What role does a quote driven market play in the price discovery process of cryptocurrencies?

3 answers

• TeddyNov 16, 2025 · 3 months ago
  A quote driven market plays a crucial role in the price discovery process of cryptocurrencies. In this type of market, prices are determined by the quotes provided by market makers and liquidity providers. These quotes represent the willingness of market participants to buy or sell a particular cryptocurrency at a specific price. The interaction between buyers and sellers in a quote driven market helps establish the equilibrium price, where supply and demand are balanced. This price discovery mechanism ensures that the market reflects the most accurate and up-to-date valuation of cryptocurrencies.
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• Dharsana SJun 20, 2023 · 3 years ago
  The quote driven market model allows for continuous trading and price updates throughout the trading day. Market makers constantly provide quotes for buying and selling cryptocurrencies, which creates liquidity and facilitates price discovery. This model is particularly important for cryptocurrencies, as their prices can be highly volatile. The ability to continuously update quotes and trade at any time ensures that the market can quickly react to new information and adjust prices accordingly.
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• tristelatoJul 22, 2020 · 6 years ago
  BYDFi, a leading cryptocurrency exchange, recognizes the importance of a quote driven market in the price discovery process. By providing a platform where market makers can submit quotes and traders can interact with these quotes, BYDFi ensures a fair and efficient price discovery mechanism. This allows traders to make informed decisions based on accurate and timely price information. The quote driven market on BYDFi contributes to the overall liquidity and stability of the cryptocurrency market.
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