A Standard Block Trade refers to a large, pre-arranged transaction of a cryptocurrency asset or derivative that meets a pre-defined minimum size threshold. These trades are typically executed outside the continuous public order book but are subsequently cleared through an exchange or a central clearinghouse.
Mechanism
Two parties, often institutional investors, agree on the specific asset, quantity, and price of the transaction. This agreement is then reported to the designated exchange or a specialized facility, which processes the trade without it directly impacting the visible order book. The trade is typically settled at the single, negotiated price.
Methodology
The strategic objective of a Standard Block Trade is to facilitate the efficient transfer of significant positions without causing undue market price disruption or prematurely revealing trading intentions. It provides institutional investors with a mechanism to manage large exposures discreetly, leveraging negotiated prices and centralized clearing for operational efficiency and robust risk management.
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