After the 2017 hype, the crypto markets are still on the bottom. As always after such boom-bust cycles, the surviving providers are using the time to prepare for further growth. This also applies to the online wallet and crypto exchange pioneer CoinBase.
According to Bitcoin Magazine, US digital asset platform Coinbase has launched an Over-the-Counter (OTC) trading desk for institutional investors, live-streaming site Cheddar reports. The company positions its new OTC trading services as a compliment to the exchange business. OTC is seen as an onramp for institutions for crypto-trading.
Besides CoinBase, companies such as Circle, Genesis Trading, itBit, and others offer OTC trading services for professional traders and institutions. When compared to these competitors, Coinbase sees its advantage in its exchange business. While other such as Circle need counterparties or are a counterparty to match a transaction, Coinbase will be able to directly match client orders. We are talking about big volumes here. Circle, for example, makes a volume up to $2 billion per month in OTC trades with a minimum volume of S250,000.
For institutional traders such as banks, who typically make large-scale transactions, OTC offers a way to trade without affecting to turn to exchanges. They can deal directly with the OTC broker and agree on prices. In general, dealing wiht OTC traders gives you more flexibility. In many cases we saw, large buyers are able to get discounts to the exchange price in large transaction. Moreover, we also saw OTC trades with wallets instead of cryptocurrencies which are sort of off-blockchain trades technically.