Largest OTC Cryptocurrency Trading Platform Hits Record High as Bitcoin Price Rises

This article is from The Block, author: Frank Chaparro

Translator: Yu Shunsui Odaily Planet Daily

summary:

• Cryptocurrency OTC platforms are seeing record trading volumes.

• Galaxy Digital and Genesis say new institutions are driving the rally.

• According to Galaxy, “the risks are rising.”

• What Genesis is seeing is “many more buyers than sellers.”

Bitcoin prices continue to rise, and the market's largest over-the-counter trading platform is also keeping up with the trend.

During the 2017 boom, as Bitcoin surged to nearly $20,000, trading firms such as Genesis Global Trading and B2C2 saw tens of millions of dollars in trades. The recent rally has some similarities to that period, with multiple exchanges reporting volumes that are even higher than the previous cycle.

Genesis’s OTC volumes are more than six times what they were at their 2017 peak. Since 2017, cryptocurrency traders have moved from Skype and Telegram to electronic trading interfaces. At the same time, more institutions have entered the OTC market, which Genesis says is driving the current rally.

Its chief executive, Michael Moro, said the firm was “seeing significantly more buying from institutional investors than we saw in 2017”.

Moro added, “Genesis Spot saw continued institutional BTC spot and call option buying as the Thanksgiving morning sell-off provided a good opportunity to average into a long position.”

Last week, Genesis hit a record high in spot trading volume of $600 million. Genesis said new institutions such as family offices and passive funds helped drive the volume growth. Mike Novogratz's company Galaxy Digital has a similar situation, and the company also operates an over-the-counter trading desk. Galaxy was not active in the 2017 cycle, but is currently setting records for its own trading volume - a trend also driven by new institutions.

Its head of trading, Tim Plakas, said, “The flow of funds through our trading desk shows that new and larger institutional investors are currently driving the market, especially in terms of BTC. More crypto-native participants are still active, but are definitely more focused on the ETH/DeFi field, and their core positions in BTC are already in place.”

“In typical crypto fashion, we had a weekend round trip during the long US holiday. BTC is back above $19,000 and ETH is back above $600, up 16% and 25% respectively from recent lows,” the firm’s trading desk said in a note to counterparties.

As for what comes next, both Genesis and Galaxy are preparing for a potentially sustained rally.

“As we said in our Nov. 26 commentary, we are constructive even on the dip as our counterparties are not panic selling,” Plakas said. “A pullback will occur after a massive rally, but we see overall risk as rising.”

As for Genesis, the message is simple — as they say, “There are a lot more buyers than sellers.”