Wow. I never thought of the cryptocurrency being a really good counterfactual to the efficient market hypothesis. I think the efficient market hypothesis is an alluring idea, but then bubbles pop and you realize it was all castles in the sky and huh, maybe the crowds aren't so wise. So EMH is a "bad" explainer, but the best one we have. Now that I think about, that's how you can describe all hypotheses and models--the least bad explanations we have at the moment.But you look at something like Bitcoin where fewer than 200,000 people in the entire world own any and some unknown quantity of it is in the possession of Chinese Tongs and where the world's largest holders are anonymous and the efficient market hypothesis is a joke.
The model is only as accurate as its boundary conditions. If you don't need to worry about the externalties, efficient markets hypothesis works (ish). But the problem is the steady-state condition of commodities trading is unregulated dark pools so anything between an unregulated dark pool and ETrade is a gerrymandered curve fit fought by trade groups, industry insiders, regulators and elected officials. Crypto is the same, only without the curve fit, the gerrymandering, the trade groups, the regulators or the elected officials. It is a wretched den of scum and villainy. And there, but for the grace of the SEC, goes the stock market. Any fairness within a trading system is synthetic. If you can keep your trades to the synthetic boundaries where fairness is most strongly enforced, you will experience fairness. Investors, however, aren't interested in fairness, they're interested in advantage. Thus, the money tends to seep into the corners. And depending on who's regulating it and how, corners are often all that's left.