Minimum order size for bitcoin trades at Circle, one of the largest liquidity providers and over-the-counter (OTC) digital asset marketplaces in the world, has shot up to $500,000. That’s 100 percent higher compared to where the figure stood previously.
Rising OTC order sizes
OTC services are optimized for high net worth institutions and individuals looking to conduct large cryptocurrency trades without adversely affecting the market.
In a recent conversation with Business Insider, Circle Trade CEO Jeremy Allaire acknowledged that OTC order size had undergone a steep rise since January 2018 despite the slowdown in the 24-hour volume on retail exchanges.
According to Allaire, the average OTC order at Circle Trade currently stands at nearly $1 million with a few going as high as $100 million. However, the corresponding 24-hour volume on retail exchanges has come down to almost $20 billion a day from $70 billion at the beginning of the year. He further added that the average size of OTC orders would continue to rise.
Institutional Crypto Investment Is on the Rise
One of the underlying reasons behind the rise of OTC order sizes can be attributed to the ever-increasing institutional interest in digital currencies. Meanwhile, part of the surge could also be due to the additional security provided by OTC trades.
It is worth noting here that OTC trades are ideal for those who want to trade high volumes of cryptocurrencies, but without having to entrust an exchange for the transaction. This preference is evident from the fact that OTC orders usually see a spike in demand following reports of an exchange being breached.
Moreover, OTC orders of digital assets enable investors to get around price slippage while freeing them from the need of dozens of market-orders to go through with a trade.
Circle Trade, a Goldman Sachs-funded firm, is not the only platform around to offer a robust OTC trading desk. Interested investors also have alternatives in DRW’s Cumberland and the newly launched OTC offering at Gemini. Despite the competition, Circle continues to grow as its monthly crypto trading volume exceeded the $2-billion-a-month milestone.
With the notable growth in popularity and trade volume, Circle Trade is now expanding its presence in Asia as well.
The spike in Circle’s crypto trading volume began shortly after the company inked a $400 million deal to acquire popular exchange Poloniex. The acquisition has so far proved to be of immense help for the company’s expansion efforts and its plan to introduce additional coins and a more robust fiat-to-cryptocurrency transaction mechanism for investors.
Dublin-registered Circle announced earlier in March 2018 that it was hiring 100 new employees to improve customer support, technology, and operations at Poloniex. Additionally, the company also mentioned a plan to hire 25-35 more employees to support its Asia operations.