Wow, looking at the order book of bitstamp [1] through the eyes of someone who lives in the world of market microstructure is eye opening:)<p>There are huge holes everywhere in the order book and the liquidity at each offering level seems to be completely without reason.<p>I just spent 20 minutes applying the sort of algorithms that'd we'd normally run on each stock to make markets in it and it can't detect any real patterns or justification for the bid/ask levels.<p>Is this just a case of everyone in the bitcoin market being "unsophisticated" in the quantitative sense? or is there some new form of market micro structure being created here?<p>Thoughts??<p><i></i>EDIT<i></i>
For people asking about what you'd expect to see:<p>1) After the initial price level, you'd generally expect the next 10 or so price levels to be pretty tight. In the bitcoin case some of the spreads between price levels are larger than the bid/ask spread.<p>The price levels don't appear to have any logical basis behind why they are placed where they are.<p>2) volume at each price level. Similarly to above the volume at each price level doesn't appear to have any discernible pattern. Typically volumes would increase at each price level, up to a point, as more people join the market at each price level.<p>They don't break out a level 3 quote( order book by order, as opposed to price) so you can't really see how many orders are backing up each price level but given how small the volume of many of the price level are you can probably assume its only one person/order at most levels.<p>[1] <a href="https://www.bitstamp.net/market/order_book/" rel="nofollow">https://www.bitstamp.net/market/order_book/</a>
The Drapers are quite bullish on Bitcoin. Adam Draper's accelerator, Boost VC, is investing in 100 Bitcoin companies over the next 3 years: <a href="http://www.coindesk.com/boost-vc-accelerate-100-bitcoin-companies-next-three-years/" rel="nofollow">http://www.coindesk.com/boost-vc-accelerate-100-bitcoin-comp...</a>
From the article:<p><i>“Bitcoin frees people from trying to operate in a modern market economy with weak currencies. With the help of Vaurum and this newly purchased bitcoin, we expect to be able to create new services that can provide liquidity and confidence to markets that have been hamstrung by weak currencies”</i><p>The issue that I take with this statement is that so far, bitcoin is far from a strong stable currency. I reserve judgment on whether it will ever get there, but I am not convinced that doing business in bitcoin is currently safer than doing it in Indonesian rupiah (for example).
Mr Draper states that Bitcoin is badly needed in resource-poor countries with unstable currencies. How does he expect Bitcoin to compete with mobile currencies such as M-Pesa?<p>Thinking about it, I imagine that the advantage of Bitcoin is that it can be sent globally, whereas M-Pesa type currencies are restricted to specific countries.
So there was a press conference about this. It was streamed somewhere.<p>If anyone has a torrent of the video I'd love it's url! Thank you very much
Building on the momentum of mainstream adoption and giving access to emerging markets, GogoCoin (500 Startups) is working to get Bitcoin and digital cash into everyone's hands.<p>I applaud Tim Draper and all the other notable bidders who help push Bitcoin one step closer to Wall Street and the mass market.