Over-the-counter trading in digital assets is rapidly gaining popularity with the crypto market players. ICOBox experts believe that the current excitement about OTC trading can be compared to the hype surrounding ICOs in late 2017 – first six months of 2018 and that it may easily trigger the new wave of investors’ interest in the crypto market.
To arrive at this conclusion, ICOBox researchers analyzed the current market situation. According to data collected by Digital Asset Research, the global daily bitcoin OTC trading value is about $250 million. Analysts from Tabb Group, however, put it at much more ambitious mark: around $12 billion[1]. This is 2-3 times more than the total trade volume of regular crypto exchanges.
“Even though these numbers are only estimates, they look quite plausible,” says Nick Evdokimov, prominent blockchain visionary, an expert in launching new IT startups, and founder of ICOBox. “The high demand for this service can also be seen from how actively this type of solution is being launched by the largest global crypto exchanges, such as Binance, Coinbase, Bittrex, etc. – despite the fact that OTC trading essentially takes business away from them.”
Evdokimov believes that this trend can be attributed to a couple of key factors. First, the users regularly have to deal with problems depositing or withdrawing fiat funds from their accounts. Second, crypto exchanges often do not have the necessary funds available, especially when the transaction involves a large amount of cryptocurrency. Over-the-counter trading allows a buyer to find a seller who has the entire desired amount at his disposal, negotiate in advance the minute details of the sale, including the final amount, and close the deal.
Evdokimov continues, “as the rates of main cryptocurrencies are starting to stabilize and the demand for them is going through the roof, the market is seeing the influx of major institutional investors, medium-sized businesses, and private, retail investors who have savings in various fiat currencies and are looking to diversify their holdings. And the first thing that interests them is OTC trading as an instrument of quick and secure cryptocurrency trading.”
He sees a lot of similarities between today’s keen interest in OTC cryptocurrency trading and the industry landscape in late 2017 – early 2018, when the market was burning with fever about Initial Coin Offerings. Only this time the situation is not so much about random companies dropping in on the crypto party on the wave of hype to make a quick buck, but about the involvement of serious players from other industries who are attracted to the crypto market both as a venue that can provide new sources of funding for their development and serve as an alternative means to preserve and grow their savings.
[1] https://www.forbes.com/sites/astanley/2018/10/23/uncharted-bitcoin-otc-markets-gear-up-for-institutional-inflows/#3e7a2a517bac