While OTC and dark pool trading is not that well known in the crypto world, it is an area that has become quite popular with institutions. There is a growing liking for BTC especially.
Recently, data from a major crypto-based OTC desk has helped to buttress this fact. This makes it quite clear that capital enters the crypto through other means apart from spot exchanges.
Crypto OTC is Growing despite the BTC Plunge
Genesis Trading, a service provider branch of the Digital Currency Group, recently revealed their year-end report to its clients via an email. According to The Block, an upcoming news site, which managed to get hold of the message, Genesis claimed their OTC offering grew quite large in the past year.
In the email, it was claimed that Genesis saw a 50% increase in the OTC volumes. However, they did not give specific figures. However, by checking Genesis’s public figures, it can be assumed that the OTC arm is handling hundreds of millions of dollars in BTC transactions. The statistic was confirmed by a person calling themselves “I am Nomad” on Twitter.
Other Related Data
News by Genesis comes a week after Circle, a fintech backed by Goldman Sachs, released similar figures. In a review style report, the company, with headquarters in Boston, wrote that while 2018 was full of upheaval, the company saw major growth. The company apparently managed to execute 10,000 trades, which were issued by over 600 institutional investors.
The transactions were valued at over $24 billion and they covered 36 crypto assets, which include ETH and BTC. They were also involved with some fiat currencies. In an interview with Bloomberg before the release, the CEO of the fintench claimed they had seen triple digital growth in 2018.
In other news, Binance and Coinbase, the two largest exchanges, have said they plan to launch non-spots trades through OTC desks. Thus, OTC desks in crypto will likely continue to see major growth while remaining relatively obscure from the crypto community.
More The Block News on Crypto
In another story on The Block, they claimed that OTC traders who were mainly from Wall Street, high net worth people, and crypto funds, had started to feel bullish on crypto and BTC. In fact, a digital asset trading arm of DRW, Cumberland, recently claimed on Twitter that its OTC buys grew by 60% last week.
year end report came out for genesis. they are reporting OTC volume up over 50% year over year , originated over 1 billion in loans and borrow and are NYDFS complaint (ie bitlicense)… thats pretty impressive.
— I am Nomad (@IamNomad) January 10, 2019
In the tweet, it was claimed that while OTC traders were usually balanced between buy and sell, the counterparties were leaning more towards buy, especially for BTC. The CEO of Genesis recently expressed similar sentiments. The CEO claimed that in Q4 2018, the investors sold crypto for taxation purpose. However, in 2019 they were doing the opposite.
Across the board, desks similar to Cumberland and Genesis have reported clients are doing more buying. It seems that 2019 might be the year of the Bull Run. This newfound optimism comes after a year when there were many sell-side moves. Not everyone is so optimistic, Murad Magmudov, a cryptoanalyst, claims that BTC could fall to as low as $2,400.