Circle handled $24 billion worth of cryptocurrency through its Over the Counter (OTC) trading desk in 2018, as reported by an official Median blog post on January 3. This is a huge number, especially because OTC trading volumes are not reported publicly. In addition, there have been growing discussions about institutional investor activity over crypto OTC desks.
According to reports, the US-based fintech claims to have handled more than 10,000 trades last year, with 600 counterparties spanning over 36 assets. Circle also claims that they have formed partnerships with more than 1000 institutional clients such as token projects, exchanges, asset managers, OTC desks and other global endowments.
Circle stated that their trade continued to expand despite an unstable year for the crypto industry. Circle writes that they have set a new record number of new institutional clients and they have grown their operations to 24/7 with coverage in Europe, the United States and Asia.
The company hopes to increase their operation further this year. Circle stated:
“This year, we anticipate a further incremental growth in institutional adoption catalysed by stablecoin usage, and advancements in institutional custody solutions. we also expect an increasing regulatory clarity particularly in the [United States], and improvements and innovation in core crypto infrastructure.”
OTC trade allows investors to carry out trading directly with one another with the need of an intermediary such as exchanges. Reportedly, institutional investors have shifted to higher liquidity OTC Bitcoin markets. Investment is growing in OTC funds, like for instance the one offered by Coinbase in November, that launched OTC trading for institutional customers.
Currently, Circle is leading in the OTC market. Coinbase follows in second, and Grayscale’s Bitcoin Investment Trust (GBTC) follows in third for BTC trade volume. Even though OTC trade volumes are not as significant as non-OTC investments, the OTC markets are open for 31 percent of annual tradable hours. Many companies are joining the OTC space with players like MV Index Solutions, a subsidiary of VanEck, joining last year.
In addition to the OTC operations, Circle has had a busy year with regards to crypto operations. In spring, Circle acquired Poloniex, one of the earliest crypto exchanges. The company also introduced the Circle Asset Framework, which provides guidelines for reviewing assets within Circles products.
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