Bithumb Launches OTC Trading Desk For Crypto

Bithumb Global, a well-known cryptocurrency exchange company, has just introduced an over-the-counter (OTC) trading desk. It has been developed specifically for digital currencies.

According to the official report, the company made the announcement on Thursday. It stated that the Ortus – the new Hong Kong-based venture – is basically a block deal and matchmaking service. It is the type that is meant solely for institutional clients.

OTC Deal In a Nutshell

In an OTC deal, two parties are said to be trading directly with other. But unlike on an exchange, orders are being matched between sellers and buyers. In a sense, the OTC is a much more appealing and convenient service to have.

Bitthumb’s very own director named Rahul Khanna said that Ortus is expected to operate in order to allow institutions to buy and sell cryptocurrencies. What is more is that the process will be made possible via a network of global liquidity providers. From there, they could easily benefit from a competitive yet best price implementation service.

In order for clients to get started, they have to undergo a series of strict onboarding processes. This would include anti-money laundering (AML) and know-your-customer (KYC) documentations. Ortus is going to offer features, among of which are insured custody and transfers from a United States-based bank account. The company, however, did not necessarily set out which digital currency it will offer for the entire OTC trades.

It is worth noting that there are a growing number of digital currency exchanges offering OTC trading desks in the past few months. The idea is pretty straightforward, though. It is to simply take advantage on the growing interest from many institutions.

Growing Demand For Crypto

Take for example Bittrex, which launched an OTC desk last month. Its service, in particular, reportedly includes around 200 digital currencies. In December of last year, Poloniex implemented an OTC trading desk for institutional clients, though there is a minimum order size required and it is around $250,000. Just a month prior, Coinbase – a cryptocurrency exchange unicorn – introduced an OTC service and it is intended for its Prime customers. These customers are basically those who want to trade with business funds.

Since 2017, there are various reports suggesting that the OTC market is more massive than the crypto exchange market. According to TABB Group, the OTC market of the world’s leading cryptocurrency, Bitcoin, is two or three times large that the exchange market. However, not all transactions in OTC are visible on the blockchain, especially since buyers would tend to obtain cold wallets that  hold BTC.