How does dark pool trading work for digital currencies?

1 answers

• May 01, 2022 · 3 years ago
  Dark pool trading for digital currencies, such as Bitcoin and Ethereum, is a method of executing large orders without impacting the market. It works by matching buy and sell orders from institutional investors outside of the public order book. This allows for increased privacy and reduced market impact. Dark pools are particularly useful for large institutional investors who want to execute large trades without revealing their intentions to the market. However, there are some disadvantages to consider. Dark pools are less transparent than traditional exchanges, which can make it difficult to assess the true market price. Additionally, there is a risk of counterparty default and limited price discovery in dark pools. Overall, dark pool trading can be a useful tool for certain investors, but it is important to understand the risks and limitations before participating.
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