Dark pools have significantly shifted the dynamics of the stock market. Dark pools are privately held pools for trading non-regulated securities which are unavailable to the general investing public. Essentially, dark pools were designed to facilitate private investor block trading. The thing about dark pools are they aren't immediately transparent when a transaction occurs. Meaning that buy or sell order isn't immediately visual on the level 2.
The crypto over the counter (OTC) market works very similar to the dark pools on the stock market. When the Smart Money is buying large blocks of bitcoins, they use the OTC market as to not drastically impact the price of bitcoin. Their goal is when they buy or sell to remain invisible, if possible.
Institution-focused Coinbase Pro exchange registered an outflow of over 35,000 bitcoin (BTC, -0.83%) worth more than $1 billion early Saturday, according to data source CryptoQuant.
The large outflow comes a day after 12,063 coins left the exchange and represents institutional FOMO (Fear Of Missing Out) buying, according to Ki Young Ju, CEO of the Korea-based blockchain analytics firm CryptoQuant.
Massive outflows from Coinbase Pro usually end in Coinbase's cold wallets for custody, which is directly integrated with the exchange's over-the-counter (OTC) desk. Institutions typically transact over-the-counter in a bid to avoid influencing the spot market price
We also got word that a Singapore hedge fund, Three Arrows Capital bought some $1.3 billion worth of stock traded bitcoin through, of course, Grayscale.
Despite Bitcoin falling 20% on Monday, of course the Smart Money was there to pick up the pieces at that ugly looking daily demand at the $28,000 level.
Rest assure all dips will be bought in 2021 as the Smart Money FOMO is real.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.