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The fourth quarter saw the largest jump in institutional crypto OTC trading, as Donald Trump’s US election win fueled crypto spot trading to 2024 highs, said Finery Markets.
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Institutional crypto over-the-counter (OTC) trading volumes rose 106% in 2024 — fueled largely by Republican Donald Trump’s US election win and demand for US spot crypto exchange-traded funds, according to Finery Markets.
The fourth quarter saw the largest jump, with Bitcoin (BTC), Ether (ETH) and stablecoin OTC trading volumes increasing 80%, 187% and 191% year-on-year, respectively — which came amid Trump’s victory and the incoming administration’s pro-crypto stance, said the crypto OTC infrastructure firm.
“Although comprehensive regulatory clarity is still pending, the pro-crypto stance of the Trump administration significantly fueled Q4 crypto spot trading to 2024 highs.”
The second quarter rose 110% year-on-year — which Finery attributed to the “successful” US spot Bitcoin exchange-traded fund launches — while Q1 and Q3 also saw impressive OTC trading volume rises of 80% and 78%.
There wasn’t a single month where crypto OTC trading volumes fell from 2023 — indicating market players are warming to the more private method for trading as opposed to using public exchanges.
Monthly crypto OTC transaction volume year-on-year changes in 2024. Source: Finery Markets
The rise in institutional crypto OTC trading volumes largely came from more TradFi leaders shifting their stance from “skepticism to neutrality or acceptance as the industry matured,” Finery said.
Finery said it obtained its data from analyzing 4 million spot trades made on its platform in 2024 from market makers, payment providers, brokers, over-the-counter desks, hedge funds and custodians.
The crypto OTC market does, however, remain understudied due to its “opaque nature” and because decentralized data is more difficult to gather, Finery said.
Finery also noted crypto OTC trading volumes for altcoins are “on the rise” — increasing their market share from 13% in 2023 to 29% last year.
Related: Bitcoin miner OTC balances reach 2-year high — Why it’s a bearish signal
Litecoin (LTC) remains the leading altcoin among institutional investors in the OTC market, increasing 149% in 2024, while OTC trading volumes for Solana (SOL) and XRP (XRP) increased too.
Crypto-to-crypto and crypto-to-stablecoins OTC trading volumes saw 440% and 311% increases in the fourth quarter — however, institutional demand remains relatively low, Finery noted.
Outlook for 2025
Finery said “tier 2” and “tier 3” CEXs may face increasing liquidity issues in 2025 as a result of the European Union’s Markets in Crypto-Assets Regulation — forcing them to explore new broker-dealer business models or alternative liquidity solutions to “remain competitive.”
Meanwhile, a more crypto-friendly Trump administration could push institutional adoption even further. At the same time, a strategic US Bitcoin reserve could trigger a “global shift” as more countries and corporations abandon the “zero exposure” strategy, Finery said.
This article first appeared at Cointelegraph.com News
