After the 2008 crash and the Lehman Brothers collapse, HFTs or High Frequency Trading were introduced to the market. Exchanges like the NYSE gave incentives to companies to add liquidity to the market, which resulted in the popularity of HFTs.
The HFTs were introduced most importantly to increase liquidity and also to remove the bid ask spread. However, HFTs disadvantages could be seen in these tense times. HFTs withdraw liquidity when there are complex news that the algorithms are not programmed to analyze. An example of this was back in May 2010 when the Dow Jones dropped 1000 points in a day and 10% in 20 minutes before making that back. This drop was because of a massive order that triggered a sell off. A more recent example is the political tensions that happened in Italy. HFT’s algorithms could not understand the informations like human traders. HFTs could widen the bid-ask spread or get out of the market. If that happens, it would lead to a big share of liquidity for human traders which is not great because the bench of risk taking capacity has decreased over the last 10 years.