Re:MasterCard to open up network to cryptocurrencies
by derefr on Thursday February 11, 2021 @08:19PM
(#26109769)
But the whole point of a bank doing something like this, is that they have the reserves needed to not have to buy/sell on the open market. They can take your "sold" token and give you the observed market rate for it; then put the tokens you gave them in their own holding account, listing them on the exchange for the price they're willing to pay, and wait. They're in no hurry to liquidate.
If a buyer then comes along who's willing to pay that price—and that price is higher than the current market price for the token—then the token goes up in value.
When your sell order is higher than the highest bid it will be put onto the order book. If your buy order is lower than the lowest ask it will be put onto the order book.
You can sell or buy instantaneously by fulfilling an existing order. When you do a market order the exchange automatically presents you with the most favorable order. Once that favorable order is gone it will take the second most favorable order and so on. Each new order is less favorable than the last one.
By repeatedly selling Bitcoin you are clearing the order book on the buy side. Less buyers mean lower prices.