Traditional Investors Are Shifting to Over-The-Counter Bitcoin Markets, Suggests Research

Bitcoin News: A recent analysis by the research firm Diar has illustrated that institutional investors are shifting towards higher liquidity over-the-counter (OTC) physical Bitcoin (BTC) markets.

Published on Dec. 17, the report notes that the investments in the OTC funds like that offered by Coinbase, a major American cryptocurrency exchange, has observed a marginal growth. The report states that Coinbase outperformed Grayscale’s Bitcoin Investment Trust (GBTC) on OTC markets in terms of BTC trade volume.

Though OTC trade volumes are dwarfed by non-OTC investment, the volumes are still significant as OTC markets are only open for 31 % of annual tradable hours. In the first three quarters of 2018, Grayscale reportedly registered $216 million in net inflows into its Bitcoin Investment Trust. The platform gained over 1% of Bitcoin’s circulating supply, now holding over 203,000 BTC.

Coinbase reportedly saw a 20 % increase in BTC trading volume during OTC markets hours in 2018. Whereas, GBTC saw a 35 % drop in volumes compared with the same period in 2017. The report further elaborates:

“With no time stop on trading, institutions and big money would require access around the clock from fears of a rude awakening in a market that remains highly volatile, despite that decreasing to new lows this year. On the flip side, this may also be a hurdle for institutions that would require amped up manpower to decide to open-risk.” 

Another OTC desk service, virtual currency exchange HodlHodl’s CEO Max Keidun, added that an exponential increase in the large order requests has been recorded in 2018, “doubling month-on-month.” Keidun noted:

“It’s quite harder than usual to find a seller at current prices.“

Read more: Bitcoin Price Crosses $3500, Jumping More Than 10% On The One Year Anniversary Of $19,000