block trades

What Is a Block Trade?

A block trade is a negotiated method for executing large-scale transactions.

It refers to a specialized execution route that allows buyers and sellers to transact significant amounts of assets in a single deal, with the primary goal of minimizing the impact on market prices. Common practices include using exchange-based block trade or RFQ (Request for Quote) channels, OTC (over-the-counter) venues, or on-chain split-order strategies. Participants are typically institutions, funds, market makers, project teams, and “whales” who hold substantial asset volumes.

Why Should You Understand Block Trades?

Block trades significantly influence both price and liquidity, making them key to understanding market volatility. Large buy or sell orders placed directly on a public order book can easily “wipe out” available bids or asks, causing rapid price swings and slippage.

For regular users, block trades help explain sudden price jumps or drops. For institutions, they are crucial for controlling trading costs and managing information leakage risks. Project teams and fund managers also use block trades to rebalance portfolios or distribute unlocked assets discreetly, thus avoiding unnecessary panic in the market.

How Do Block Trades Work?

Block trades generally involve two main steps: price negotiation and subsequent settlement with risk hedging. The pricing phase often uses RFQ mechanisms, where the buyer specifies the amount and timing, and a market maker or exchange provides a net price or spread. On-chain, participants may implement time- and volume-split strategies (such as TWAP—Time Weighted Average Price) to execute gradually and reduce immediate market impact.

Settlement and hedging typically follow price agreement. For example, after settling in USDT or USDC, market makers may hedge their risk on spot or perpetual markets to maintain inventory balance. When using an exchange’s block trade channel, the order does not appear on the public order book, which decreases the chance of copy-trading or predatory strategies by others.

How Do Block Trades Typically Occur in Crypto?

Block trades are most common on centralized exchanges and OTC platforms but also happen on-chain. On exchanges, institutions may use block trade or RFQ channels to get a firm quote for the entire order, then hedge in spot or perpetual markets; for example, on Gate’s OTC desk, counterparties might negotiate deals worth millions of USDT and then lock in directional risk using perpetual contracts.

On-chain, whales often split large token sales into smaller batches on decentralized exchanges, or deploy TWAP/limit order bots to avoid shocking AMM pools with single large trades. Stablecoin transfers across chains and exchanges frequently use split transactions and cross-chain bridges to minimize exposure per move.

NFT or token project teams may also partner with market makers during unlocks or buybacks, arranging block-style executions where counterparties distribute sales across secondary markets—reducing visible selling pressure.

How Can You Minimize the Impact of Block Trades?

1. Assess the depth and capacity of the trading pair: Check order book liquidity and recent trading volumes to estimate potential slippage from a large order.
2. Choose the right execution channel: For very large and time-sensitive trades, use exchange RFQ or block trade channels; for trades with more time flexibility, consider on-chain TWAP execution.
3. Specify settlement assets and price lock terms: Settlements are typically in USDT or USDC with pre-agreed net prices, spreads, validity periods, and minimum/maximum size to prevent last-minute changes.
4. Coordinate hedging plans: Immediately hedge in spot or perpetual markets after execution to keep directional risk within control; match hedge size and pace with trade progress.
5. Manage information leakage and compliance risk: Limit public signals (like unusual large on-chain transfers), verify counterparty credentials and risk controls, and minimize chances of settlement defaults.

What Are the Latest Trends or Data on Block Trades?

In 2025 (using full-year data as reference), institutions have shown a preference for combining RFQ-based execution with hedging strategies. Industry research from Q3 2025 reveals that RFQ deals account for roughly 40% of institutional trading volume on some major exchanges—a trend driven by broader market maker participation and tighter spot/perpetual market integration.

On-chain, high-value BTC and ETH transfers remained active throughout 2025. Public analytics show daily averages of dozens of transactions above 1,000 BTC each, peaking during periods of volatility or ETF-related flows—highlighting needs for rebalancing and OTC settlements.

Stablecoin migration has also become more frequent. In H2 2025, cross-exchange and cross-chain transfers of USDT/USDC above $10 million surged on volatile days as institutions arbitraged price differences and managed liquidity across markets.

As context, block and RFQ usage was relatively low during the early 2024 bull run. With increased market size and more compliant market makers in 2025, concentrated execution demand rose sharply. By early 2026, discreet and low-impact block execution has become industry standard.

How Do Block Trades Differ from OTC Trading?

The terms are often used interchangeably but have distinct focuses. Block trading emphasizes “large-volume, low-impact” execution, achievable through dedicated exchange channels or on-chain split-order methods. OTC (“over-the-counter”) trading refers more broadly to bilateral deals settled outside public order books.

In crypto, many block trades are executed via OTC channels, but some occur within exchanges’ internal block trade/RFQ desks with market maker hedging. Think of OTC as the channel, while block trading describes the execution need or methodology—they can overlap but are not identical.

Related Terms

• Blockchain: A distributed ledger technology that ensures transaction records are tamper-proof through cryptography and consensus mechanisms.
• Smart Contract: Program code that automatically executes transactions on a blockchain when predefined conditions are met.
• Gas Fees: Transaction fees paid by users to execute transfers or contracts on a blockchain network.
• Consensus Mechanism: The set of rules by which blockchain network nodes achieve agreement on data validity and transaction security.
• Block Trade: Large-value transactions executed on-chain, typically involving major asset transfers between institutions.

FAQ

What are the requirements to participate in block trades?

Participating in block trades usually requires meeting specific criteria such as minimum capital thresholds, account levels, or identity verification. Each platform sets its own standards—for example, leading exchanges like Gate have dedicated eligibility requirements for block trade participants. Always review the platform’s rules beforehand to ensure your account qualifies.

How do block trades impact crypto prices?

Due to their scale, block trades can exert significant pressure on prices—often resulting in increased volatility or short-term downward pressure. This is why block trades often use split execution or lock-up mechanisms to smooth out their market impact. New investors should monitor block trade announcements to stay informed about potential price movements.

Can individual investors participate in block trades?

Block trades are primarily designed for institutional investors and high-net-worth individuals, but rules vary by platform. Some platforms like Gate may allow qualified individuals to access block trading channels. Contact customer support for eligibility specifics; not all retail users will be able to participate directly.

How is the price determined in a block trade?

Block trade prices are generally negotiated between buyer and seller—sometimes based on prevailing market rates or mutually agreed terms. This flexible approach offers greater room for negotiation than standard orders; factors such as trade size and liquidity discounts are often considered.

How long does it take for funds to settle after a block trade?

Settlement times depend on both platform rules and mutual agreement between parties but typically range from one to three business days after confirmation. Clarify settlement timelines before trading to avoid misaligned expectations—exchanges like Gate specify these details in their agreements.

References & Further Reading

• https://www.investopedia.com/terms/b/blocktrade.asp
• https://www.cmegroup.com/education/courses/market-regulation/block-trades/block-trades-what-is-a-block-trade.html
• https://www.stonex.com/en/financial-glossary/block-trade/
• https://www.cmegroup.com/clearing/operations-and-deliveries/accepted-trade-types/block-data.html
• https://en.wikipedia.org/wiki/Block_trade
• https://www.usbank.com/corporate-and-commercial-banking/insights/credit-finance/capital-markets/reducing-costs-block-trading.html
• https://uk.practicallaw.thomsonreuters.com/Glossary/PracticalLaw/I2f675a99dd0c11ec9f24ec7b211d8087
• https://www.sofi.com/learn/content/block-trades/