Bitcoin Forum

Great topic I would love to hear someone elaborate into detail about this high frequency trading and also the aspect of insider trading!

Also what is everyone's opinion on the BTC Podcast by Joe Rogan and Andreas Antonopoulos!

Podcast interview Andres Antonopoulos (Let's Talk Bitcoin on YouTube) & Joe Rogan! (http://podcasts.joerogan.net/podcasts/andreas-antonopoulos-2)

Thanks in advance!

High frequency trading (HFT) is simply trading done on a VERY short time scale (sometimes milliseconds)
by computers.  One of the main tactics behind HFT is having powerful datacenters
in close proximity to stock exchanges, central banks, etc.

Despite the fact that HFT makes up a lot of the trading volume
in stocks and forex, there's nothing magical about HFT.

HFT strategies and algorithms are numerous. Many HFT firms
lose money, and price action is not noticeably affected or any
different than it was years ago before HFT.

HFT operates on the smallest timeframes, and
thus generally requires direct market access with
the narrowest of spreads.  

There may be algorithmic trading going on with Bitcoin,
but there is not enough depth/liquidity for it to be
really in the same class as what is considered HFT today.

The exchanges themselves are probably using their own
trading algos inside their own platforms
(and that could be called "insider" trading I suppose)
although that is to be expected.
 

I knew what HFT was in the real market, but we know that the BTC market is not the same, even though I have heard there are "Centralized" exchanges showing up on the map in the real world. Sucks seeing something decentralized become manipulated by centralized influences.

But thanks for the reply!

All the bitcoin-fiat exchanges are centralized because fiat currency is itself a centralized system requiring trusted third parties.

I would say "Insider Trading" in terms of the Bitcoin trading marketplace as it exists today exists with shady exchanges (whom are not subject to ANY "trading regulation", rule books, oversight, etc.) allowing market-makers to front-run orders, or worse yet, acting as market-makers themselves.

That being said, like currency trading, the only "insiders" are those in central government institution levels that are privy to interest-rate / policy decisions.

HFT is another animal, and a harder one to solve in the disparate market of Bitcoin "exchanges" (I wouldn't call them all real exchanges...) It's still very much impossible to do the kinds of HFT that is common in most existing traditional financial markets, due simply to a lack of infrastructure / capitol / specialized products (futures, options, lending, interest rates).

It (HFT, ULLT, DMA) will happened, but only once Bitcoin or some derivative there-of migrates into more established infrastructure.

Well said brother! But due to the extensive forensics needed to track this money it's not ease to find funds as we have seen with Mt.Gox EMPTYGOX

Is this the second podcast or the one from a long time ago?

It is the second one, sorry I answered my own question.

Don't panic.

1. Huge user error in misusing an exchange as an online wallet.  I think we all learned a valuable lesson.
2. Vault of satoshi just announced a proof of solvency feature that hopefully becomes industry standard.