A research firm Diar, in a report that they published recently, noted that traditional and institutional investors in the cryptocurrency market prefer over the counter Bitcoin markets to the exchanges. Because of this, the OTC Bitcoin markets have higher liquidity.
Particularly the research noticed a rise in the Coinbase exchange. As per the report, Coinbase’s OTC Bitcoin market outdid Greyscale in Bitcoin trading volumes. However, with that being said, OTC sales are minuscule in comparison to the non-OTC trades. Even so, OTC sales are quite significant as they only open and function for a little over one-quarter of the annual trade hours.
Diar is a research firm that focuses on analysing digital assets and trends for institutional investors and traditional financial companies. Their report states that for traditional investors, OTC markets are more popular because of their immediate reach into the market, despite the low number of active hours that they have in comparison to other exchanges and platforms.
The report further divulged into Greyscale’s Bitcoin Investment Trust and discussed how the company now owns quite a significant portion of the current circulation of Bitcoin. Grayscale controls and owns 1% of the circulating supply of the Bitcoin, since the large influx into its Bitcoin Investment Trust during the better half of 2018. Grayscale Bitcoin Investment Trust, according to numbers released by them, own 203,000 BTC.
With the market in one of its extreme bears, there aren’t many people willing to sell at such grave losses right now. However, it has been noted by many exchanges across the globe that there are large orders for buy-ins right now. The CEO of HodlHodl was quoted saying, “It’s quite harder than usual to find a seller at current prices”. Incidentally, HodlHodl also runs an OTC Bitcoin service for traditional and institutional investors.
Most OTC Bitcoin sales started last year, right before the bull of 2017 and have proven to be very popular amongst traders. Even though the hours of activity in comparison to a traditional exchange do not match up, there is a dire need for them in the market right now. OTC Bitcoin markets are very useful and promote the entry of many new players as well. And Dair’s recent report further confirms just that.
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