Institutional investment is increasingly being seen every bit the future of crypto trading, with both Binance and Bittrex launching their own dedicated over-the-counter (OTC) desks in January. The desk launches come up after Morgan Stanley published a bullish study in November, showing a potent pattern of institutional investment for Bitcoin. The latest developments indicate that some of the world's largest exchanges are receiving increased demand from institutional investors, for whom OTC represents a lucrative opportunity. Cointelegraph takes a look at the latest launches and OTC news.

Binance launches defended OTC desk-bound

On Jan. 23, the number-one ranked cryptocurrency commutation Binance announced the launch of its over-the-counter (OTC) trading desk-bound in a blog postal service on its website. This new service, known as Binance OTC, will allow service users to acquit out transactions larger than the equivalent of twenty BTC ($69,552).

Officials explained the basic premise of the new service in a web log post:

"Our OTC desk allows Binance users to trade larger amounts of many cryptocurrencies listed on the commutation, with transactions being settled via their Binance accounts."

Equally per the post, officials as well hoped to draw potential customers to their service by promising trades of big quantities of dissimilar cryptocurrencies that will clear at the aforementioned price simultaneously. The weblog post as well sought to reassure prospective clients past calculation that trades are private due to the fact that guild books will not be touched. Service users volition likewise be able to employ directly settlements for OTC trades, without needing to utilize dissimilar wallet addresses.

The product launch comes on the back of potent gains being made by Binance Coin (BNB), which at present ranks as the 12th-largest coin by market capitalization. The company recently rebranded Trust Wallet as a multi-cryptocurrency wallet, calculation an boosted 14 blockchains.

Bittrex launches OTC desk later on increased client demand

Another visitor to recently launch an OTC desk is Us-based cryptocurrency exchange Bittrex. The firm will offering investors seeking to conduct larger trades the opportunity to merchandise the aforementioned 200 crypto assets available to users on its standard platform. Unlike users of the standard service, OTC investors volition accept to be able to commit to minimum trades of $250,000 or more than.

According to Bittrex CEO Nib Shihara, the launch of the desk is a result of increasing demand for an OTC service from its customer base of operations:

"This offer will be some other fashion for Bittrex to farther advance adoption of blockchain engineering worldwide, while besides providing our customers with cost certainty and a fast and easy way to merchandise big blocks of digital avails."

Bittrex Chief Strategy Officer Kiran Raj told Cointelegraph that the OTC launch is role of Bittrex's delivery to continually revise its services to conform its customers:

"We continuously evaluate and expand our offerings to give our customers a broad range of opportunities for participating in the blockchain industry, and our customers were interested in an OTC service with an all-encompassing pick of digital assets."

Regarding the ongoing crypto bear market place, Raj remained optimistic both well-nigh continued customer need and the possibility of staying adrift in an increasingly competitive marketplace:

"We keep to run into interest from investors at all levels, and we're expanding our offerings and services to come across the current and future need. Information technology really comes down to trust and our extensive selection of digital assets. Bittrex is known for our reliability, security and commitment to compliance, and past combining these cadre pillars, with our wide selection of innovative blockchain projects, we're providing customers a unique service that's tailored to their needs."

Circle leads the mode with OTC

Despite the abundance of recent over-the-counter desk-bound launches and a vertiginous fall in crypto prices throughout 2022, cryptocurrency finance business firm Circumvolve announced that its OTC desk, Circle Trade, had a notional volume of $24 billion in 2022.

According to the announcement made by the company in a Medium blog mail, Circumvolve completed 10,000 OTC trades, with around 600 distinct counterparties across 36 dissimilar crypto assets. Equally per the press release, the notional book equated to roughly $24 billion in notional volume.

In light of the group's increased growth and influence across the crypto market place, the house claims to have "get a cadre liquidity provider to the unabridged crypto ecosystem."

According to the visitor, Circumvolve is now partnered with more than one,000 institutional clients, such equally OTC desks, exchanges, asset managers, token projects and other global endowments. In the press release, Circle indicated that it expects positive growth for institutional adoption:

"This twelvemonth, we anticipate further incremental growth in institutional adoption catalyzed by stablecoin usage, advancements in institutional custody solutions, increasing regulatory clarity particularly in the [U.s.], and improvements and innovation in core crypto infrastructure."

Circle Trade's caput of trading, Dan Matuszewski, told Cointelegraph that the then-called crypto winter is backside the electric current tendency for new OTC desk-bound openings:

"The crypto winter is forcing companies to look for new opportunities and they're now realizing what we've known for years: OTC trading desks already play an integral function in crypto."

Despite the ongoing downward trend in the crypto markets, 2022 was a record year for Circle Merchandise. Matuszewski said that the company is building on this momentum in 2022:

"Concluding year, Circle Trade traded well-nigh $24 billion in notional volume and worked with more than 600 distinct counterparties, so we outset 2022 from a potent foundation and are seeing steady activity. We onboarded a record number of institutional investors in 2022 and oasis't seen involvement dim much relative to the overall trend in crypto markets. Institutional counterparties tend to be more than patient and work positions over larger time frames."

Matuszewski told Cointelegraph that, although he expects more than desk launches in the crypto customs, Circle Trade volition continue to stand out from the oversupply:

"We expect to see more than desks come onboard as companies recognize the value of offer OTC. Additional desks are probable to be agency and bolted on tiptop of existing crypto businesses, primarily exchanges. The essential difference between u.s.a. and other OTC desks is nosotros're able to more quickly come across a customer'southward need because we act in a principal capacity, meaning every counterparty faces Circle direct — nosotros don't merely deed as middlemen waiting to find a buyer or seller on the other side."

Coinbase Prime customers gain access to OTC

In late January, Coinbase announced that selected Prime number customers volition accept access to U.South. and European over-the-counter trading desks and Coinbase custody, a service that focuses on institutional investors and the storage of large amounts of cryptocurrency.

Launched in November, Coinbase's OTC desk permits customers to "execute large book trades with minimal price slippage." According to Christine Sandler, caput of sales at Coinbase, the decision to launch the desk stems from increasing need for OTC trading from institutional clients:

"We launched our OTC business as a complement to our exchange business because we plant a lot of institutions were using OTC as an on-ramp for crypto trading."

The origins of Coinbase'south OTC trading initiative began on June half-dozen when President and Chief Operating Officer Asiff Hirji commented that the acquisition of a regulatory license would assist the company set off on "a path to offer future services that include crypto securities trading, margin and over-the-counter (OTC) trading, and new market place data products."

In club to facilitate its transition into securities, Coinbase acquired the securities dealer Keystone Capital Corp., along with Venovate Market Inc. and Digital Wealth LLC in June.

Poloniex adds OTC service for institutional clients

U.Due south.-based cryptocurrency exchange Poloniex likewise jumped on the institutional bandwagon in Dec. Similarly to Coinbase, Poloniex is actively increasing the number of services it offers to customers. Institutional customers using dedicated accounts on Poloniex'due south OTC desk-bound volition be able to practice so, although the threshold for minimum trades is set at $250,000.

In a web log postal service, the company laid out its offer to institutional clients:

"Institutions large and pocket-sized can bask the benefits of our large curated selection of crypto asset trading pairs, dedicated support and robust API services. [...] Poloniex is focused on coming together the avant-garde trading needs of institutions."

Huobi's OTC desk required to remove Alipay and WeChat payment methods

Major Chinese digital payment providers Alipay and WeChat have reportedly sent legal letters to the crypto exchange Huobi requesting that the utilize of both their services and logos on the commutation's OTC trading desk is unauthorized.

The payment methods were available until early on February, however, Huobi still has an instructional article explaining how to link Alipay accounts published on its website.

Image source: Huobi

Huobi responded to the claims from the payment providers, claiming that the company has not received any cease-and-desist letters and stating that the logos represent a payment link. The house as well stressed that there is no official cooperation between the involved parties and confirmed that user transfers are peer-to-peer payments.

Both of the payment platforms have litigious pasts when it comes to cryptocurrency. Alipay began to tighten its regulations for OTC Bitcoin transactions in Baronial 2022, restricting accounts that used the organisation to transact Bitcoin OTC and establishing a monitoring arrangement for "key websites and accounts." WeChat blocked several accounts suspected of publishing initial coin offerings (ICO), along with the official sales channel of the Bitcoin mining behemoth Bitmain due to an alleged licence violation.

With an boilerplate daily trading volume of around $385 one thousand thousand, Huobi is ranked every bit the 11th largest global crypto exchange, according to information from CoinMarketCap.

Despite the OTC trend, some institutions remain wary

Although established OTC desks such as Circumvolve Merchandise are reportedly not experiencing any pregnant tapering of client interest, a Dec report from investment bank JPMorgan Chase found that the crypto winter is scaring off institutional investors.

Together with global market strategist Nikolaos Panigirtzoglou, analysts from JPMorgan reportedly found that the investment activity of institutional players in Bitcoin (BTC) "appears to be fading," noting that "key flow metrics have downshifted dramatically."

In detail, the study noted the decreasing amount of open up contracts on Bitcoin futures on the Chicago Lath Options Commutation (CBOE) global markets. As per the report, the alphabetize reached its "everyman levels" since the launch of Bitcoin futures trading in Dec 2022.

The written report too documented the ongoing decrease in mining profitability associated with the turn down of crypto markets. As a result of the dropping hash charge per unit, JPMorgan analysts reported that mining is no longer a profitable activity for many miners, resulting in a sell-off of equipment.

The JPMorgan inquiry likewise found that at that place has been a pregnant fall in average transaction size across the crypto market, dropping from $5,000 ane twelvemonth agone to beneath $160. Analysts too notation that altcoins are prone to suffer disproportionately during the "correction phase."

The findings of the JPMorgan report echo the views of CoinShares Chief Strategy Officer Meltem Demirors, who postulated that the crypto crash has its roots in institutions "taking money off the table."