Institutional investors have long been labelled as the prophecy for bitcoin acceptance. Once these moguls would get their hands on crypto, the market would go moon. The market’s bull run collapsed this year, but that doesn’t mean that investors are staying away from the product. According to Bloomberg most institutional investors now trader over the counter (OTC).
The OTC market is a growing business for crypto. Investors would prefer this method because trades done in this space don’t influence the price on exchanges. “We’ve seen triple-digit growth enrolling in our OTC business,” said Jeremy Allaire, CEO of Circle Internet Financial to Bloomberg. Bitcoin being in a comfort zone between $6000 and $6500 also helps for investors to make the decision to jump in.
The biggest sellers in the crypto space are the miners. Their computers confirm transactions, and get rewarded with coins. We call this Proof-of-Work (PoW), also known as mining. But these miners are getting smarter as well. Selling huge amount of coins can be very tricky in a market that’s so volatile. That’s why many miners are now have their own selling teams for the OTC market.
Researchers from Digital Assets Research concluded that over-the-counter trading resulted in $250 million to $30 billion in trades per day in April 2018. To put this into perspective, online exchanges are good for approximately 14.2 billion dollar in trade per day, according to statistics from CoinMarketCap.