Post
Topic
Board Speculation
Re: The Volatility Reduction Group (Market Makers)
by
odolvlobo
on 27/04/2013, 20:01:16 UTC
I believe a small group of people with millions of dollars in resources is manipulating the Bitcoin market, artificially injecting extreme volatility and reaping huge profits.

Do you have any data under your tin foil hat to support this claim?

I don't think market makers are a solution to the problem you see. Market making might reduce some liquidity spikes, but it wont stop the big price swings. First of all, the function of a market maker is to provide liquidity and reduce the bid/ask spread. Second, a market maker has to be nimble. A market maker that tries to block price swings by putting up big walls is just going to lose a lot of money.

Anyway, I don't disagree with your goal. Increased volume reduces the effect of large trades, but what we really need are more big exchanges and an improved arbitrage channel between them.