One of the biggest companies in the cryptocurrency ecosystem is preparing to open an additional office in Chicago AND, oh by the way, have plans to launch OTC block trading in foreseeable future. It is to be noted that Coinbase hasn’t made any official announcements regarding the upcoming over the counter crypto trading desk as most of these developments and sources reporting the news are mostly third party.
In an attempt to attract more institutional clients, the new over-the-counter crypto exchange desk service will presumably be launched on GDAX, the trading platform’s more “professional” digial asset exchange. It currently ranks as the world’s ninth-largest cryptocurrency exchange, with an approximate daily trading volume of $315 million.
A block trade is a permissible, noncompetitive, privately negotiated transaction either at or exceeding an exchange determined minimum threshold quantity of shares, which is executed apart and away from the open outcry or electronic markets. Major broker-dealers often provide “block trading” services—sometimes known as “upstairs trading desks”—to their institutional clients. This feature is difficult for institutional traders to find within the crypto industry for a couple of reasons: first, a lack of liquidity, and second, the fact that large traders can cause substantial swings in coin valuation.
Last month, Gemini exchange headed by the much famous Winklevoss Twins started the block trading facility. Similarly, Circle – a Goldman Sachs-backed crypto trading desk started the facility of over-the-counter (OTC) orders for institutional investors with minimum Bitcoin orders starting from $500,000.
Coinbase has been in news recently for its rapid expansion in all possible domains. The company has also recently launched Coinbase Custody (a crypto storage service for firms wishing to store $10 million or more), a Coinbase Index Fund, and an Asset Management service. A couple of weeks ago, Coinbase announced that it was planning on adding support for ERC20 tokens, meaning the number of coins listed on the platform could expand significantly.