Newest Diar Report Shows Significant Shift into OTC Bitcoin Markets by Traditional Investors
OTC physical Bitcoin(BTC) markets having higher liquidity have recently gained preference from institutional investors, as per an analysis published by the Research firm Diar published Dec. 17.
According to the Diar report,there is a growing appetite for investment in OTC funds like the ones offered by Coinbase a leading American crypto exchange. Though OTC trade volumes are dwarfed by non -OTC investments, the significance lies in that OTC markets are open for only 31% of annual tradeable hours. In terms of BTC trade volume on OTC markets , the Grayscale’s Bitcoin Investment Trust (GBTC) was outperformed by Coinbase.
As reported,previously, GBTC is now a holder of nearly 203,000 BTC. being 1% of Bitcoin’s circulation. This is due in part of net inflows of $216 million into Grayscale’s Bitcoin investment Trust, over a 9 monthly period in 2018.
In 2018, OTC market hours accounted for a 20% increase for Coinbase in BTC trading volumes ,as compared to GBTC which accounted for a 35 percent drop in volumes as compared to the 9 monthly period in 2017.
“ Diar’s report explains that with continuous trading, traders and high net worth stake holders would require 24 hrs. Access and cushioning from shocks in a highly volatile market, inspite of historic lows in 2018. On the reverse, the uncertainties of the market may act as a hurdle and push the institutions to increase man power for open markets.”
Hodl Hodl a virtual currency exchange which also provides an OTC desk service, reportedly said that large order requests have increased exponentially in 2018 “doubling month-on-month.” “It's quite harder than usual to find a seller at current prices,” stated Max Keiudn CEO of Hodl Hodl.
With Coinbase launching OTC trading in late November to cater to increased demand for OTC crypto trading from institutional customers. A huge benefit for customers is that the exchange is actively considering offering both exchange and OTC business, reports Cointelegraphy.