What are the potential risks of pay to order flow for cryptocurrency investors?

Can you explain the potential risks that pay to order flow poses for cryptocurrency investors? How does it affect their investments and what should they be aware of?

1 answers
- Pay to order flow poses potential risks for cryptocurrency investors. The practice can introduce a lack of transparency and fairness in trade execution, as exchanges may prioritize the interests of market makers who pay for order flow. This can result in trades being executed at less favorable prices for investors. Additionally, pay to order flow can incentivize exchanges to encourage high-frequency trading, which can lead to increased market volatility and potentially make it more difficult for investors to execute trades at desired prices. It's important for investors to carefully consider these risks and make informed decisions when participating in pay to order flow.
Mar 20, 2022 · 3 years ago
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