BitHumb Launches An Over-The-Counter (OTC) Crypto Trading Desk To Onboard Institutions
Breaking: BitHumb Launches An Over-The-Counter (OTC) Trading Platform
As some of our regular readers may already know, South Korea’s largest Bitcoin exchange by overall trade volume, Bithumb, has officially launched an all new OTC trading platform that is designed to allow institutional traders to buy/sell digital currencies in a highly streamlined fashion.
To elaborate further on the matter, it is worth noting that via an official announcement released yesterday, a spokesperson for Bithumb Global Limited stated that the new platform is designed exclusively for institutional clients and will operate under the name ‘Ortus’.
Is Institutional Demand For Digital Currencies On The Rise?
For the past 12-16 months, analysts all over the globe have gone on claiming that the OTC market is substantially bigger than the cryptocurrency exchange market. Additionally, it can also be seen that late last year, a report released by TABB Group revealed that Bitcoin’s OTC market was “at least two to three times bigger than the exchange market”.
In relation to the above stated data, well known crypto analyst Eric Wall was quoted as saying:
“Just read an estimate from the TABB Group (in a $5,000 report) that OTC crypto markets exceed exchange volumes by 2-3x. That would mean 1 to 1.5 million BTC is traded OTC daily. Strange it’s not visible on the blockchain, which shows a meager 100,000 a day.”
More On The Matter
Despite the ongoing bear market, the last 10-12 months have seen many of the largest cryptocurrency exchanges in the world trying to make inroads into the OTC market. For example, earlier this year, Binance announced its decision to launch an OTC trading desk. Similarly, a representative for Circle too announced that his firm had witnessed a “triple-digit growth” in its OTC business.
At this point in the article, it is also worth mentioning that most crypto-exchanges generate their revenue from transaction fees that are procured when a trade order is settled. Thus, if the demand for OTC trading is less, it is quite unlikely that established trading platforms will look to commit their resources for such purposes.
Lastly, on the subject of OTC trading, Rahul Khanna, the director of Ortus, recently went on record to state:
“Institutions trading digital assets need to open accounts at exchanges and OTC desks around the world; however, there is no real solution for an aggregated liquidity provider or a trusted interdealer where Institutions can trade these assets. To fill this market gap, Ortus will operate to allow institutions to buy and sell digital assets through a network of global liquidity providers and benefit from a competitive and best price execution service.”
In closing out this article, it is worth mentioning that in an interview with a respected media outlet, a spokesperson for BTCKorea.com, Bithumb’s parent company, said that Ortus is merely an independent entity that has obtained the rights to make use of Bithumb’s brand name for marketing reasons.
“Ortus does not have a direct relationship with Bithumb and the company does not intend to cooperate on the operation,[Ortus] is using the Bithumb brand as a partner company and as such, the company has nothing to add on the actual operation of the OTC trading platform.”
However, it is worth mentioning that in a previously released letter by Bithumb Global, the firm explicitly stated that Ortus was the brand name under which it’s OTC operations would be carried out.