Dark Pools Demystified
February 13, 2017
Have you ever heard of dark pools? You may be hearing more about them as Bitcoin pioneer Jered Kenna and TradeZero offer digital currency dark pool trading. According to this International Business Times article, these two have created the world’s first dark pool exchange for Bitcoin. Their plan is to eventually scale to include other digital currencies. What is a dark pool? It is a private exchange to trade securities in a way where large transactions can occur without impacting the marketing. This means it can be used to avoid adverse price movements. We learned,
The Bitcoin market is less liquid than traditional FX and hence more volatile. Dark pool trading in Bitcoin would be useful to mainstream investors who may want to make large trades in Bitcoin, or use it as a currency hedge without alerting the market to their positions. Kenna, who launched the first US Bitcoin exchange in 2011, brings a wealth of experience to the table. He told IBTimes UK: “Dark pool trading certainly mitigates volatility where individuals making large trades are concerned.
Apparently, the size of the trade one would need to impact the Bitcoin market in is much smaller than what traditional traders experience. Jared Kenna appears to be projecting the future of Bitcoin, and non-traditional currencies in general, to explode. Why else would there be such a need for this kind of service? This is something we will be keeping an eye on, especially as it may come to be more interconnected with Dark Web matters.
Megan Feil, February 13, 2017
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