Iceberg Orders in Crypto Ecosystem

June 21, 2022



Crypto Trading is gaining huge momentum in the world due to an increase in the number of crypto enthusiasts, traders, and investors across the globe. As a result, besides the traditional trading method, several other conventional and more refined methods have invaded into the ecosystem. One such method is Iceberg Order. The concept of Iceberg orders has created a great buzz in the crypto ecosystem lately. So let’s out find more about Iceberg Order.

What is Iceberg Order?

An Iceberg Order is a trading method where a large number of cryptocurrencies are bought and sold dividing them into smaller chunks.  They are also termed Reverse Orders. At times the gigantic drop in the value of cryptocurrencies disrupts the market and affects not only the person placing the order but also the other traders.

The investors who wish to execute big transactions divide them into different smaller orders. Since no one notices the series of smaller transactions amongst all the activities. Furthermore, by the time someone finds out about those small transactions, the investor has already executed them.

Who uses Iceberg Orders?

In most cases, Iceberg Trades are executed by large institutional buyers who are generally the market makers who provide offers and bids. In the case of crypto, they are referred to as institutional crypto investors.  Their large trading size collectively impacts the crypto market.  They trade through Level-2 order books which contain complete detail of the bids, asks, volume, timestamp, and other real-time data. Besides this, there are few smaller private traders who execute Iceberg orders but that’s quite unusual.

Benefits of Iceberg Orders

Iceberg trading helps to avoid major fluctuations in the crypto market such as price disruptions, and frequent demand and supply changes. Thus, the major purpose of the Iceberg transactions is to prevent panic in the market. These transactions are conducted in a very structured manner where the broker executes the transaction until the schedule and total already are completed.

Let us suppose if person A wants to sell 2000BTC, he can do that by dividing it into smaller order multiples like 300BTC, 500BTC, 200BTC, 350BTC, etc. The process goes on till the entire 2000 BTC has been sold.

This may seem like hidden order but there lies a significant difference in the way they are executed. Hidden Orders are executed only after they are shown up in the order book whereas Iceberg Orders are executed directly.

How do Iceberg Orders work?

By converting the large orders into several small quantities the investors try not to influence or upset the market at large. By staying off the radar in the market through their small transactions they are able to execute their order at the desired price.

However, the first step is to identify the Iceberg Order, to begin with. Thus, one shall start by considering the level 2 order books. Since level 1 talks about basic price structure with no detailing on the same therefore Level 2 is considered. The latter comes with a lot more in-depth price knowledge and market depth relating to the 10 best bids and offer prices. Another reason for using a level-2 order book is that when the first order is executed, the next part reloads immediately for which it’s important to understand and track the price patterns.

How to place an Iceberg Order?


There are certain platforms that support the Iceberg transactions by providing direct access to the order books and market. Users need to open accounts on these platforms for trading big amounts in the smaller steps by selecting an order type. However, these transactions cannot be executed on the regular trading platforms since they do not provide Direct Market Access (DMA) which is the mandatory requirement for Iceberg trade. DMAs are the technologically advanced platforms users get direct access to order books like BitMEX, BitFinex, and others.

Final Words

This concept of trading has been around in traditional markets too but got a real boost in the Digital or Crypto Market where fluctuations are quite frequent. Executing Iceberg transactions lowers the fluctuations in the crypto market but so far has proved beneficial for the large crypto investors with the large trading size.  Thus, to make the best of these transactions the need for an hour is the DMA upgraded crypto trading platforms.

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