The institutionalization of cryptocurrencies is accelerating rapidly.
Since its on-demand liquidity tool (deribit Block request-for-Quote (RFQ) interface) debuted in early March, cumulative trading volume exceeded $23 billion in less than four months.
Deribit is an outstanding derivative exchange that provides Bitcoin traders with the world’s largest options market
ether, Solana and XRP. It also offers futures and spot trading.
The exchange launched the Block RFQ system in March, where participants (takeovers) are often institutions and large numbers of traders, requiring pricing structures – single instrument trading or multi-legged strategies involving field, futures or options. A block transaction is a large transaction.
Market makers, the entity responsible for providing liquidity, then respond with a one-sided or two-sided quote, then show Taker the best quotes for bids and inquiries. Then show Taker the best quote for bids and ask for the best quotes they can trade by bidding or asking for the deal.
The system allows large traders to execute orders more efficiently outside of the public order system, ensuring minimal impact on market prices.
Imagine buying large quantities of vegetables directly from the farm (OTC) and getting higher prices and more flexible terms instead of bidding in a crowded market where large orders can greatly increase prices.
Deribit CEO Luuk Strijers told Coindesk. “The RFQ system allows for multi-leg trading, multiple manufacturer quotes and higher price efficiency, which can improve execution of large OTC transactions while minimizing adverse options. It reflects strong institutional demand, and Deribit continues to focus on liquidity and trade quality.”
Strijers notes that the system targets the needs of professional and agent transaction operations, such as support for complex structures and large batches.
“Block RFQ allows multiple liquidity providers to compete for some quotes, while manufacturers benefit from reduced adverse options that allow for stricter quotes, while recipients enjoy increased price and anonymous options,” Strijers noted.
The RFQ system processed $883 million worth of transactions in March, and the activity flourished at $6.3 billion in April. This momentum continued in May, with Talley reaching $9.8 billion in the first half of June, exceeding $6 billion.
If that’s not enough, the percentage of blocked transactions executed through Deribit’s RFQ has increased to 27.5% this month, up from 17% in April and 21% in May.
