Coinbase Launch OTC Trading Desk for “Prime” Clients

Coinbase exchange has launched Over-The-Counter (OTC) trading option for its institutional clients according to the firm’s head of sales Christine Sandler.

While speaking to Tanaya Macheel in an exclusive interview granted to a financial news agency, Cheddar, Sandler said that Coinbase had to roll out the offering to meet the demands of its institutional clients..

With the new platform, Coinbase will only match orders filed by clients rather than operating as a full exchange like they do with their retail trading platform.

Speaking on the reason while Coinbase has introduced OTC trading, Sandler told the publication,

We launched our OTC business as a complement to our exchange business because we found a lot of institutions were using OTC as an on-ramp for crypto trading. We felt this was a huge benefit to our clients to actually leverage both our exchange and our OTC business.

As per the report, OTC trading via the Coinbase Prime platform which was launched in April started earlier this month.

Prime users which are primarily institutional investors have been allowed to trade crypto assets via the platform as well as other subordinate channels such as email, order books, phone calls, and Skype among others.

Coinbase’s OTC trading guarantees Immediate settlement and no possibilities of a failed trade according to the sales head.

She also revealed that the offering will be upgraded in the future to include delayed settlement and also to incorporate the Coinbase Custody platform used by the exchange for hedge funds.

Are Institutional Investors Buying Bitcoin Lows Via Coinbase OTC Trading?

The introduction of OTC trading on Coinbase has somehow coincided with the fall in the value of Bitcoin and the rest of the crypto markets. From around $6500, Bitcoin has declined to below $4000. Who is responsible for the downturn?

As we reported earlier, crypto expert Anthony Pompliano stated that the recent market decline has something to do with institutional investors entering the space at the expense of scared retail investors.

The latest news around Coinbase and it’s OTC trading is only proving that claim to be true. Since we do not have great insight into the OTC markets, we may not be wrong to conclude that Bitcoin is just changing hands from scared retail investors to institutional investors.

Nasdaq exchange recently, resurrected their plans to launch a Bitcoin Futures contract in Q1 2019 while Bakkt already lined up one of such products with a January 24 launch date.

We will be keen to see how the recent wave of institutional involvement in cryptocurrencies will turn the fortunes of the market around

Coinbase’s OTC trading may just be a tool used to achieve the market resurgence when it finally begins to happen.

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