Recently, the trading volume of the over-the-counter (OTC) cryptocurrency market has surged. Tim Ogilvie, head of institutional business at the U.S. cryptocurrency exchange Kraken, stated: 'In short, the OTC market is very hot right now. While price increases are important, the rise in trading volume is even more significant.' He revealed that Kraken's OTC trading volume has grown by 220% year-on-year.
Jake Ostrovskis, an OTC trader at the famous market maker Wintermute, also noted that the mid-term market is relatively flat, but prices have risen during the election period, prompting participants to enter the market. He stated:
'Some clients hesitated for years before the elections, but after the results came out, they finally started to take action.'
Embert Lin, a trader at industry-leading market maker GSR, added that the price increases of BTC, ETH, and altcoins have sparked interest among investors and project parties in risk management and financial operations. He stated:
'Many institutions and investors are also looking for investment opportunities beyond Bitcoin and Ethereum.'
What could the surge in OTC trading represent?
As for the heat of the OTC market, it can somewhat represent an indicator of institutional entry, as institutions typically make larger purchases. If they directly enter the secondary market, it could cause significant price fluctuations; therefore, they prefer to trade through the OTC market.
Investor risk appetite has increased.
Additionally, it is noteworthy that these OTC platforms indicate that current clients' risk appetite has clearly increased, not limited to Bitcoin and Ethereum, but also exploring other cryptocurrencies with ample liquidity. Ogilvie pointed out that recent trading volume for Solana has significantly increased, making it a popular choice among risk assets.
Ostrovskis from Wintermute also listed some mainstream cryptocurrencies in the market, including BNB, Tron, and Aave, which, due to their strong liquidity, attract institutional investors to participate further.
Looking ahead to 2025: The market continues to grow steadily.
Regarding the coming year, Brett Reeves from cryptocurrency custody company BitGo predicts that the demand for the OTC market will remain high, especially for Bitcoin and Ethereum trades. He stated: 'The launch of ETFs has granted greater legitimacy to the asset class, which not only stabilizes the OTC market but also accelerates the overall adoption of cryptocurrencies.'
At the same time, Ostrovskis emphasized that the maturity of the derivatives market will be key to the next wave of growth. He pointed out:
'The widespread use of hedging tools such as options allows institutions to manage risks better, especially in scenarios with limited liquidity.' 'These products have gradually attracted market attention and may become a core growth area in the cryptocurrency market in the future.'