Image source: pixabay - sharonang
Institutional investors are no longer sitting idle while Bitcoin ETFs get their overdue approval by the SEC. Recent market stabilization for cryptocurrencies also helped spur institutions to enter the emerging market.
Recent Over-the-counter (OTC) trade data shows institutional investors now dominate Bitcoin markets with high volume trades. According to Bloomberg, Bobby Cho, global head of trading at Cumberland which is a Chicago-based cryptocurrency trading unit of DRW Holdings LLC that handles the over-the-counter purchases:
"Institutional buyers such as hedge funds have replaced high-net-worth individuals and have claimed the top spot as biggest buyers of digital coins. These large chunks of cryptocurrencies that these institutions are would be worth more than $100,000 through private transactions."
Source: coingape - Nilesh Maurya
Image source: pixabay - Pexels
OTC trading is a form of trading that uses a middleman/broker to perform trades, especially for larger trades. Brokers can quote their customers with exact prices, and hence preventing price differences that may affect trading outcomes.
Institutional investors have a higher level of security when performing large trades via brokers. Even though there is no lowered risks as compared to Bitcoin ETFs, OTC is currently the 'safest' form of trading.
According to ShapeShift’s Coincap.io the daily trading volume of Bitcoin is around $2.7 billion (after correcting for inflated volumes and bot trading). Source: newsbtc - Joseph Young. Larger trade often face liquidity issues and hence institutional investors are encouraged to trade via custodian platforms.
Image source: pixabay - skeeze
According to Cho, high net-worth individuals and institutions are using the OTC market to process trades that exceed $100,000, which based on the current price of Bitcoin at $6,500 is around 15.38 BTC.
“What that’s showing you is the professionalization that’s happening across the board in this space. The Wild West days of crypto are really turning the corner,” Cho said.
Source: newsbtc - Joseph Young
What could further spur the buying frenzy by institutional investors would be the launch of Bakkt next month, as earlier reported: https://steemit.com/bitcoin/@tysler/regulations-bringing-stability-to-cryptocurrency
Meanwhile, we are looking forward to updates for Bitcoin ETFs that may or may not hit the market in 2019.
