HyperPrices, Volmageddon, & Ant Death Spirals
The Rise of SkyNet: The Algorithmization Of Finance Part VI
Forty years of Goldilocks conditioned an entire generation to see asset markets as “Perpetual Money Machines” through what amounted to Pavlovian technique.
When any trouble surfaces, buy the dip, safe in the knowledge that the Fed will intervene and markets will quickly recover to new highs. Each successful rescue reinforced the gospel that faith in the Plunge Protection Team would inevitably be rewarded:
In such a simulated Financial Matrix, it makes perfect sense to delegate investment decisions to "dumb" passive ETF algorithms and "smart" AI algos—both trained on decades of BTFD data. Eventually, the logical result is crypto price charts drawn in the shape of a Shiba Inu dog and the chaotic flash crashes and price spikes we've explored in prior essays—the most conspicuous ripples atop the surface of a more pervasive phenomenon. Underneath, Skynet’s trading algorithms are not only generating the occasional dog price charts and the artificial chaos of flash crashes, but rather continuously weaving an artificial order throughout the markets—a constant, subtle restructuring of financial reality itself.
Most of the time, this manifests as an eerie stability, yet this very stability breeds instability. When one thread in the algorithmic tapestry snaps—perhaps from nothing more than the mounting tensions that emerge from countless algorithms weaving among themselves—the whole fabric unravels, briefly slipping its mathematical mask and exposing its artificial nature through flash crashes and “impossible” prices.
Read the full Skynet Part VI on our site (linked here):
Silicon Sorcery: Code’s Captive Markets
New to the Sorcerer’s Apprentice series? For essential context, start with our foundational posts on the Financial Matrix, HyperPrices, and Hyperreality, or explore the full Table Of Contents.