Noelle Acheson is a veteran of company analysis and CoinDesk’s director of research. The opinions expressed in this article are the author’s own and are not investment advice.
The following article originally appeared in Institutional Crypto by CoinDesk, a weekly newsletter focused on institutional investment in crypto assets. Sign up for free here.
Shuttered shops. Empty streets. Scant traffic. The world’s financial centers are increasingly looking like ghost cities. The world’s financial markets, on the other hand, are a frenzy of activity as dealers and traders try to ride the wild swings each headline and sentiment shift brings.
Yet, even though almost all trading is electronic these days, conducted behind sanitary screens, there is talk of shutting down markets for health reasons. The health in question is not just that of the traders and support staff involved.
Wild seesawing as we have been seeing this month in both traditional and crypto markets destroy wealth more often than they create it. At times the destruction can be truly threatening – at time of writing, the S&P 500 has lost over $3 trillion in value so far this month. And, as we saw in 2008, market losses can trigger a widespread economic meltdown that impacts upon the lives of people who had no idea they were inadvertent market participants.
It takes on a new meaning, however, when the threat is more than economic. As most of us retreat to safety (with a huge shout-out of appreciation for those who can’t), markets need to keep running.
Yet, sending market makers to work from home is not as simple as it sounds. Regulations require certain levels of supervision, time stamping, data privacy procedures and voice recording that cannot be replicated in a home office. And market surveillance and audits are not quite as reliable…