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Set-up of OTC trade mechanism from leading cryptocurrency-exchange, Coinbase
Coinbase, the leading cryptocurrency exchanges in the world, has recently unveiled an over-the-counter (OTC) trading desk earlier in November. However, the rollout, was kept under wraps.
The firm, worth $8 billion and raised $300 million in its recent funding operation, has been pioneer to measure the rejoinder to the new offering from customers.
Tim Plakas, the chief of OTC trading desk for Coinbase, mentioned: We wanted to make sure we had all the boxes checked before we went public. We needed to have some of our trusted institutional clients on board and were in a beta mode to make sure that all the pipes were working.
Institutional buyers and whales are known to prefer OTC-based trades over the exchanges.
In fact, data reveals that while the trading volumes on the exchanges have dropped since January this year, the OTC trade volumes have grown. Coinbase has possibly taken the decision to enter the OTC market to compensate for the decline in volumes over its exchange.
While BTC ETFs would be the significant aspect that most likely to herald the inflow of institutional funds into crypto-avenues. While there may be abundant BTC to invest in.
For Bitcoin, the institutional money inflow in a fully legalized asset like an ETF would be an indication of authenticity. Some traditional finance firms have made forays into Bitcoin, but those were mostly small-scale test investments.
Hence, Kara Stein, the Commissioner of US SEC, recently sent the guidelines as to how the regulator is considering steps to oversee developments in the cryptocurrency industry, citing the establishment of the Strategic Hub for Innovation and FinTech space.
Amid these developments, institutional clients seem to be shrugging-off momentary obstacle and are choosing over-the-counter (OTC) markets instead of exchanges to enter the bitcoin space, as per the Forbesreport.
Since the supply of bitcoin is comparatively limited, and is open for trade at many exchanges but with some liquidity and regulatory hiccups, these exists the essentialities of some ideal players to be listed on OTC markets.
Currency Strength Index: FxWirePro's hourly BTC spot index is inching towards -32 levels which is bullish), while hourly USD spot index was at -99 (bearish), while articulating (at 07:26 GMT). For more details on the index, please refer below weblink: