Circle Executed $24 Billion in OTC Trades in 2018


The over-the-counter (OTC) trading desk at cryptocurrency finance firm Circle had a notional volume of $24 billion in 2018, according to an official Medium blog post on Jan. 3.  

Per the statement, Circle executed 10,000 OTC trades with 600 different counterparties, at $24 billion in volume. As such, the company claims to have become a “core liquidity provider to the entire crypto ecosystem.”

According to Circle, the firm now partners with over 1,000 institutional clients such as exchanges, token projects, OTC desks, asset managers, and other global endowments. Circle stated:

“This year, we anticipate further incremental growth in institutional adoption catalyzed by stablecoin usage, advancements in institutional custody solutions, increasing regulatory clarity particularly in the [United States], and improvements and innovation in core crypto infrastructure.”

OTC trading allows investors to carry out trades directly with one another without relying on the services of an intermediary such as a cryptocurrency exchange. OTC trading services in digital assets are a particular draw for institutional investors, who are increasingly using the OTC desks of firms like Circle and Coinbase.

As Cointelegraph reported in December 2017, institutional investors as a whole have shifted to higher liquidity OTC Bitcoin (BTC) markets. Investment is growing in OTC funds like that offered by Coinbase, which launched OTC trading for institutional customers in November 2018.

Coinbase outperformed Grayscale’s Bitcoin Investment Trust (GBTC) on OTC markets in terms of BTC trade volume. While OTC trade volumes are dwarfed by non-OTC investment, it is still significant as OTC markets are only open for 31 percent of annual tradable hours.

MV Index Solutions, a subsidiary of VanEck that develops, monitors and licenses MVIS indices, has also jumped on the OTC bandwagon. In November 2018, MV Index Solutions launched its Bitcoin index based on three major OTC desks in November.