Bitcoin pioneer Jered Kenna has teamed up with online broker dealer TradeZero to create the world’s first dark pool exchange for Bitcoin and eventually other digital currencies. Dark pools are the name given to private exchanges or forums for trading securities, which facilitate very large orders without impacting the market and creating adverse price movements.
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.
“If a significant holder were to decide they wanted to liquidate their Bitcoin completely and dump it on an exchange all at once then the price could drop quite a bit. Similarly, if another individual places a massive buy order the price would likely rise.”
In traditional markets a so-called “block trade” is generally 10,000 shares of stock, not including penny stocks, or $200,000 (£154,000) worth of