Maurice Allais and the Illusion of Continuous Markets

A few weeks ago, I shared an intuition on Twitter: the future of crypto will require non-continuous markets.

Batch auctions.

Time segmentation.

Anything that breaks the illusion of a price that must move every second.

On LinkedIn, my friend Hubert de Vauplane — author, lawyer, fin-reg expert — replied: “You’ve just rediscovered Maurice Allais.”

I had heard the name.

I had never taken the time to read him.

I assumed it was another French economist buried under academic reverence.

Then I opened his work.

Claque immédiate.

A man who spent his life arguing against the dominant models of his time, irritating everyone, contradicting the mainstream at every turn. And still managed to win the Nobel Prize. That alone should make you pause.

But what shocked me most was this: Allais saw, sixty years ago, the fundamental flaw of continuous markets. And he articulated it with a clarity that makes the current financial system look naïve.

Let’s unpack what he understood — and why it matters now, especially for crypto.

Continuous Markets: A Beautiful Idea That Fails in Reality

Continuous trading is treated like a law of nature.

Prices should update every second.

Information should be absorbed instantly.

The market should never sleep.

This story flatters the modern imagination.

It also creates fragile systems.

Allais started from something obvious that economists ignored: real markets are not continuous. People think in bursts. Information arrives in shocks. Decisions cluster.

The continuous structure forces noise to look like information.

A small imbalance becomes a signal. A signal becomes a trend. The trend converts into a cascade.

The system reacts not because something happened in the world, but because the system is built to react.

This is the foundation of Allais’s critique.

What Continuous Trading Really Produces

1. It amplifies noise.

In a continuous system, the market behaves like an over-sensitive microphone.
It captures everything and stabilizes nothing.

Prices twitch from micro-orders.
Algorithms chase shadows.
Volatility becomes structural.

2. It rewards speed, not understanding.

When timing becomes more valuable than insight, you don’t improve markets — you distort them.

High-frequency traders gain.
Fundamental investors chase distortions.
Everyone else becomes collateral damage.

3. It disconnects prices from fundamentals.

A price that moves 40 times per minute is not reflecting 40 updates about the real world.
It’s reflecting 40 internal impulses of the machine.

When the structure encourages exaggeration, exaggeration becomes the norm.

Allais saw this decades before HFT, crypto, or flash crashes.

His Solution: Stop the Machine

Allais wasn’t romantic.
He wasn’t calling for less capitalism or less finance.

He wanted a market that actually reflects something real.

His proposal was radical in its simplicity:

One clearing price per day.
One global fixing per asset.
Batch-based equilibrium instead of continuous reaction.

During the day, everyone submits orders.
At a fixed time, the market clears.
One price emerges — the price that aggregates all supply and demand.

Not the last trade.
Not the fastest algorithm.
Not the panic of the moment.

A real equilibrium.

This structure does three things:

1. Noise cancels out.
2. Speculation loses its mechanical advantage.
3. Prices become signals again.

It’s hard to exaggerate how modern this vision feels when you read it today.

The World Proved Him Right

He predicted, almost verbatim, what we now call:

• flash crashes
• liquidity voids
• reflexive feedback loops
• volatility spirals
• the casino architecture of 24/7 markets
• crypto meltdowns
• algorithmic cascades

Allais wrote before any of this existed.

Yet his analysis reads like a post-mortem of 2010, 2020, 2022… and everything in between.

Continuous markets create fragility because they must.
It’s how they are built.

The Deeper Insight: Market Design Controls Market Behavior

That is the essential lesson.

Markets do not reveal truth.
They reveal the consequences of their own architecture.

Design a continuous system → obtain instability.
Design a periodic system → obtain stability.

This is not morality.
It’s mechanics.

Crypto, ironically, is now in the perfect position to test Allais’s intuition.
It is global, real-time, and structurally continuous — which means it is structurally volatile, structurally reflexive, and structurally fragile.

If the next generation of crypto markets wants to break free from volatility addiction and build real economic use cases, they will need to adopt the architecture Allais described.

Not because it is elegant.
But because it works.

Closing

Maurice Allais wasn’t ahead of his time.
He was simply honest about the physics of markets.

Continuous trading is not natural.
It’s not neutral.
It’s not efficient.
It just hides its own instability behind speed.

Allais saw that a market that never pauses becomes a market that never thinks.

And today, in a financial world built on constant motion, his message lands with a simple force:

Slow the structure, and you stabilize the system.