Crypto Exchanges Lure High Speed Traders Through Block Trades.
Crypto exchanges have set up the games to lure the fastest traders on Wall Street. These digital currencies exchanges boomed in 2017s are now increasing their money hand-over-fist by adding customers. However they did not succeeded in grasping large institutional investors but has attracted the small time traders to the platform. This will provide liquidity and beefing up their capabilities to draw in big traders later on.
Large traders investors boosts volume game in exchange business. So the more volume equals more profit. But these high profile customers opted to trade in over-the-counter markets rather than retail exchanges. It’s because the big trades can impact broader market price in crypto exchanges. And the OTC markets are more efficient especially for size.
Crypto exchanges provide the solution of these problems by offering block trades. Block trades are privately negotiated transactions, executed off an exchange main order book, noncompetitive; as to not move the market in direction against the trader.
The cryptocurrency exchanges Gemini and Coinbase have started supporting block trades. Weisberger, CoinRoutes Chief Executive has shared his views as; Bitcoin has the clear need to add more tools for block trading and the companies would reward if they fill that need.
Crypto exchanges need to increase liquidity to their venue by providing different incentive programs, which also require discounts to certain market markers. As the IEX, the upstart stock exchange offers discount programs on trading fees across a number of securities, which also increases liquidity on its venue. With these types of incentives, crypto exchanges are more likely to attract traditional market markers, suggested by executives from market making firms.
Crypto exchanges are now looking for co-location capabilities. Which will allow traders to house their servers in the same building as exchange matching servers. The crypto exchanges are building their infrastructures and other market developments to look like traditional equities exchanges as to compete with large trading firms.