"The scoop is, they can not be guaranteed liquidity in the slam-bang Bitcoin economy. "You have to understand that the game they play uses a Martingale strategy. But that strategy fails if liquidity can not be guaranteed. In a case where liquidity can be guaranteed through issuing fiat (buying on a virtually unlimited line of credit), the fix is in. But that liquidity has to be on both sides of the book, which means you also have to be able to fractionalize the underlying security at will. And you can not do that if the underlying security is constantly being thrown into a liquidity crisis. What this means is that they can have no advantage simply through a guarantee of having the deepest pockets, and must then manage risk like the rest of the market does. Bitcoin distributes risk in the manner, which is an unacceptable prospect to the banks." https://bitcointalk.org/index.php?topic=178336.msg2741323#msg2741323
Posted on: Tue, 16 Jul 2013 15:22:26 +0000
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