Shhhhhhh! Can you keep a secret? Institutional investors (including some very large ones) are quietly getting into the cryptocurrency markets. Several research reports show that OTC (over the counter) trading volumes range from $250 million to $30 billion, a whole lot more than trading volumes on all crypto exchanges estimated at ‘only’ around $14 billion. Why the big spread? Well, that’s where the institutions trade large orders between themselves and it is generally a private transaction and not reported since it didn’t happen on an exchange. Oh yeah, it is totally legal and happens in all market sectors. FintekNews has written extensively on how the large institutions are coming into crypto in droves, and here is a good read on how they may be already here.
(Bill Taylor/Fintek Capital)
““At this point in time, because more and more institutions are beginning to enter the market, there’s more of an imbalance,” said Sam Doctor, Quant Strategist at Fundstrat, an independent research boutique.
Another research company, TABB Group, as well as the start-up Digital Assets Research, has further claimed earlier this year that Over the Counter (OTC) crypto trading volumes range from $250 million to $30 billion, at times considerably more than the trading volumes on crypto exchanges which currently stand at about $14 billion.
According to Bitcoin Magazine, the $5,000 report further says “institutional capital investment in cryptocurrencies from institutions currently waiting on the sidelines, including hedge funds and pensions, will likely go from a trickle to a torrent.”
Bloomberg argues the crypto OTC market is getting more mature with miners setting up their own trading desks, regularly liquidating cryptos rather than selling them off during bull runs.
“We’ve seen triple-digit growth enrolling in our OTC business. That’s a big growth area,” Jeremy Allaire, Circle’s CEO, said.
To avoid big movements either up or down, individuals that want to buy big amounts usually go to sellers directly. In Proof or Work coins, the biggest sellers are miners, which apparently currently command a 20% premium according to Travis Kling, founder of Ikigai, a hedge fund…”