Big players in the cryptocurrency space have set up their own private network for OTC trading, buying and selling billions every month among their little club. And instead of using Bloomberg, Symphony or anything of that caliber usually employed by traders on Wall Street, they just Skype it.
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Trading Billions via Skype
According to a report by Reuters, after volumes increased ten fold year-over-year some of these cryptocurrency desks now often handle over $100 million a day. DCG’s Genesis Global Trading on average trades $75 million to $80 million daily, Chief Executive Michael Moro said, and in December reached a monthly record of between $1.5 billion and $2 billion. Circle traded OTC up to $4 billion a month over the past year, spokeswoman Jennifer Hanley said.
To avoid potential problems some record calls, register with US regulators, follow KYC and compliance standards, as well as only trade bitcoin and a handful of altcoins. And as for their preferred chatting network, Cumberland Mining’s global head of trading Bobby Cho explained that “We needed a tool that was global and more or less free and Skype provided that.”
Why Trade OTC?
It can also be a way for wales to avoid making big waves or spooking the market by keeping their trades private. “Generally, you would go trade through an OTC desk when you have a large block trade you want to do without moving the market too much or incurring too much slippage,” said Kevin Zhou, founder of cryptocurrency-focused hedge fund Galois Capital.
Why would big players choose to bypass cryptocurrency exchanges to trade in such a way? Tell us what you think in the comments section below.
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Source: Bitcoin.com