In Italy , for 30 years under the Borgias, they had warfare, terror murder and bloodshed, but they produced Michelangelo, Leonardo Da Vinci and Renaissance. In Switzerland they had brotherly love, they had 500 years of democracy and peace- and what did they produce? The cukoo clock. – Graham Greene
If you are a management graduate, the first lesson of Economics points out to a free market where the price is discovered by a market, depending on the supply and demand constraints. Well the underlying idea of blockchain was to do away with a third party intervention and create a free market along with non-editable ledgers and contracts resulting in free market price discovery. If you are a crypto maniac and you love the markets, what happened on Monday 8 January 2018 must have left you in a shock. The usual 150%, 200% returns on coins were unseen and what was more shocking was the red all over the market. Yes, there was a correction and the blame was taken up by CMC or Coin Market Cap. CMC is of the known website people refer to check the price of various coins.
The team took a drastic initiative, which was a need of the hour. They removed some Korean exchanges from their coin price calculations as all coins here were about 30% pricier than the other exchanges. Not many people knew this!
Well if it was an established global market, most of traders who are currency/stock market maniacs would use this opportunity to get arbitrage and help in price discovery on their own, and in turn, they get richer via every trade!!
Now since this step has been taken, for those who sold in a hurry thinking the market was tanking, I am sorry to say DOR. In case you were strong, held back your tears and let the market tumble for the blood bath, I am happy for you. You have learnt one of your lessons on DOR and staying strong.
We can see an even price across most of exchanges. Though the arbitrage has not been erased, with time, it will soon be erased and we might just end up with the right market price for every coin.