An Institutional Block Trade denotes a large-volume transaction of digital assets executed by institutional investors, typically structured to minimize market impact by avoiding direct interaction with the standard exchange order book.
Mechanism
These trades are commonly facilitated through over-the-counter (OTC) desks, dark pools, or request-for-quote (RFQ) systems, where a single negotiated price applies to the entire order. This mechanism reduces price slippage and prevents market signaling that could occur with public order book execution.
Methodology
The strategic approach involves seeking deep liquidity providers capable of absorbing significant trade sizes without adversely affecting market prices. This method prioritizes price certainty, discretion, and efficient execution for substantial positions, serving as a critical tool for large-scale asset rebalancing or portfolio adjustments within institutional crypto trading.
Maximal Extractable Value adversely affects institutional block trade execution by eroding alpha through information leakage and predatory transaction reordering.
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