The bitcoin currency market is still a very small boat in a large sea when it comes to the world of currency. Bitcoin’s global digital currency is not like any fiat currency except in the fact that its relatively small size does make it vulnerable to high volatility and market fluctuations, just like a smaller fiat currency would be. A large purchase can act like a ship creating a huge wake next to a small sailboat, causing massive instability. Kraken is one of the world’s leading bitcoin exchanges and is looking to help solve this problem with their new “Dark Pool” program for large purchases of bitcoin.
Posted on Reddit by “h0oneypot”, the new release of Dark Pool looks like an email update through their newsletter or current customer mailing list. Additional information and details have not been posted to Kraken’s website.
“We are pleased to announce the Kraken dark pool, a new feature that allows clients (to place discreetly) large bitcoin orders and execute against similar-sized orders at potentially better prices. Kraken is now one of the few exchanges offering a dark pool for bitcoin. The Kraken dark pool is an order book not visible to the rest of the market. Each trader only knows their own orders.”
“Traders can anonymously place large buy or sell orders without revealing their interest to other traders. Typically, outsized orders, when seen by other traders will cause the market to move unfavorably, making it more difficult to fill the order at the desired price. This unfavorable price movement may be avoided in a dark pool.”
To qualify for the Dark Pool program, you must have a Tier 2 buyer account at Kraken, and you will pay an additional 0.1% on your trade. The minimum order would be 50 BTC. Most major fiat currencies including Dollars, Yen, Pounds, and Euros are accepted, and the trades will be denoted by a “.d” on the transaction.
Hopefully, this is a step in the right direction for an improved level of bitcoin market price stability, as I’m sure they get a decent number of large buy order requests. Maybe they can run this as a test for the rest of 2015, and report on the findings of how the market stabilized after large orders this year versus previous orders without the system, and it can become a standard for all exchanges to adopt in 2016.
Do you see any potential issues with this new format for large buy orders at Kraken? Share above and comment below.