you sarcastically said:
"So... increased liquidity leads to decreased volatility, right?"
do you believe that statement to be true or not?
if so, then if you think that we are currently volatile, then that means we must not have increased liquidity
someone is wrong. either you or your quote. you can't have it both ways.
I don't particularly believe one way or the other at the moment. Looking at the charts for the last few hours, the swings seem to be much wider than before, but it's pretty early to say.
What I'm getting at here is:
-The general consensus answer I've seen here is that speculation is good since it provides liquidity.
-Similarly, the general consensus answer seems to be that liquidity decreases volatility. (makes sense on the face of it)
-Ergo, increased speculation should lead to decreased volatility. And lo, we have a live experiment!
That's all, really. If my point was fuddled before, I apologize. It is late.