Institutional investment is increasingly being seen as the future of crypto trading, with both Binance and Bittrex launching their own dedicated over-the-counter desks in January.
Bittrex launches OTC desk after increased client demandAnother company to recently launch an OTC desk is United States-based cryptocurrency exchange Bittrex.
Circle leads the way with OTCDespite the abundance of recent over-the-counter desk launches and a vertiginous fall in crypto prices throughout 2018, cryptocurrency finance firm Circle announced that its OTC desk, Circle Trade, had a notional volume of $24 billion in 2018.According to the announcement made by the company in a Medium blog post, Circle completed 10,000 OTC trades, with around 600 distinct counterparties across 36 different crypto assets.
"The crypto winter is forcing companies to look for new opportunities and they're now realizing what we've known for years: OTC trading desks already play an integral role in crypto."
"We expect to see more desks come onboard as companies recognize the value of offering OTC. Additional desks are likely to be agency and bolted on top of existing crypto businesses, primarily exchanges. The essential difference between us and other OTC desks is we're able to more quickly meet a customer's need because we act in a principal capacity, meaning every counterparty faces Circle directly - we don't merely act as middlemen waiting to find a buyer or seller on the other side."
"We launched our OTC business as a complement to our exchange business because we found a lot of institutions were using OTC as an on-ramp for crypto trading."
The origins of Coinbase's OTC trading initiative began on June 6 when President and Chief Operating Officer Asiff Hirji commented that the acquisition of a regulatory license would help the company set off on "a path to offer future services that include crypto securities trading, margin and over-the-counter trading, and new market data products."
Huobi's OTC desk required to remove Alipay and WeChat payment methodsMajor Chinese digital payment providers Alipay and WeChat have reportedly sent legal letters to the crypto exchange Huobi requesting that the use of both their services and logos on the exchange's OTC trading desk is unauthorized.
Despite the OTC trend, some institutions remain waryAlthough established OTC desks such as Circle Trade are reportedly not experiencing any significant tapering of client interest, a December report from investment bank JPMorgan Chase found that the crypto winter is scaring off institutional investors.
As per the report, the index reached its "Lowest levels" since the launch of Bitcoin futures trading in December 2017.The report also documented the ongoing decrease in mining profitability associated with the decline of crypto markets.
Major Crypto Exchanges Launch OTC Desks Despite the Crypto Winter
Published on Feb 11, 2019
by Cointele | Published on Coinage
Mentioned in this article
Prominent Investor Thinks Bitcoin Will Hit $1 Trillion Valuation in Next Bull Market
Chris Burniske-former crypto lead at ARK Invest and a partner at Placeholder, a crypto venture capital partnership based in New York with $150 million in capital under management-believes the market cap of bitcoin will surpass $1 trillion during the next bull market.
Craig Wright Continues to Chase His Critics as Major Crypto Platforms Boycott His Cryptocurrency, BSV
One of the world's largest cryptocurrencies, decided to delist BSV amid Wright's campaign to deanonymize one of his critics, other major platforms - including ShapeShift and Kraken - followed suit.
Bitcoin Holds Over $5,300 as Top Altcoins See Mixed Signals
Saturday, April 20 - most of the top 20 cryptocurrencies are reporting slight gains and losses capped under 2% on the day to press time.
There's a new 'Coinbase effect'-the Binance Chain pump
Since its launch, Binance Chain has attracted coins away from competitors, pumping the value of coins that switch.