Institutional investors are investing in the cryptocurrency using OTC platform
Most experts underestimate the extent of penetration into the cryptocurrency market institutional investors. We tend to think that major players will come after the launch of a bitcoin ETF, but no – it’s already here.
Bobby Cho, head of the trade Department of the Chicago cryptocurrency company Cumberland (a branch of DRW Holdings LLC, a major operator on the market OTC trading), announced that hedge funds have replaced individual investors, making the largest transaction. We are talking about investing over $100 thousand
And here’s another new capturing. Miners no longer hoglet, hoping to sell assets at peak value. They create their own platform and start trading crypt.
“The market is becoming more professional, says Cho. – The days of the Wild West in cryptosphere came to an end.”
Research conducted by Digital Research Assets and TABB Group shows that in April 2018 day rate capacity over-the-counter market ranged from $250 million up to $30 billion This despite the fact that the daily turnover of kryptomere an average of $15 billion.
“We are seeing a threefold increase of the volume on our OTC platform, says Jeremy Blair, Executive Director of the Boston startup Circle. This is huge growth.”
Bearish trend affected the volume of the OTC market, but not as much as on a conventional crypto currency exchange, recorded a decline in turnover of up to 80% compared with peak values year to date. Therefore, institutional investors prefer the OTC platform services for stock trading.
“Volatility is the biggest claim to digital assets by big investors, says Cho. But in the last four to six months the market fluctuates in very narrow range and it seems to have affected the mood of traditional financial institutions: they began to come on the market.”
Large buyers and sellers prefer private transactions in OTC areas because the activity of traders on exchanges can cause sharp fluctuations in assets.
“If they sell coins, they do so through OTC,” says Tom Flake, the founder of Bcause, a supplier of equipment for mining, whose clients are institutional investors who are thousands of miners.
According to Sam the Doctor, managing Director at Fundstrat, one of the main reasons to buy the coins outside of exchanges, is that offer is often limited. In addition, buying assets directly from miners, investors receive the assets, which have not yet been in circulation. Travis Kling, the founder of the crypto-hedge Fund Ikigai Asset Management, says that such “virgin” assets are 20% more expensive: It is a guarantee that this crypt is not used for money laundering and illegal operations.