Read on Twitter
1/n
Thread on how Coinbase facilitates crypto purchases for their institutional clients:
The quoted tweet links to a case study for how Coinbase obtained #BTC
for One River:
https://primebroker.coinbase.com/content/dam/prime/downloads/pdfs/Coinbase-Institutional-One-River-Case-Study-Jan-2021.pdf https://twitter.com/CoinbasePro/status/1346452770799411203
Thread on how Coinbase facilitates crypto purchases for their institutional clients:
The quoted tweet links to a case study for how Coinbase obtained #BTC
for One River:https://primebroker.coinbase.com/content/dam/prime/downloads/pdfs/Coinbase-Institutional-One-River-Case-Study-Jan-2021.pdf https://twitter.com/CoinbasePro/status/1346452770799411203
2/n
It shows that Coinbases uses 'Algorithmic Smart Order Routing', meaning they try to buy the most amount of coins at the best possible prices, for the least amount of market impact from several venues (other exchanges & liquidity providers).
It shows that Coinbases uses 'Algorithmic Smart Order Routing', meaning they try to buy the most amount of coins at the best possible prices, for the least amount of market impact from several venues (other exchanges & liquidity providers).
3/n
So, Coinbase would be inclined to buy coins from exchanges with very liquid orderbooks and large supplies that suppress price.
But somehow everyone seems to think that a Coinbase sells their clients their own supply, causing a premium.
So, Coinbase would be inclined to buy coins from exchanges with very liquid orderbooks and large supplies that suppress price.
But somehow everyone seems to think that a Coinbase sells their clients their own supply, causing a premium.
4/n
That's the wrong way of thinking about it.
Coinbase' liquidity is shit, which means it doesn't take much to push price up.
In contrast, Binance had a large supply liquidity the other day, causing a **discount** on Binance.
That's the wrong way of thinking about it.
Coinbase' liquidity is shit, which means it doesn't take much to push price up.
In contrast, Binance had a large supply liquidity the other day, causing a **discount** on Binance.
5/n
So, it would make sense for CB and everyone else who buys in bulk, to shop at very liquid exchanges to satisfy their mission statement of buying in cheap and in bulk without moving the market.
Here's an example of Alameda buying that Binance wall:
So, it would make sense for CB and everyone else who buys in bulk, to shop at very liquid exchanges to satisfy their mission statement of buying in cheap and in bulk without moving the market.
Here's an example of Alameda buying that Binance wall:
6/6
Of course, Coinbase, as a US company probably doesn't buy on Binance directly.
But maybe they partner with people who do.
And if not, there are other exchanges with better liquidity than Coinbase.
So, watch trading activity on exchanges with discounts to spot them.
Of course, Coinbase, as a US company probably doesn't buy on Binance directly.
But maybe they partner with people who do.
And if not, there are other exchanges with better liquidity than Coinbase.
So, watch trading activity on exchanges with discounts to spot them.
