Bittrex is joining a growing number of cryptocurrency exchanges with its announcement to launch a trading desk for over the counter (OTC) business.
Earlier today, the company released a statement disclosing the launch of the service. OTC trading went live a couple of hours ago. Founded in 2014, Bittrex is a U.S. based cryptocurrency exchange founded by Bill Shihara and Richie Lai. Shihara – who also acts as CEO – commented on the development:
“With one of the most extensive selections of digital assets of any OTC desk available, 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.”
The service is being made available to ‘approved clients’ to facilitate quick and convenient trading of digital assets. Over 200 cryptocurrencies will be supported via the service. Bittrex say that they will guarantee pricing when it comes to major trades i.e. trades in excess of $250,000.
OTC trading differs from that carried out on cryptocurrency exchanges as direct trades are facilitated between a buyer and seller. With exchange trading, a buy and sell order are matched through an order book.
Shihara maintains that the company’s offering is a game changing trading option. For the industry, it would appear that OTC trading is quite important. It can add considerable liquidity to the industry. Furthermore, it is helping to draw in institutional investment as OTC trading is their preferred means of accessing cryptocurrencies and digital assets. This can be validated by way of Circle reporting that in 2018 they achieved $24 billion in OTC trading volume through their Circle Trade service. This was accounted for by way of 10,000 OTC trades involving almost 600 counterparties, across 36 distinct crypto-assets.
Further evidence still that institutional investors are moving towards OTC trading rather than exchange based trading was provided recently via a report by research company, Diar.
The report concludes that institutional investment is beginning to find its way into cryptocurrency with the anticipation of much more to follow this year. Greater liquidity is to be found in the OTC markets and institutional traders are starting to exploit that.
Coinbase also joined in on the OTC trading action, having established an OTC trading desk last November. At the time, Coinbase head of sales, Christine Sandler, confirmed that the company had taken that decision as it had established a trend which demonstrated that many institutions were using OTC trading as an on-ramp in accessing digital assets. In addition to the OTC trading facility, Coinbase also offer the same customer group access to its crypto custody solution.