May 2, 2018

Coinbase to Launch Over-the-Counter Block Trades, Says Report

Slippage in cryptocurrency trading has prompted Coinbase, the largest digital currency exchange, to introduce over-the-counter (OTC) block trades, according to a report. The move will allow traders to execute high volume orders without affecting the market.

Coinbase to Lure Institutional Traders With OTC Block Trades, Report Says

Coinbase, a U.S.-based cryptocurrency exchange and one of the largest in the world by trading volumes, is about to launch its over-the-counter (OTC) trading service, which should bring more stability and precision to execution.

Off the main exchange order book, OTC block trading is set to attract a growing number of large market players, increasingly attracted by the trading opportunities offered by bitcoin et al., as the market cap blows up above $400 billion, with over $23 billion traded in 24 hours.

OTC trading within the cryptocurrency market has grown extraordinarily in recent months. The world’s largest OTC exchange deals approximately $2 billion a month and a number of trading desks have transacted over $100 million worth of cryptocurrencies daily, with minimum ticket sizes between $75,000 and $250,000.

The San Francisco-based company has been positioning itself as a valuable solution for the institutional trading industry since 2014 with its GDAX (Global Digital Asset Exchange) exchange. Supporting OTC block trades may be a major step forward to lure large institutions that make markets.

Larry Tabb, the founder of consulting firm Tabb Group, told Business Insider that OTC trading might be an important service for any exchange that wants to capture the influx of institutional money to digital currency markets.

In addition to supporting OTC block trading, Coinbase is reportedly hiring a head of market structure in charge of exploring new order-types, liquidity incentive programs, and other market safeguards. Tabb believes these incentives will bring institutional liquidity to GDAX.

“Those are the things they need to be thinking about. How do we get Virtu, Citadel, DRW, Susquehanna to make markets. It’s going to be a combination of incentives, order types, connectivity, co-location, and pricing”, Larry Tabb said in an email.

As Coinbase guns for larger customers, over-the-counter trading brings a number of benefits for traders who are looking at the cryptocurrency market. The new service should be able to widely reduce current slippage problems that penalize high-volume transactions in thin markets. Inadvertent price movements are more noticeable in less-widely-used currencies.

OTC block trading is growing, but firms still face the absence of clear rules from regulators in the United States. The Commodity Futures Trading Commission (CFTC) considers bitcoin a commodity, while the Securities and Exchange Commission (SEC) says some cryptocurrencies may be securities.

Image from Shutterstock.

Published at Wed, 02 May 2018 16:00:29 +0000

Crypto

You might be interested in …

December 2, 2018

FarmaTrust, Mongolian govt. to combat counterfeit drugs

CoinReport FarmaTrust, Mongolian govt. to combat counterfeit drugs London, UK-based pharmaceutical supply chain security firm FarmaTrust announced in a press release CoinReport received from Blonde 2.0, FarmaTrust’s PR agency, that it, along with the government […]

November 6, 2018

HSBC Executes India’s First Overseas Blockchain Payment for Major Company

Bitcoinist.com HSBC Executes India’s First Overseas Blockchain Payment for Major Company The British banking giant HSBC has reportedly executed the very first overseas financial transaction of Reliance Industries (RIL) to a US-based client using blockchain […]

September 15, 2017

Mexican Bitcoin Exchange Bitso Aids Red Cross Earthquake Relief Efforts

Bitso, a cryptocurrency exchange in Mexico, has continues its campaign to aid the victims of the recent earthquake in Mexico.

A few days ago, Bitso announced their support for the Mexican people who were affected by the recent earthquake. The cryptocurrency exchange has enabled donation wallets that can be used by the company’s clients to send aid using different digital currencies, such as bitcoin, ether and ripple. According to Bitso, cryptocurrency donations are a quick and efficient way to help the victims since the assets are easy to transfer.

Unfortunately, some people have lost their homes, their belongings, and sadly even the lives of their loved ones. We are hoping this aid will help them return to their daily activities as soon as possible.

Thousands of homes were destroyed and nearly 100 people have died across the country as a result of an earthquake that struck just before midnight on September 7. It reached a magnitude of 8.2 on the Richter scale.

The donation details can be found on the cryptocurrency exchange’s blog:

“Join this campaign and help the efforts made by the RED CROSS in Mexico by using the hashtag #BitcoinAidMexico and make a donation to one of the following accounts:
bitcoin (BTC) 1DaHfXsoPfZ2jznJhB62vR3QEVFhhZ2tMR
Ethereum (ETH) 0x88B6021aE4BB9830f2E9D5BB38B83427b9D7ffEc
Ripple (XRP) rEFMdiTbLmZq5ZiMGrWGoyP48DMFqXjNkM [No Destination Tag required]”

The Red Cross thus far has been able to set up collection and relief centers in several areas affected by the earthquake, especially in the southern states of Oaxaca and Chiapas, benefiting around 24,000 people.

Due to the transparency, traceability and real-time reporting of the technology, donations can be easily tracked by users at any time. The total amount Bitso has raised will be exchanged later for Mexican Pesos (MXN) at market rates. Bitso wrote:

“The equivalent amount in Mexican Pesos will be transferred using a local bank wire to Cruz Roja I.A.P. (RED CROSS Mexico) to the bank account CLABE 012180004040404062. This CLABE number can be validated on their website https://www.cruzrojamexicana.org.mx or on their twitter account: https://twitter.com/CruzRoja_MX/status/906600599864582144”

The deadline for sending the funds is September 15; however, Bitso added that if they still receive funds later, the company will exchange those donations between September 15 and 22, and wire them to the Mexican Red Cross.

Bitso highlighted that there is no minimum amount for donations and that they will accept all transactions. The company wrote that the fundraising started with them donating MXN $50,000, which will be added to the total amount of donations.

The amount the company has raised and the transaction proof will be publicly displayed for total transparency.

Bitso emphasized that although the Mexican Red Cross will ultimately receive the funds, user contributions cannot be used as tax deductions.

“Important: BITSO will not make any user contributions tax deductible. Mexican Pesos will be transferred on behalf of third parties according to Mexican law LISR artículo 35, and the following TIN XAXX010101000 will be used in order to generate the corresponding payment as ‘General Public Invoice.’”

The post Mexican Bitcoin Exchange Bitso Aids Red Cross Earthquake Relief Efforts appeared first on Bitcoin Magazine.