Efficiency tends to win and monopolies will forever be attacked. There's a great deal of fat in TradFi futures (hello FCMers) and it needs to be trimmed.
Will the FTX model fly as is? Unlikely. Will if force change? Pretty certain it will. What will we get? Faster settlement. Cheaper (fee?) data. More responsive regulatory bodies (responsive is key...not more regulatory bodies, please!). A more consumer friendly version of securities lending. More rapid development of needed trading products (dangerous, agreed0...an a whole lot more.
I admit, I'm biased as I moved over recently to 100% crypto after 30 years in TradFi (futures, mostly) but the issues I've listed are a short list of reasons for why I made the move. TradFi isn't evolving fast enough and that has softened its roar. There, I said it. TradFi is soft.
I think it's time to consult with Jon Corzine for the answers to all of the above. He's your answer man with no downside. I wonder what kind of mayhem that guy would have spun with crypto futures in the portfolio?
Duffy's comments around credit hint at a thing which is very important. You cannot "hide" in the listed US markets. You identify yourself in multiple ways (including fingerprinting). There are definitely legal fictions you can use to obscure your identity, but it isn't easy. How good are the KYC systems on these proposed exchanges? If you can't identify traders uniquely, how do you enforce position limits? How do you prevent all sorts of spoofing and manipulation?
The cryptos effectively tie your crypto assets up in a smart contract, so it ameliorates some of the credit risk, but is it enough? The other concern is how complete are these smart contracts? Would they stand up in someone's court system? What venue would a dispute be resolved in?
Pat's comments are correct in the sense that maybe pushing in this direction will make people improve what exists.
Efficiency tends to win and monopolies will forever be attacked. There's a great deal of fat in TradFi futures (hello FCMers) and it needs to be trimmed.
Will the FTX model fly as is? Unlikely. Will if force change? Pretty certain it will. What will we get? Faster settlement. Cheaper (fee?) data. More responsive regulatory bodies (responsive is key...not more regulatory bodies, please!). A more consumer friendly version of securities lending. More rapid development of needed trading products (dangerous, agreed0...an a whole lot more.
I admit, I'm biased as I moved over recently to 100% crypto after 30 years in TradFi (futures, mostly) but the issues I've listed are a short list of reasons for why I made the move. TradFi isn't evolving fast enough and that has softened its roar. There, I said it. TradFi is soft.
I think it's time to consult with Jon Corzine for the answers to all of the above. He's your answer man with no downside. I wonder what kind of mayhem that guy would have spun with crypto futures in the portfolio?
Duffy's comments around credit hint at a thing which is very important. You cannot "hide" in the listed US markets. You identify yourself in multiple ways (including fingerprinting). There are definitely legal fictions you can use to obscure your identity, but it isn't easy. How good are the KYC systems on these proposed exchanges? If you can't identify traders uniquely, how do you enforce position limits? How do you prevent all sorts of spoofing and manipulation?
The cryptos effectively tie your crypto assets up in a smart contract, so it ameliorates some of the credit risk, but is it enough? The other concern is how complete are these smart contracts? Would they stand up in someone's court system? What venue would a dispute be resolved in?
Pat's comments are correct in the sense that maybe pushing in this direction will make people improve what exists.