Both Binance and Bittrex launched their own dedicated over-the-counter (OTC) desks in January largely because institutional investment is increasingly being seen as the future of crypto trading and Morgan Stanley published a strongly positive report regarding institutional investment trends.
According to Cointelegraph, major exchanges are seeing increased demand from institutional investors, for whom OTC represents a lucrative opportunity and it has analysed what is happening in the OTC sector.
Binance launched its OTC service on 23rd January and it will allow service users to carry out transactions larger than the equivalent of 20 BTC ($69,552). The exchange also hoped to “draw potential customers to their service by promising trades of large quantities of different cryptocurrencies that will clear at the same price simultaneously,” according to its statement.
US-based Bittrex exchange also launched an OTC after a rise in institutional demand. he firm will offer investors seeking to conduct larger trades the opportunity to trade the same 200 crypto assets available to users on its standard platform and they will have to commit to a minimum trade of $250,000. The exchange’s CEO said, “This offering will be another way for Bittrex to further advance adoption of blockchain technology worldwide, while also providing our customers with price certainty and a fast and easy way to trade large blocks of digital assets.”
Circle also has an OTC desk that it opened in 2018. Called Circle Trade, it had a notional volume of $24 billion in 2018. This equates to 10,000 OTC trades completed, with around 600 distinct counterparties across 36 different crypto assets. According to the company, Circle is now partnered with more than 1,000 institutional clients, such as OTC desks, exchanges, asset managers, token projects and other global endowments.
Coinbase is also active in OTC. In January it announced that some of its selct Prime customers would have access to US and European over-the-counter trading desks and Coinbase custody. Coinbase’s OTC desk permits customers to “execute large volume trades with minimal price slippage,” the business said.
Others including Poloniex and Huobi also have an OTC service. None of these exchanges appear to have seen a downturn in business despite the so-called ‘crypto winter’ and negative reports by JP Morgan about the level of institutional interest in crypto. CoinShares Chief Strategy Officer Meltem Demirors, a prominent crypto guru, echoes the JP Morgam view, as she believes that the market decline is rooted in institutions “taking money off the table.”