Block Trades refer to substantially large transactions of cryptocurrencies or crypto derivatives, typically initiated by institutional investors, which are of a magnitude that would significantly impact market prices if executed on a public limit order book. These trades require specialized handling to minimize disruption.
Mechanism
These large-volume transactions are commonly arranged and executed bilaterally or through specialized over-the-counter (OTC) desks and dark pools, bypassing visible public order books. The process involves a negotiated price between two counterparties, often facilitated by a broker-dealer who may assume principal risk, with execution details typically reported to a clearing entity post-trade to maintain transparency without pre-trade disclosure.
Methodology
The strategic rationale behind block trades is to achieve efficient execution for significant volumes without adversely affecting market prices, thereby preserving alpha and mitigating information leakage. This methodology leverages private liquidity networks and Request for Quote (RFQ) protocols, ensuring discretion and often providing price improvement compared to fragmented public exchanges, which is crucial for institutional crypto investing strategies.
We use cookies to personalize content and marketing, and to analyze our traffic. This helps us maintain the quality of our free resources. manage your preferences below.
Detailed Cookie Preferences
This helps support our free resources through personalized marketing efforts and promotions.
Analytics cookies help us understand how visitors interact with our website, improving user experience and website performance.
Personalization cookies enable us to customize the content and features of our site based on your interactions, offering a more tailored experience.
