As per the reports from the Medium blog post, in 2018 the cryptocurrency finance firm ‘Circle’ has executed 24 Billion Dollars, reported the OTC (over the counter) trading desk at the firm. The company claims that it has become the core provider of liquidity to the whole crypto ecosystem.
The reports from the Cointelegraph say that the firm has partnered with more than 1000 institutional clients. They include various ‘exchanges, token projects, OTC desks, asset managers and other global endowments.’ In the press release, Circle said-
“This year, we anticipate further incremental growth in institutional adoption catalyzed by stablecoin usage, advancements in institutional custody solutions, increasing regulatory clarity particularly in the United States, and improvements and innovation in the core crypto infrastructure.”
The process of OTC trading gives the power in the hands of investors. As per the OTC trading structure, an investor can perform trades directly with another trader independent of relying on any middle catalyst such as any cryptocurrency exchange. OTC trading supports particularly those institutional investors who make use of OTC desks extensively. Some examples are Coinbase and Circle.
There is a major shift in the institutional investors as a whole to a higher liquidity OTC Bitcoin (BTC) markets. For instance, Coinbase launched OTC trading for institutional customers in November last year, as per the reports from the Cointelegraph. Coinbase has also surpassed GrayScale’s Bitcoin Investment Trust (GBTC) in performance when it comes to BTC Trade volume in the OTC markets. On one hand where the OTC trade volumes are affected by the non-OTC investments, on the other hand, the volume is still of great importance as the OTC markets are only open for 31 percent on annual permitted trading time.
The subsidiary of VanEck (where MVIS indices are developed, monitored and licensed)- MV Index Solutions, has also joined the OTC club, after launching its Bitcoin index based on three major OTC desks in November last year. The head of the sales at Coinbase, Christine Sandler said that the move is made in answer to the high demands for OTC crypto trading from the institutional investors. It would be a good way to take care of both exchange and OTC businesses. He said that these services would be further joined with Coinbase Custody. This service from Coinbase is a cryptocurrency custody service tool which is designed for the institutional investors. Coinbase launched it in July last year. Sandler further added-
“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.”