Dear Joseph,

Thank you for the undeserved praise. I personally believe that the cryptocurrency space is not helped by obfuscation or embellishment. If the industry is to mature, then we must deal with our own demons with honesty.

To that end and as you rightly point out, the reasons why HFT is not likely to takeoff in cryptocurrencies for now is the lack of the institutional infrastructure that is already present in the equities markets.

Because of the strong potential for manipulation (even in equity markets) there has to be a counterparty of last resort in environments which support HFT — for now at least, none exist in cryptocurrency exchanges.

And the lack of regulation as you rightly point out, does not help matters either.

Some would argue that decentralized exchanges fair better, but even there, because decentralized exchanges trade directly off the blockchain, as opposed to centralized exchanges, which (hopefully) update the blockchain at designated points in a 24-hour trading cycle, the ability to up the GAS or transaction fees on the decentralized exchange’s blockchain means that manipulation, front running and all the other bad trading behavior is even easier to execute.

Against this backdrop, HFT is someways away.

Thank you once again for elevating the level of discussion and contributing to the topic.

Yours,

Patrick