[2018-12-30] Bitcoin Whales and the Rise of Crypto-Fueled OTC Desks in 2018

[tyz]

Cryptocurrencies grew immensely popular in 2017, but throughout the following year, digital asset markets fell sharply in value. However, over-the-counter (OTC) market makers thrived in 2018, with a slew of business models in the industry catering to OTC clients.
https://news.bitcoin.com/bitcoin-whales-and-the-rise-of-crypto-fueled-otc-desks-in-2018/

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[gentlemand]

OTC is one of the great mysteries. I seem to remember asking repeatedly on here what everyone's experiences were with them and only got a couple of answers back.

Should I need to cash out I'd vastly prefer to use somewhere with tailored service rather than some asshole exchange ready to freeze me and turn my future into a ticket number. I want to hear more about them before considering it though.

[Betwrong]

OTC is one of the great mysteries. I seem to remember asking repeatedly on here what everyone's experiences were with them and only got a couple of answers back.

Should I need to cash out I'd vastly prefer to use somewhere with tailored service rather than some asshole exchange ready to freeze me and turn my future into a ticket number. I want to hear more about them before considering it though.

I've made a research on some known OTC platforms, and here's what I've found regarding their trading volume


Cumberland Mining

Cumberland claims to have done over $20 billion volume in 2017 alone.

Circle

https://www.circle.com/en/about
Our OTC crypto desk Circle Trade moves over $2B each month.

itBit

itBit’s OTC trading desk trades between 15,000 - 25,000 XBT per month.

CoinCola

By analyzing the BTC-CNY transaction data of LocalBitcoins, Paxful and CoinCola in the past two weeks, the total transaction volume of the three platforms was 680 million yuan [around 100 mln USD], of which the Hongkong-based CoinCola increased significantly, accounting for up to 70%. [OCT 30, 2017]

And finally, an estimation cited by Forbes [Oct 23, 2018]:

A report earlier this year produced by the Tabb Group estimated daily bitcoin OTC volumes at $12B globally.

I don't know if all of the above is true, but that's what I've managed to find, and it would be interesting to see the comments regarding how close to reality those numbers are.

[gentlemand]

Cumberland Mining
Cumberland claims to have done over $20 billion volume in 2017 alone.

Cumberland's offer to take all of the Gox coins out of the court's hands says quite a bit.

https://www.reddit.com/r/mtgoxinsolvency/comments/6fu9wc/cumberland_wants_to_help/

I presume once you're up to a certain level a lot of these people will know each other and trades between them will look pretty casual on the surface. There's absolutely no reason to publicise them so it's area that's going to remain forever a mystery to the rest of us.

[1Referee]

There's absolutely no reason to publicise them so it's area that's going to remain forever a mystery to the rest of us.

With LBTC it will be more of a question than ever before, because you can simply choose to hide the value of your transfers. The only thing that you are left with is a public transaction, but the amount is only known between the parties transacting.

This might even be something that will be adapted by large institutions in the same way they use Ripple's solutions to move value from point A to B. Institutions don't want speculation to boil up about who or what moved 50,000BTC, which is what LBTC offers.

The more hacks we see pop up, the more incentive large parties will have to jump into the OTC market. Another thing is that the liquidity on exchanges is still piss poor. Cashing out through the spot market for a whale means dragging the market down with 5-10% while the dump itself isn't even that big in terms of volume. It's just the lack of liquidity turning relatively small $$ dumps into giant red candles.

[Coffee135]

It seems to me that all exchanges are intermediaries between small holders of coins and whales. Their interests are to lower prices as much as possible and buy our assets. This will continue until there is an opportunity to buy goods for cryptocurrency without exchange for Fiat. But this does not want a system that controls the world's finances. We will always be held hostage to manipulation.