Over-the-Counter Trading as the Latest Battleground to Secure Institutional Investment

With the increasing trend for major financial institutions to invest in Bitcoin, United States crypto exchange and wallet provider Coinbase announced the launch of over-the-counter trading for institutional customers on Nov. 27.OTC trading allows investors to carry out direct trades with each other.

Coinbase's latest trading initiative began on June 6, when President and COO Asiff Hirji explained that obtaining a regulatory license would enable the company to 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."

As previously reported by Cointelegraph, institutional customers looking to use Poloniex's dedicated accounts will be able to do so, subject to a minimum trade of $250,000.

"Institutions large and small can enjoy the benefits of [a] large curated selection of crypto asset trading pairs, dedicated support and robust API services. Poloniex is focused on meeting the advanced trading needs of institutions."

The MVIS Bitcoin U.S. OTC Spot Index draws on feeds from major OTC liquidity providers, including Circle Trade, Genesis Trading and Cumberland.

"The index may pave the way for institutionally oriented products, such as ETFs as well as provide further tools to institutional investors to execute institutional[-]size trades at transparent prices on the OTC markets."

Along with the new classification of Bitcoin as an institutional investment class, the institutional trend is also spreading out into the benefits of OTC trading.

Bloomberg reported how institutional investors replaced high-networth players as the biggest buyers of cryptocurrency transactions over $100,000 and how the possibility to conduct OTC trades has drawn in hedge funds, injecting huge amounts of capital into the market.

According to findings from Digital Assets Research and TABB Group, the OTC market brought in between $250 million to $30 billion in trades per day in April.

Improvements in trading through exchanges are being made.