Efficient Market Hypothesis

wow it's almost like you found and extremely inefficient, low volume, highly speculative market that isn't actually worth shit!

>>1940036
well yes, but a relatively unregulated one for that matter; EMH basically advocates that.

>>1940068
...what?
EMH only works in a transparent market where information is readily available
that is only made possible through regulation

don't you think it's ironic that you're having trouble finding information on this particular market?

I'll tell you right now that presenting your thesis as evaluating the "viability" of the EMH is going to open it up for gutting. It's already well argued that the EMH is not invalidated by individual examples of inefficiencies, in fact, it is individual speculators capitalizing on perceived inefficiencies that drive the market towards efficiency. It's not unlike the law of entropy, in that over time entropy tends to increase with complete certainty, but it's not impossible find moments of decreasing entropy.
If anything, you'd be better served by presenting cryptos as an example of a market that's in an unstable transition state and explore how we might be able to study those markets to determine the qualities, like those in
>>1940036
that let us identify such a state. In that context, your original question about the difficulty of finding and/or identifying proper data might itself turn out to be a notable quality.

>>1940090
>EMH only works in a transparent market where information is readily available
>that is only made possible through regulation
I'd argue that the specific level of transparency or information is less relevant than the requirement that all participants possess the same access to information.

The market is efficient even if it is not transparent, or well understood, because it is likely not transparent and well understood for the majority involved, hence higher volatility.

EMH basically implies the value being correctly reflected by the stock price because it is this price people are willing to engage in trade. Any change in information will be reflected by the change of stock price.

>>1940097
Hm, interesting point man. Lemme clarify what I mean a little bit more then.

Basically, I was gonna approach it from the starting point that both cryptos and currency baskets are essentially currency. Then, I was going to look at what central bank objectives are with regards to currency. Whilst the Fed and ECB have different mandates, the one they have in common is that of price stability (the ECB has a boner for an annual 2% increase in HICP, but mas o menos both central banks agree on that.)

Given that primary objective, I wanted to analyze the efficacy of purpose-built regulatory institutions vs. the free market in maintaining the objective of price stability.

What did you mean by your proposal though? I would've imagined it to be difficult to draw equivalencies because you really don't have similar markets to things like cryptocurriencies. I could be very wrong though obviously, in which case if you'd clarify what you mean it'd be much appreciated.

>>1940090
Oh, I see the irony in it a lot. Of course, I'm approaching this with a predisposition though, hence my choice of topic. When I say EMH, I mean it in it's semi-strong form, as that's the most widely peddled "realistic" equivalent of it, where all publicly available information is taken into account. Of course, you'd have to be able to use it, but everyone who trades in bitcoin knows how to do that. People who don't participate in a market aren't really part of it.

>>1940107
I don't really understand the point you're making. As far as I understand it, if markets are not transparent there's always opportunities for arbitrage, which are inefficiencies.

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>>1940100
>the specific level of transparency or information is less relevant than the requirement that all participants possess the same access to information.
you naive rube, access to information means noting when 99% of people are total morons [which is the case] and won't even bother analysing what's right in front of them
someone's going to have more information and they're going to use it to their benefit

>>1940130
>I don't really understand the point you're making. As far as I understand it, if markets are not transparent there's always opportunities for arbitrage, which are inefficiencies.

Well I had the market of cryptocurrencies in mind, where the only real "value" of the products is their speculative nature, and not the kind of ulility (please don't start arguing about this point - it is a given fact that cryptos have been of little use except buying drugs). Therefore, even if some insiders percieve some coins to be of higher value - maybe because they know the underlying security algorithms that the general public does not know, or they know some major company will allow payments - EMH still holds because the speculative nature is not affected by the underlying utility of owning coins, and this is what drives the price.

>>1940141
>someone's going to have more information and they're going to use it to their benefit
Of course, I don't disagree with that, but that explicitly puts it out of bounds of the subject of EMH. My point was specifically for EMH to hold, the amount of information must be about the same for all participants, even if that isn't much information, much like
>>1940107
was saying.

>>1940130
>What did you mean by your proposal though? I would've imagined it to be difficult to draw equivalencies because you really don't have similar markets to things like cryptocurriencies
I don't entirely agree that they aren't similar to existing markets, but the fact that that is obviously debatable is kind of my point - that's what makes a thesis worth exploring and arguing.

Of course it may not matter, schools are often just lazy, especially with an undergrad thesis.

>>1940162
>it is a given fact that cryptos have been of little use except buying drugs
any sauce on that? Not for starting arguments,but it'd be conducive for research.

>>1940163
Interesting. What markets would you compare it to? Cryptos I mean.

>schools are often just lazy, especially with an undergrad thesis
oh for sure. People were discouraging me from pursuing this one because it was 'overly ambitious'

>>1940199
Have you seen any places that accept bitcoins, besides silkroad? Everything legal is done by credit cards offline and paypal online. No sources though.

Emh is bullshit. Thats why it will forever be called a hypothesis and not a theory. If they called it a theory it would be disproved by tons of people. Calling it a hypothesis saves it from scrutiny. Ask mike burry if the market represents reality accurately at all times. Its faggot fairy shit.

>>1940411
that's the thing

I looked at a study of bitcoin uses; only 4-9% of it's transactions are related to OIM's

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>>1940020
>I'm currently working on my Bachelor Thesis trying to analyze the viability of the effiient market hypothesis, comparing a cryptocurrency to a hard basket.

jesus christ. do something easier and less demanding as bachelors thesis. scrape some shit together in few days that's it

>>1940625
typical b-school attitude, everybody

>>1940532
this is like what an edward jones broker would say who only ever had a high school education

>>1940020
EMH isn't applicable to cryptos because it's an unregulated market powered by lies and rumors.

>>1940411
You can buy Steam games with Bitcoin.

>>1940625
why though?

>>1940634
Isn't it the closest thing you'll ever get to one though

>implication of EMH is that government intervention in markets is unwise
>unregulated market
>no central authority responsible for it's upkeep

>>1940771
EMH only applies if all participants have access to the same information at the same time.
Crypto is run by P&D groups and premining devs, who have huge information advantages over the plebs.
Insider trading literally can't be prevented without regulation.

>>1940020
>working on a BA thesis
>does not know shit about the subject, does not know what Google is
Hope you fail.

>>1940782
well, in it's semi-strong form it only talks about publicly available information afaik

So in other words, if I understand you correctly, you're stating that the EMH is in-and-of-itself oxymoronic as the only way it would "hold" is through regulation? Cause that was the conclusion I was kinda hoping to reach, heh.

>>1940804
>choosing something you know a lot about to do research on at such an early stage
>prefers easy grades over learning lessons
>thinks I'm doing a BA if my thesis is quantitative
lmao dude come on
also:
>started yesterday
of course I don't

>>1940814
>well, in it's semi-strong form it only talks about publicly available information afaik
Yeah, but if most information isn't public then the market can't possibly be efficient. This is the case for the majority of cryptocoins, especially FOTM P&D memecoins.

Add to that the fact that most crypto traders are memechasers who don't do much research and you can see that even public information isn't always relevant to the current price.

>>1940837
Isn't it all pure speculation anywho though? I'm legitimately curious. The way I understood it, the "value" of bitcoin came from it's absolute scarcity and subsequent demand for it, and the "genius" behind it being that everyone knows the fundamentals of how bitcoins are mined, what sort of rewards there are for mining, etc. In other words:

1. All agents partaking in bitcoin exchanges know that the number of possible bitcoins is limited.
2. All agents partaking in mining understand the rewards they get for mining bitcoin, and how it's better to mine today than tomorrow as a consequence.


I distinguish Bitcoin from other memecoins because of that; dogecoins, pepecoins, etc. are memechasing gold, but bitcoin is seriously mined and hyped on a mainstream-er level.

>>1940860
Bitcoin is a special case. The volume is extremely high, the market cap is higher than most public companies, and as far as I know the devs don't do anything shady.
Crypto as a whole is run by scammers, though.

>>1940863
Yeah, that I understand. Kinda why I'm curious to analyze it as well, seeing as it's the one exception. I've gotten contradicting studies with respect to it's status (as a currency), making it even more interesting.