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The Block Trading feature is specifically for crypto ‘whales’ where the ondergrens threshold is kept for an order of Ten Bitcoins or 100 Ether tokens.
Related movie: Gemini – Bitcoin and the Future of Finance
Popular cryptocurrency exchange Gemini that is operated by the Bitcoin billionaires – Winklevoss Twins, made an significant announcement of Monday of permitting block trading for Bitcoin and Ether tokens which will be commenced zometeen this week. The fresh feature is said to have bot introduced to subside the effect of gigantic price fluctuations ter Bitcoin and Ether prices due to gigantic buy/sell orders.
Thus using this fresh feature introduced by Gemini, customers will be able to make high-volume trades that won’t be reflected te the exchange’s order book until the time they have bot filed. This will permit the crypto ‘whales’ to continuously trade outside the exchange such that a single trade can have a collective outsized effect on the market.
The ondergrens threshold is kept for an order of Ten Bitcoins or 100 Ether tokens which means that this feature can’t be used by puny traders. Geminin te its blog postbode writes that the block trading feature is a way to create “an extra mechanism to source liquidity when trading ter greater size.”
All the transactions made using the block-trading toneelpodium will be placed ter a 10-minute delay while ensuring that all the participants ter the market get an access to pricing and liquidity information without having large instantaneous effects on the price. Te its blog postbode, Gemini writes: “In accordance with our commitment to an equitable, semitransparent, and rules-based marketplace, block orders will be electronically broadcast to participating market makers at the same time, ensuring best execution and price discovery for those participating te the program.”
The other option is to place the over-the-counter trade orders that take place outside the exchange by splitting trade orders into smaller chunks while further reducing the influence to supply and request. Reuters recently reported that there are a few firms ter the U.S who do such over-the-counter trades including Circle, Cumberland Mining (a division of DRW Holdings) and Genesis Universal Trading.
Block trading is one of the most commonly used approaches by hedge funds and institutional investors ter the stock market te order to reduce the effect of dramatically fluctuating prices te the open market.
While explaining how this block trading toneelpodium will function, Gemini te its blog postbode writes:
This fresh feature is expected to Gemini and edge overheen its other competitors.