OTC trade volumes on Kraken and other crypto exchanges have increased by 220% YoY.
The quantities of current trades are comparable to those witnessed in 2021.
The results of the election, according to leading crypto trading firms, have been a major reason for the dramatic rise in over-the-counter trading volumes throughout the last few months. Head of institutional at crypto exchange Kraken Tim Ogilvie told The Block, “Long story short, OTC is going gangbusters right now.” He went on to say that prices are up, but volume is considerably up as well.
According to Ogilvie, over-the-counter (OTC) trade volumes on Kraken and other crypto exchanges have increased by 220% year-over-year.
US Election Effect
According to Jake Ostrovskis, an over-the-counter trader at market-making business Wintermute, the market remained relatively calm over the middle of the year. However, as we approached the election, prices began to rise, and market players sought to position themselves for the outcome. He brought up the fact that Wintermute had been in talks with certain customers about onboarding for years; they saw the election as a sign that they could finally begin trading after all.
Trader Embert Lin of market-making firm GSR reported a significant uptick in business activity after the election. He stated that projects and investors are taking a more proactive approach to managing their funds and risk in light of the recent price increase in Bitcoin and other cryptocurrencies. Many organizations are on the lookout for alternatives to Bitcoin and Ethereum, as well as new chances to diversify their exposure.
A trader at one OTC firm noticed that the quantities of current trades are comparable to those witnessed in 2021. When interest in cryptocurrencies peaked. Cryptocurrency custodian BitGo, which began operations in 2013, silently established an over-the-counter trading desk in the first half of 2024. In order to take advantage of the surge in volumes after the ETF approvals. The election, according to BitGo’s Go Network chief Brett Reeves, was a major factor in the recent volumes. Accounting for two-thirds of the company’s volumes in the previous three months.
Reeves emphasized the importance of the United States as the world’s biggest market, highlighting their possible favorability towards this. Over-the-counter desks have also seen that customers are becoming more adventurous, testing the waters with a wider variety of cryptocurrencies—given they have enough cash on hand, of course.
It’s likely that everyone on the desk shares the opinion that increased risk-taking is welcome. We can look at it from two angles. One is spending money, but it’s also evident when individuals move away from risky investments. Bitcoin is where it all begins. Now it’s on Ethereum. According to Ogilvie, it shifts to Solana, and maybe they begin to venture into other cryptocurrencies. Solana, he said, is a risk asset that has been seeing increased trading activity over the last few months.
The increased demand, according to BitGo’s Reeves, will continue far into the new year, especially for Ethereum and Bitcoin. Although there is still greater volatility in the exchange markets than in conventional finance, he added that OTC transactions have decreased some of it.
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