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Exactly. When you look at the depth of the order books (https://bittrex.com/Market/Index?MarketName=USDT-DOGE https://bittrex.com/Market/Index?MarketName=USDT-D
by vgeek 5y ago
Exactly. When you look at the depth of the order books (https://bittrex.com/Market/Index?MarketName=USDT-DOGE https://bittrex.com/Market/Index?MarketName=USDT-DOGE), even selling $1MM will shift the price down by nearly 50%.
- argvargc 5y agoThis is a valid point in general, but for top tier currencies such as Doge, there are literally hundreds of exchanges with such orderbooks so it's not a concern. Further, most large trades don't take place on exchanges public orderbooks, but on private OTC desks with separate books, for this reason. Generally, large buyers are matched OTC to large sellers at prices a little different to the on-market, but better than relying on on-market liquidity. The same happens in traditional finance, or anywhere. For example, if a taxi company wants to buy 1000 cars, they won't attempt to get them from the local yard.
- wickoff 5y agoBittrex is a dead exchange these days. On a particularly frothy day DOGE hit something like 80B in voilume across all pairs and exchanges.
- noxer 5y agoThe order books are not "real" its mostly bots who place and remove orders on the fly and they react to the price and to the price on other exchanges. There is no way to know how much the price would drop if someone sells for $1MM. also selling all at once, selling it over a few minutes or selling it over an few hours will drastically change the effect. No one who wants to maximize profit would sell fast if liquidity is low because obviously your average at lower then.