The company is Coinbase going to start private (OTC) block trading, which should contribute to price stability and accuracy of execution of orders.
OTC block trading, which is conducted outside the stock books of orders designed to attract this market is the growing number of big players who are increasingly interested in the possibilities of cryptocurrency trading. Note that at the time of this writing, the market capitalization of crypto-currencies accounted for nearly $437 billion (with an increase of $26 billion per day).
In recent months, the OTC trading in the cryptocurrency market have been intensified. The volume of transactions, the world’s largest OTC stock exchanges is about $2 billion a month, and recently a range of cryptocurrency sites conducted daily transactions in excess of $100 million with minimum trades from $75 000 to $250 000.
Coinbase with its subsidiary exchange GDAX offers a solution for institutional traders since 2014. Support OTC block trading could be an important step in attracting large financial institutions that may have a significant impact on the market.
Larry Tabb, founder of the consulting firm Tabb Group, said in an interview with Business Insider that the OTC may be a critical service for any exchange that wishes to attract institutional funds into the markets of digital currencies.
In addition, there is information that Coinbase hires head of market structure, which will be responsible for exploring new types of orders, programs promoting liquidity and market security. Tabb believes that such incentives will increase the institutional liquidity GDAX.
In General, OTC trading may generate significant benefits traders aimed at cryptocurrency markets. The new service Coinbase should significantly mitigate the slippage in prices, which usually result in a major transaction, especially in inactive markets the less well-known cryptocurrency.
OTC block trading is booming, but it has its problems. For example, U.S. companies still face a lack of clear rules from the regulators. The Commission on trade commodity futures (CFTC) considers bitcoin a commodity, while the Commission on securities and exchange Commission (SEC) said that most altcoins and tokens should be considered securities.