I should not have said speculation, the article makes it clear that 70% plus of unregulated exchange trades are wash trades.
Speculation (short selling etc) is a necessary part of a healthy financial system. Wash trades on the other hand are simply market manipulation.
GDP / production is what it's all about. The dollar is powerful in part because of US GDP. The financial sector exists to help put capital to work and extract more P (and to do so more efficiently). The financial sector cannot exist on it's own without meaningful production of value underneath it.
The crypto exchanges are different from forex in that forex facilitates people from other countries doing business with each other helping convert the value of one country's productive output into the value of the other countries productive output. Exchange rates rise and fall relative to GDP from the two countries.
I don't think comparing crypto exchange trading to forex makes sense, as that the crypto currencies don't have a meaningful connection to any nations GDP.
I think the point I'm trying to address here is that there is no P with cryptocurrencies. So the "crypto financial sector" seems more about price manipulation and gambling than it is helping facilitate trade between two economies.
Each of my links has examples of people exchanging goods and services in bitcoin for various reasons. Do you consider that productive economic activity (the "P")?
If you don't: why is it productive when I buy a car using dollars, but not productive when I buy a car using bitcoin?
If you do: why must a currency's worth be tied to one particular country's GDP? Why can't it instead be tied to the global production of everyone on earth, in any country, who has chosen to use that currency? I think it's actually a sign of strength when someone goes out of their way to adopt a global non-politcal currency, instead of succumbing to inertia and using the currency that was foisted on them by the geographical circumstances of their birth.
Speculation (short selling etc) is a necessary part of a healthy financial system. Wash trades on the other hand are simply market manipulation.
GDP / production is what it's all about. The dollar is powerful in part because of US GDP. The financial sector exists to help put capital to work and extract more P (and to do so more efficiently). The financial sector cannot exist on it's own without meaningful production of value underneath it.
The crypto exchanges are different from forex in that forex facilitates people from other countries doing business with each other helping convert the value of one country's productive output into the value of the other countries productive output. Exchange rates rise and fall relative to GDP from the two countries.
I don't think comparing crypto exchange trading to forex makes sense, as that the crypto currencies don't have a meaningful connection to any nations GDP.
I think the point I'm trying to address here is that there is no P with cryptocurrencies. So the "crypto financial sector" seems more about price manipulation and gambling than it is helping facilitate trade between two economies.