Today's price moves in crypto are a strong argument for industry wide circuit breakers. The crypto markets structurally broke today & leading exchanges need to work together to prevent a repeat.
@CiaraHuobi
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Lol no thx; volatility is wonderful for volume, and you can’t possibly stop every exchange from trading.
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You couldn’t stop the DEXs even if they wanted to
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DEXs are too small to matter today and for the foreseeable future
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Top exchanges actually performed well under the load today. Circuit breakers are an impossiblity without global legal immunity but the real issue is that traders would prefer markets without them.
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Kraken did well today. But if there were to be an industry wide movement for circuit breakers it would need Kraken to also agree. It would need to be an industry wide agreement or it wouldn't work
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Agree that one exception is enough to kill the whole thing, which is why it’ll never happen.
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I would think of it like insurance funds for derivatives exchanges. They are needed to protect traders and now it is a competitive advantage to offer insurance.
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I don’t see how it protects traders. It reduces options when people need them the most. We can’t presume to know what people have going on at other venues, with their broader prortfolio. Traders on exchanges with circuit breakers will be disadvantaged vs those on free markets.
That makes sense. Perhaps there is another solution which can be brainstormed.
I hope you can see the benefits of slowing down a panic driven move. It would be massively market expansionary for crypto if we could avoid these types of days, they scare too many people away.
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The solution is personal discipline. Attempts to control derisking will have other consequences, like reduced liquidity.
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