Gemini to Allow Block Trading

Gemini to Allow Block Trading

 Gemini will allow all of its customers the option for off-exchange block trading, which helps facilitate large trades, without adversely affecting prices on the market. 

Gemini will allow all of its customers the option for off-exchange block trading, which helps facilitate large trades, without adversely affecting prices on the market. 

A major issue when trading cryptocurrencies (as well as futures and securities) is when a large buy or sell order is filled on that market. A large-scale transaction, which may exceed the liquidity of the exchange, can result in a disproportionate effect on the prices of the cryptocurrency or security in said market. A way to quell this issue is to offer the option for block trading. Block trading allows for large transactions to take place outside of the market, in what is commonly referred as the "Over the Counter" (OTC) market. Block trading has been an individual used by companies in Hong Kong and Australia, in more traditional financial applications. 

The Gemini exchange, famously operated by the Winklevoss twins, plans to offer their investors the opportunity to participate in block trading. Gemini believes that adding this option will move them up the ranks to compete with their larger competitors, namely, Coinbase/GDAX, and the Goldman Sachs-backed Circle Trade. Gemini plans to offer this new option to all of its customers on April 12. Customers wishing to use block trading must be transacting a minimum of 10 Bitcoin, or 100 Ether; they may then set the minimum quantity allowed to fill the order (whether buying or selling), and set a limit price. As noted by coinjournal.net, allowing all customer the opportunity to make a block trade is essentially giving the individual trader access to methods that have been previously only available to institutional investors. 

Cameron Winklevoss made this announcement yestersay, from a blog post regarding Gemini's new trade option: 

Any customer can place a block order that specifies: (i) buy or sell, (ii) quantity, (iii) minimum required fill quantity, (iv) and a price limit (the “Indication of Interest”). Market makers only receive quantity, minimum quantity, and the collar price — they do not receive any other information (i.e., side, price limit, etc.) related to the block order. If a market maker agrees to “make a market” that satisfies the Indication of Interest, the block order will be filled. To learn more, please see our Marketplace page. To participate as a market maker in Gemini Block TradingTM or for further information, please contact bizdev@gemini.com.

In accordance with our commitment to an equitable, transparent, and rules-based marketplace, block orders will be electronically broadcast to participating market makers simultaneously, ensuring best execution and price discovery for those participating in the program. Block orders do not interact with our continuous or auction order books. Trade information will be published via our market data feeds ten minutes following the execution of a block trade.

Onward and upward,

Team Gemini
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