BitMEX CEO expects conditions in the trading world to change as cryptocurrencies enter the mainstream. Arthur Hayes sees crypto not just disrupting the traditional financing structures, but also the jobs within the sector.
There are roles based on past norms, such as the traditional 9-to-5 job, that will have to adapt to altered realities in the world. In his words, this means change for “everything from traditional equities, bonds and currency trading, to the way payments are processed and recorded.”
His comments went on to say how lunch breaks and weekends won’t be as justifiable when these traders could be earning profits in the markets 24 hours a day, 7 days a week.
Of course, this could cause some issues with labor organizations, but the crypto market has never been about following regulations as much as it has been about a libertarian ideal.
More Ways The Industry Will Change
Of course, there will be many other ways that the crypto markets are forced to adjust. For example, current records keeping is done on paper as well as digitally, and is mostly antiquated. If the traditional assets start to mimic some of the processes from crypto, you get a much more streamlined system.
As Hayes said at the Milken Institute Asia Summit in Singapore:
“All these things about being somewhere and trading something and physically reconciling records is all going to go out the window. Once you get away from that and understand that everything will be digital in the next 10 years, you realize that Bitcoin isn’t such a strange idea.”
Long-Term Trends Are Manifesting
A confluence of two major trends is occurring here. First, you have the above-mentioned idea that since cryptocurrency markets are open 24/7, markets for other assets will begin to adapt to this. Secondly, traditional trading jobs have been getting gutted in the past few years in favor of artificial intelligence and automation.
When you combine these, you can see how the trend towards trading bots and a more decentralized method of running trading desks may occur. There is a reason why crypto-traders are so plentiful: the combination of volatility and lower regulations make it easier for them to turn a profit in the beginning.
HFT Enters the Crypto World
The trading world is also witnessing the beginning of a battle between speed and liquidity. This is actually an echo of what has been going on in the traditional equity world for several decades in regards to high-frequency traders (HFts).
Exchanges began to offer higher-speed ways of trading for the institutional trading desks, and this directly affected the outcomes for retail investors. If you had a trader who was noticeably closer to the exchange servers (or in the same facility, which is referred to as colocation), then they will always have a winning edge over other players.
Taking this further, it reduces liquidity away since market-makers lose their incentive to stay active on the exchange. Coinbase initially invested $50 million into developing a faster trading platform, but nixed the project when they realized it wouldn’t necessarily help the customers and overall platform.