Thank you for writing about this. I started noticing these trading patterns more frequently at the start of the year. My assumption was these ‘market making’ and/or exchange arbitrage strategies would eventually move the prices closer the same value across the various exchanges. The spreads (between bid/ask and between exchanges) has tightened noticeably over the past 6 months which is a good thing.
I don’t see as much front-running with minimum quantity orders which is nice. Although I did enjoy driving those bots further into the spread as far as I could before trading against them and cancelling the order being front-run. Enjoy it while you can because I’ll take ‘spoofy’ over the regulators any day.
Besides, the trade on GDAX that brought ETH down to a dime was one of the best trades these markets will ever see. If anyone thinks that ‘flash crash’ was unintentional, well, then perhaps they ought to invest rather than trade. Again, thanks for the article!