Curriculum·S201 Market Structure and Price Formation·about 32 min
24/7 markets
By the end of this lesson you can
- →Explain what continuous trading removes, and why the absence of a close is not the same as more liquidity
- →Describe the liquidity clock across the week and locate the windows where depth is worst
- →Explain why crypto prices news that other markets cannot yet react to, and what that does to information quality
- →Build the operating discipline that a market with no closing bell requires of a human
Sophomore · enrolled learners
This lesson opens with The weekend of the Silicon Valley Bank failure, March 2023.
- What happened
- Circle disclosed late on Friday 10 March 2023 that $3.3B of USDC's reserves, about 8 percent of roughly $40B, sat at Silicon Valley Bank, which regulators had closed that day. Redemptions through the banking system were unavailable until banks reopened. Crypto markets, which do not close, traded continuously through the weekend on that incomplete information, and USDC fell to about $0.87 with a low near $0.86 while there was no mechanism available to arbitrage it back. On the Sunday, US regulators announced that all SVB depositors would be made whole, and the price returned to a dollar. F102-04 computes the worst-case backing floor at about $0.9175, which the market traded straight through.
- The decision point
- Nothing about the asset changed over those days. What changed is that a market which never closes had to price an event whose resolution depended on institutions that were shut, so for roughly 48 hours the price reflected the distribution of fear among whoever was awake rather than any new fact. Continuous trading did not produce better price discovery here; it produced continuous trading in the absence of the information that would have settled it.
What you will be able to answer
- →What does a market close actually provide?
- →When is depth worst?
- →Why does 24/7 hurt information quality?
- →What discipline does a market with no close require?
Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.
It is free. We do not sell the list and there is nothing to buy at the end of it.
Sources and review
- https://www.coindesk.com/business/2023/03/13/usdc-stablecoin-regains-dollar-peg-after-silicon-valley-bank-induced-chaos
- https://www.cnbc.com/2023/03/11/stablecoin-usdc-breaks-dollar-peg-after-firm-reveals-it-has-3point3-billion-in-svb-exposure.html
- https://www.coindesk.com/research/market-spotlight-the-19-billion-liquidation-that-shook-crypto
- https://www.coingecko.com/learn/october-10-crypto-crash-explained
Confidence high·Volatility medium·Reviewed 2026-08-05·Owner unassigned
Contested
F102-04 uses the same episode to teach reserve composition and the difference between a solvency and a liquidity discount. This lesson uses it for market structure and deliberately does not re-derive the backing arithmetic. Keep the split; if a revision starts explaining reserves here, it belongs in F102-04.
Whether continuous trading improves or degrades price discovery is genuinely debated, and both effects are real: it removes gap risk and it removes the pause in which information arrives. Present the tradeoff rather than concluding, and note that the empirical literature is thin and largely from other asset classes.