Deribit, a Dutch crypto derivatives exchanges is partnering with American trading platform Paradigm to launch the first ever block trading tool solution which will enable institutions to negotiate derivative trades.
According to Investopedia, the definition of a block trade is:
the sale or purchase of a large number of securities. A block trade involves a significantly large number of equities or bonds being traded at an arranged price between two parties.
Image provided by Deribit Exchange
This new tool would allow private negotiated transactions between two parties which would then be executed by the exchange. Deribit wants to get rid of risks while using an order book, allowing institutional traders to directly negotiate large trades with each other via their preferred communication channel.
Deribit claims that no other exchange has ever offered a block-trading platform for crypto derivatives.
For the first time, institutions that trade crypto derivatives in large volumes can negotiate privately on the Paradigm platform, after which the trade will be automatically executed, margined and cleared at Deribit and displayed on the public tape as a block trade, eliminating any execution risk associated with the order book
Said Philippe Bekhazi, the CEO of XBTO Group.
Institutional Investing in Crypto seems to be more present than ever and a lot of exchanges are coming up with innovative technology to allow institutions to enter the Crypto market. Hybrid exchanges that leverage the benefits from both centralized and decentralized exchanges are being created at a rapid pace.