Navigating the landscape of Bitcoin Over-The-Counter (OTC) desks can be complex due to their often confidential operations and non-disclosure of transaction volumes. This article sheds light on the most prominent OTC desks in the industry, recognized for their significant role in facilitating large-scale Bitcoin trades.
It also explores the distinctions between Bitcoin brokers and OTC desks, outlining their relevance to institutional investors who prioritize privacy and minimal market impact. Additionally, the article delves into the evolving trend of smart order routing software, which is increasingly adopted by sophisticated investors to manage large trades efficiently and discreetly.
Identifying the top Bitcoin Over-The-Counter (OTC) desks can be more challenging than exchanges. OTC desks often operate with a degree of confidentiality, and their transaction volumes are not always publicly disclosed. However, several OTC desks have gained prominence in the industry due to their reputation, volume of transactions, and clientele. Some of the notable OTC desks known for their significant role in Bitcoin trading include:
Top Bitcoin OTC-Desks
| # | Broker or OTC-Desk | Inception Date | Domicile |
| 1 | Cumberland A subsidiary of DRW Trading, Cumberland is known for large-scale cryptocurrency trading and offers OTC services. | 2014 | USA |
| 2 | B2C2 Known for deep liquidity, the UK-based trading firm was acquired by the Japanese financial group SBI in 2020. | 2015 | UK |
| 3 | GSR London-based liquidity provider with a 10-year track record and connections to 60 exchanges and DEXes. | 2013 | UK |
| 4 | Kraken OTC Established a crypto exchange with a dedicated OTC desk for high-volume institutional investors. | 2011 | USA |
| 5 | Coinbase Prime Trusted OTC desk from a highly regulated exchange, offering secure and reliable transactions for large trades. | 2018 | USA |
WHAT IS A BITCOIN BROKER?
In traditional finance, OTC desks often focus on selling securities not listed on a stock exchange, such as “pink sheet” securities, whereas stock brokers sell exchange-listed securities for the most part. In the Bitcoin market, a broker or an OTC desk can refer to different types of services in the cryptocurrency space, ranging from platforms that facilitate the buying and selling of Bitcoin for retail investors to more institutional-focused services.
Due to privacy, institutional investors interested in buying Bitcoin prefer to use OTC desks over exchanges or brokers. OTC-Desks and brokers get their liquidity from different sources, and this is highly relevant for investors who wish to trade without influencing the price. “Brokers typically forward the client’s order to an exchange or OTC desk. The order is visible in the order books of the exchanges and may influence the price of the trading pair – that’s not always desired, especially for larger trades or “insider” trades. OTC desks manage their own private order book, sometimes also their own liquidity. In reality, the distinctions between brokers, OTC desks, and market makers can be fluid.” Markus Perdrizat, ACK Consulting Knowledge
An alternative to buying large quantities of Bitcoin via an OTC desk is smart order routing software that breaks up large trades into small tranches and routes them to different OTC desks and exchanges to get the best execution. In the late 1980s and 1990s, the majority of institutional security trading occurred through OTC desks; however, over time, sophisticated institutional investors adopted smart order routing software that allowed them to trade directly. The researchers at Cointelegraph predict that the same trend will occur in the digital asset market because smart order routing software gives institutional investors more control over their trades and more privacy. There are various smart order routing software in the digital asset market, such as CoinRoutes, Talos, and Wyden (formerly AlgoTrader).
In summary, identifying leading Bitcoin OTC desks is crucial for institutional investors seeking privacy and efficiency in large-scale transactions. The article highlights the key players in the OTC space and clarifies the roles of brokers versus OTC desks in the cryptocurrency market. With the rise of smart order routing software, there is a noticeable shift towards more controlled and private trading practices, mirroring trends seen in traditional securities markets.
As the digital asset market continues to mature, these advanced trading solutions are likely to become integral tools for institutional investors looking to optimize their Bitcoin trading strategies.
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