Recently, the trading volume in the over-the-counter (OTC) cryptocurrency market has surged. Tim Ogilvie, head of institutional business at the U.S. cryptocurrency exchange Kraken, stated: "In short, the OTC market is very hot right now. While price increases are important, the increase in trading volume is even more significant." He revealed that Kraken's OTC trading volume has grown by 220% year-on-year. Jake Ostrovskis, an OTC trader at the renowned market maker Wintermute, also pointed out that the mid-term market is relatively calm, but prices have risen during the elections, prompting participants to come in and position themselves. He stated: "Some clients hesitated for years before the elections, but after the results came out, they finally started to act."
Embert Lin, a trader at the industry-leading market maker GSR, added that the price increases of BTC, ETH, and altcoins have sparked enthusiasm among investors and project parties for risk management and financial operations. He stated: "Many institutions and investors are also looking for investment opportunities beyond Bitcoin and Ethereum."
What Might the Surge in OTC Trading Represent?
As for the heat of the OTC market, it can somewhat represent an indicator of institutional entry, as institutions usually buy in larger amounts. If they directly enter the secondary market, it could lead to significant price fluctuations; therefore, they prefer to trade through the OTC market.
Investor Risk Appetite Increases
It is also noteworthy that these OTC platforms indicate that current clients' risk appetite has clearly increased, not limited to Bitcoin and Ethereum, but also beginning to explore other cryptocurrencies with ample liquidity. Ogilvie noted that Solana's trading volume has recently surged, becoming a popular choice among risk assets.
Ostrovskis from Wintermute also listed some mainstream cryptocurrencies in the market, including BNB, Tron, and Aave, which attract institutional investors due to their strong liquidity.
Outlook 2025: Market Continues Steady Growth
For the coming year, Brett Reeves of cryptocurrency custody company BitGo predicts that demand in the OTC market will remain high, especially for Bitcoin and Ethereum trading. He stated: "The launch of ETFs has given greater legitimacy to the asset class, which not only stabilizes the OTC market but also accelerates the overall adoption of cryptocurrencies."
At the same time, Ostrovskis emphasized that the maturity of the derivatives market will be key to the next wave of growth. He pointed out: "The widespread use of hedging tools like options allows institutions to better manage risks, especially in situations with limited liquidity." "Such products have gradually attracted market attention and may become a core growth area in the cryptocurrency market in the future."