Is BitCoin trading approaching “normal” or is it a post holiday hangover?

dec 21 - 26 btc chart

As I write this post, I wonder if the fact that both the spread between Cboe and CME futures to the price of “spot”  Bitcoin and the spread between the CBB being higher than the CBO for BitCoin has narrowed is due to a holiday hangover or represents normalcy.  Privately, I suspect the former, but we shall see…

It does, however, allow us to make an important point about the value proposition for CoinRoutes;  We did not build a smart routing framework to focus on arbitrage profits, but rather to make trading by investors more efficient.  Even with almost perfect alignment of the CBBO, an investor using our SOR can save money and find better liquidity, as can be seen in the case of a small institutional order for BitCoin.  As seen below, the savings is “only” 13 basis points:

SOR 20 BTC Dec 26

 

This, of course, would scale up for larger orders or for trading in other cryptocurrencies.  For example, at the same time, an order for less than half that size in BitCoin Cash would save 51 basis points using the SOR:

bch-btc dec 26 sor

 

Over the coming weeks and months, we will likely continue to see interest in trading these assets and, more than likely, a return of volatility and market dislocations.  Investors that expect this, or simply want to trade more efficiently should contact us on the website home page.

Happy Boxing Day everyone!

 

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