. If you don't believe anything, hold.
Crypto and the stock market are no different in this regard. The short-term price is equally irrational in both. (There's pretty good evidence that wash trading is endemic in the stock market as well - wasn't Goldman Sachs caught taking both sides of a transaction in the 2009 financial crisis? And many derivative strategies explicitly rely upon being both long and short at the same time.)
The difference is that stock market investors have mostly figured out how to value stocks on fundamentals: the intrinsic value of a stock is all the discounted value of all future cash flows accruing to the equity investors. The intrinsic value of crypto is zero, unless, of course, it manages to replace the dollar as the world's reserve currency, in which case its intrinsic value is infinite, or more accurately the dollar's value is zero. Your estimate of the fundamental value of a cryptocurrency should be based on your assessment of the likelihood that it will replace the dollar as currency.
The same for The Euro - they won't be the same crypto just as they aren't the same fiat now.
Whatever, the chances of Ripple, Ether or Bitcoin being the new dollar or euro are 0, regulators and governments would be literally insane to attempt this, and would be nearly immediately replaced, imprisoned and executed if they did try. So you are correct the valuation for these based on them being the new dollar or new euro or both is the same.
Um, no? What are you talking about?
[1] https://www.huffingtonpost.com/david-fiderer/the-cdos-that-d...
There's nothing wrong with being in the middle of a line of trades. The crime is when that line becomes a loop and nothing is actually changing hands at either end.
Sure, it's not "taking both sides of the transaction" but it's still screwing investors as a regulated(!!!) banking entity.
https://www.theguardian.com/business/2012/oct/22/goldman-sac...
The only substantiated thing in that article is the Abacus case which is quite different: the counterparty there was IKB, who are a sophisticated investment bank, a million miles away from "one of these philanthropies or endowments or teachers' retirement pension funds in Alabama or Virginia or Oregon". They didn't get screwed, they bet on the US housing market and lost.
I read some sarcastic financial blogs and let's just say the "muppet" theme there is recurring when it comes to the "squid" :)
Which, for the most part, is impossible. The various blockchain currencies aren't scalable enough to do that.
IMO, most people investing in cryptocurrency don't understand distributed systems programming and money. The rest of the people are just running pump and dump schemes.
Or, what I like to tell people, "if you're investing in cryptocurrency you're either running a pump and dump scheme or you're the sucker."
It seems to me that the market efficiency of unregulated markets depends on many things and your claim is too strong.