The bear market is in full swing but institutional interest is going nowhere as ICE CEO and NASDAQ chairman Jeffrey Sprecher has shared. A new crypto 2.0 futures-type contract by NASDAQ and VanEck, growth in OTC market among other factors reflect this swing in interest.
Institutions Loving the Bear Market
“No one has dropped out of crypto. They could have walked out but no one is walking away,” says Jeffrey Sprecher, CEO of Intercontinental Exchange (ICE) and chairman of the New York Stock Exchange (NASDAQ).
“Will digital assets survive?” Despite Bitcoin down 80% from its peak, according to Sprecher, “I’d say the unequivocal answer is yes.”
It’s been about a fortnight that Bitcoin has been bleeding red and further dragging the crypto market down. Bitcoin dropped below $3,500 first time in 14 months a couple of days back.
However, despite the bear market being in full force, institutions are not backing off, rather they have taken a certain liking to the leading cryptocurrency. Just yesterday, the news of NASDAQ on the road to the launch of its digital asset platform in 2019 hit the market.
Nasdaq is also partnering up with investment management firm VanEck to “bring a regulated crypto 2.0 futures-type contract” in the crypto market.
Bear market has started a selling trend in the market, whose other side is a buyer reflecting an accumulation sentiment in the market as well. Bitcoin auto trading platforms, chiefly Bitcoin robots, have been taking advantage of volatility in the markets. Institutions are apparently driving this accumulation phase. Jake Chervinsky, a litigation attorney recently shared,
“Investors, with bitcoin trading under $4,000: Retail: ‘should I sell and buy back lower? should I open a short? should I just give up? is it going to zero? was this whole crypto thing a scam after all?’ Institutions: ‘please keep selling us cheap bitcoin. thank you.”
Bitcoin OTC Movement
Over-the-counter (OTC) trading plays a crucial role here which is done off-exchange, either through a broker or peer-to-peer.
The global retail OTC trading volume is already seeing a spike as shown in the below chart depicting trading volume of Finland-based Localbitcoins that facilitates over-the-counter trading of local currency for bitcoins,
Crypto enthusiast Evin Enry shared on Twitter,
Over the counter OTC in BTC (Bitcoin) is a term not like the Stock Market OTC,
It refers to non-platform transactions. The Volume of Person-To-Person or non Bitcoin Exchange Transactions are Double what the Posted Exch Volumes are. The wealth transfer is going 50% offline now
— Evin Enry (@TulliiLLC) November 27, 2018
According to a research by TABB Group, an estimate of $12 billion in Bitcoin has been accounted in OTC trading volume.
Recently, in an interview with a media channel, Hodl Hodl, a P2P Bitcoin exchange stated,
“We see huge increase in OTC trades, and although overall market volume is decreasing, OTC segment is increasing.”
Jeremy Allaire, CEO of Circle has also revealed that OTC market is a big growth area and its OTC business has seen a growth of triple digits. Just last month, Changpeng Zhao, CEO of largest crypto exchange Binance said, “What I’ve heard is the OTC market is at least as large as the live recorded volumes [on exchanges]. So that is at least 50 percent of volumes that is not being reported on CoinMarketCap.”