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Comprehensive intuitions of OTC Setup versus Exchange-based Trading of Cryptocurrencies

Before diving into the core part of this write-up, let’s just glance through speculative outlook of crypto-universe.

When venture capitalists eyes on gambling on Cryptocurrencies, speculators would also be wise enough to assume that the handsome yields are about to arrive on the scene. What is imperative during such circumstance is that how will it get there? Last year, the world’s total wealth was estimated to be US$280 trillion. The entire crypto market cap as of 7th January 2017 was roughly around US$17 billion.

What’s luring across modern-day financial markets: While Bitcoin whales are considered to be the pioneers in bitcoin trading who have minted huge money of millions together in cryptocurrency. Whales can also be regarded as the high-net-worth individuals who follow active (aggressive) strategy have lately realized that the Cryptocurrency Avenue as the latest money making source, or major institutional investors such as hedge funds and proprietary trading desks who are also actively participating with calculative bets on where the market will move next.

Institutional investors have to abide by stringent regulatory compliance. Thus, trading into such speculative crypto assets on relatively insecure (and often overseas) exchanges is perceived as a risky venture that not everyone is prepared to take up. Instead, institutional investors head towards recognized OTC brokerage firms to execute their trades.

While Brokers play their role as an intermediary, and before a trade is executed, they ensure the KYC norms of all trading counterparties. This, in turn, radically moderates the probabilities of fraudulent acts or sinking victim to a scam.

Besides, most importantly, parking of money is not needed on third-party accounts to execute their trades. This effectively negates the potential for a loss of funds because of a hack. In fact, an OTC broker who decided to remain anonymous told Reuters: “When the big exchange hacks happen we tend to see the business go up.”

Ultimately, OTC trading enables institutional and other HNI investors with attractive pricing than they would on exchanges drives the price of bitcoin to move when they are detected in the order books.

Despite bearish trend is observed in the short-run, the Bitcoin OTC market is well positioned in its uptrend in the long-run as the considerable number of institutional investors who are watching out for the similar services in contemporary FinTech markets as they used to get in the past years when they are accessing the crypto market.

Currency Strength Index: FxWirePro's hourly BTC spot index is inching towards -84 levels (which is bearish). Hourly USD spot index was at shy above 1 (absolutely neutral ahead of Fed’s monetary policy) while articulating at 13:09 GMT.

For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex

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