Deribit Sees Strong Demand From Institutions, Volume on Its Block RFQ Tool Reaches $23B in Four Months
Deribit’s Block Request-for-Quote (RFQ) system, launched in March, has rapidly become a significant player in institutional cryptocurrency trading, accumulating over $23 billion in trading volume in under four months. This innovative tool caters specifically to the needs of institutional and high-volume traders, enabling them to execute large-scale transactions—known as block trades—efficiently and discreetly.
The system operates by allowing participants (takers) to request quotes for complex trading structures, encompassing spot, futures, or options contracts. Multiple market makers then compete to provide the best bid and ask prices. This contrasts with traditional order book trading, where large orders can significantly impact market prices. The RFQ process ensures minimal market price disruption, akin to negotiating a bulk purchase directly with a supplier rather than participating in a public auction.
This off-exchange (OTC) approach offers several advantages. Multi-leg trades are facilitated, allowing for sophisticated strategies. Multiple maker quotes foster competition, leading to tighter spreads and more favorable pricing for takers. Furthermore, the anonymity offered protects traders’ positions and reduces the risk of adverse selection. Deribit’s CEO, Luuk Strijers, highlighted the system’s efficiency, minimizing adverse selection for makers and improving execution for takers through enhanced price discovery.
The system’s success is evident in its rapidly growing transaction volume. March saw $883 million in volume, escalating to $6.3 billion in April, $9.8 billion in May, and exceeding $6 billion in the first half of June alone. The percentage of block trades executed via RFQ has also climbed steadily, reaching 27.5% in June, up from 17% in April and 21% in May. This surge reflects the increasing institutional interest in cryptocurrencies and Deribit’s commitment to providing sophisticated, high-quality trading solutions. The RFQ system’s success underscores a broader trend of institutional adoption within the cryptocurrency market.
