Gemini, the bitcoin and ether exchange launched by the Winklevoss twins became the first to offer everyday bitcoin auctions.
The first auction was held on September 21 and was traded 2 104 BTC, at $593.67.
According to the company announcement, daily auctions are a feature of traditional asset exchanges like the NYSE, Nasdaq and BATS and increase price discovery and transparency and reduce costs. Bitcoin exchanges, on the other hand, are missing some of the mechanisms of the traditional trading venues and make bitcoin trading inefficient.
“We are confident that our Auction will bring you the benefits of over-the-counter (OTC) trading without the overhead, hassle, and lack of transparency of these archaic trading venues,” the Gemini announcement says.
The daily auctions will be held every day, including holidays and weekends, at 4:00 p.m. Eastern Time.
All eligible orders will be filled at the final auction price at 4:00 p.m. ET. The final auction price of each Auction is determined by finding the price at which the greatest aggregate buy demand and aggregate sell demand from all participating orders can be filled (i.e., the price at which the largest quantity can trade).
Initially only the BTC/USD pair will be auctioned, but the other trading pairs of Gemini will be also included in the coming weeks. The aim of the daily auction is to facilitate high volumes of trading between customers at a fair price by matching the maximum quantity to be bought and sold.
The Gemini auction will offer its clients greater price discovery, mark-to-market benchmark price, lower trading fees, instant settlement and no counterparty risk.
The Gemini exchange was launched in October 2015 and until recently offered trading in bitcoin and other “regular” currencies. In early May it got a license from the New York State Department of Financial Services (NYSDFS) for trading in ether.