Group Co.
Block Crypto Venue HiveEx Launches Amid Vast Adverse Selection
Traders Magazine Online News, April 3, 2018
A new report into the cryptocurrency exchange market has uncovered a bleak reality, with potentially thousands of dollars wasted by people who make large cryptocurrency trades on exchanges.
The inaugural Cryptocurrency Exchange Landscape Report was released Wednesday, March 28, 2018 by HiveEx.com, which is the latest business venture by the owners of Australia’s most visited financial comparison website finder.com.au, Fred Schebesta and Frank Restuccia.
HiveEx.com was launched in February 2018, and is one of Australia’s first over-the-counter (OTC) trading decks for ‘sophisticated investors’, to buy and sell large volumes of cryptocurrency at a fixed price. In its first few weeks of operation, HiveEx.com processed over $2 million across three different coins: bitcoin, Ethereum and WAN Chan.
Fred Schebesta, HiveEx.com Co-founder, wanted to launch the OTC desk after discovering the difficulty with trading large volumes on exchanges.
“After launching cryptocurrency exchange comparison Crypto Finder in September 2017, we realised that it’s super difficult to do large trades. If you tried to buy over $50,000 worth of cryptocurrency on an exchange, it usually results in ‘slippage’ of 10-15% plus fees. This is due to exchanges unable to process big trades in one transaction. The trade will usually be made over several smaller transactions and each transaction can be set at a different price.
“Other factors that impact big trades on exchanges include transaction methods, verification levels, how long a customer has been trading and the exclusivity of the platform. It can also take days for a trade to be processed on an exchange. HiveEx.com aims to solve these issues by accessing funds through liquidity providers that process large transactions outside of exchanges.
“This is only just the beginning for cryptocurrency trading, and we’re excited to be a part of the evolution that’s changing the way people do banking.”
The HiveEx.com report takes a deep dive into the cryptocurrency exchange landscape, and features a case study that compares a trade for bitcoin (BTC) of AU$400,000 on an exchange with the highest volume of trades in Australia, versus HiveEx.com. The trade quote needed to be increased to AU$407,400.62 to fit the available trade limits on the exchange’s Sell Orderbook.
It would have taken 46 individual transactions to trade this figure on the exchange, and would cost a 0.23% fee. This returned 34.31 BTC after fees were deducted. Comparatively, HiveEx.com would take one transaction and return 35.03 BTC after fees. This 0.72 BTC difference between the two providers was worth AU$8,404.34 (US$6,464.88).
A summary of the report findings can be found below;
Please note:
- While it took 46 transactions for the HiveEx.com/exchange case study scenario, this can vary depending on available trade orders and trade size.
- The case study exercise was conducted at 10am on March 21, 2018, and is not indicative of future prices.
Report Findings:
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