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Uppish Momentum, Increasing OTC Volumes

Earlier today, a huge sell order for 7425 was placed at a price that is $200-400 below the rest of the market. The entire order got filled temporarily pushing the price of bitcoin down by about $400 in a matter of seconds, however, the bullish momentum quickly pushed the prices back up to the $12300 range. It is surprising that a large order of such size has been placed through an exchange as these kind of orders often get unfavorable execution on exchanges as the order size inevitably moves prices against the interests of the seller/buyer. 

OTC trading in crypto is seeing an increase in interest from traditional crypto exchanges which are looking to add businesses such as margin trading, futures trading and OTC trades to their suite of trading services. Over the past few months, we have witnessed leading centralized crypto exchanges such as Huobi, Binance and Coincheck launch OTC trading services as they aim to capture value in the crypto OTC market, where the trading volumes are 2-3x more than those on centralized exchanges. The strong demand for trading crypto OTC can be partly attributable to the regulatory uncertainty over cryptocurrencies in multiple jurisdictions and the lack of real depth in liquidity on traditional exchanges, causing users to flock towards OTC trading which provides more anonymity and less price slippage.  

Crypto Twitter Pick

What We’re Reading / Listening To

Full Reserve Banking with Bitcoin by Tamas Blummer
Base Layer – Tom Jessop (Fidelity Digital Assets)

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