Key highlights:
- Cryptocurrency OTC trading desks are recording increased trading volumes as Bitcoin’s bull run continues
- OTC (over the counter) trades are conducted directly between two parties and often involve large amounts of cryptocurrency
- Institutions are participating in the cryptocurrency market at an increased rate
OTC Bitcoin trading volumes increase as institutions step in
The position of Bitcoin is now arguably more bullish than ever before, and its price is rising rapidly. The biggest over-the-counter (OTC) trading desks are also riding this wave, and are reporting increased trading volumes. It’s not the first time that we experience this phenomenon – during the 2017 bull-run, major OTC trading desks like Genesis Global Trading and B2C2 also reported a volume increase and big trade sizes. BTC’s recent bullish market shows many similarities to that period, and current volumes are even larger than what we saw in the 2017 rally.
Over-the-counter or OTC trading indicates off-exchange trading. In this process, participants trade directly with one another. This kind of trade doesn’t occur via a formal exchange, and usually involves large quantities of cryptocurrency. One of the main reasons why large trades are performed through OTC desks is to avoid influencing the markets.
According to the Genesis OTC trading desk, many institutions have joined the OTC market for cryptocurrencies, and they are leading the current bullish momomentum. Genesis says OTC volumes are more than six times bigger than during the peak of the 2017 bull run. Michael Moro, the CEO of Genesis, discussed institutional purchases, and says the buys are larger than in 2017.
Moro pointed to Thanksgiving as a great opportunity for crypto traders, and commented about continued buying after the sell-off. Genesis reportedly broke its own record last week, hitting $600 million in trading volumes. According to Genesis, new institutions are responsible for the volume increase.
Galaxy Digital is another prominent OTC trading desk. This trading desk was not present in 2017, but it is also posting new records and reporting an unprecedented increase in trading volume. According to Galaxy, the recent rise is driven by large institutional players. Galaxy believes crypto-native traders are mostly participating in the DeFi space at the moment, and they can’t be the driving force for the recent increases in OTC volumes.
Even cryptocurrency exchanges experienced a surge in trading volume. According to The Block, overall cryptocurrency trading volumes reached a whopping $289 billion in November.
Genesis and Galaxy are making arrangements for the next month, and they hope the rising trend continues. These platforms reported more buyers than sellers – therefore, the sentiments are still bullish, and OTC markets should be prepared for a sustained rally. This rally has the potential to be much stronger than the 2017 bull run because a greater number of institutions is now involved in the cryptocurrency markets.
Bitcoin is currently enjoying very positive sentiment, and BTC is being considered more seriously as an investment that can help protect against the devaluation of fiat currencies. While most institutions would previously never have considered making BTC a part of their investment portfolio, Bitcoin is now being taken seriously by the largest players in the traditional investing world.
