H1 2024 Roundup: Crypto OTC Market Sees Surge in Flows Amid ETF Approvals

The recent approval of crypto-related vehicles has sparked institutional interest in adopting crypto for the long term.

The Finery Markets team analyzed 2 million spot trades conducted by institutions through the Finery Markets platform in the first six months of 2024 and 2023. The trade data was collected from various market participants such as market makers, payment providers, brokers, over-the-counter desks, hedge funds, and custodians. The findings presented in this report are based on the sampled trades and highlight the conclusions and trends observed.

H1 2024 Roundup

The recent approval of crypto-related vehicles sparked institutional interest in adopting crypto for the long term. In the first half of the year, we saw the successful launch of a BTC ETF, followed by major financial institutions taking steps to expand this to include ETH and Solana. The increase in cryptoOTC flows is a reflection of this trend.

However, we believe that the full impact of ETF approvals on the market may not be fully realized until six to nine months later, as it typically takes this amount of time for innovative products to be fully integrated into financial players’ product portfolios and widely adopted.

Key Takeaways

Institutions are showing a preference for conducting large trades over-the-counter, with an average trade size of over $2 million on Finery Markets. This preference is driven by the benefits OTC trades offer, such as better pricing, trade anonymity, and the ability to execute large trades without impacting the market price.

Institutions are increasingly using cryptoOTCs to gain long-term exposure to digital assets. This trend is evident in the rising cryptoOTC volumes, which grew by 200% year-over-year in H1 2024. The ETF launches and the entry of new crypto-native institutions also contributed to this growth.

Institutions are shifting their strategies to adapt to the changing market conditions. In H1 2024, we observed a decrease in the average trade frequency and an increase in the average trade size on Finery Markets. This shift suggests that institutions are prioritizing executing larger trades less frequently to optimize their capital utilization and minimize trading costs.

Read the full report here.

The above is the detailed content of H1 2024 Roundup: Crypto OTC Market Sees Surge in Flows Amid ETF Approvals. For more information, please follow other related articles on the PHP Chinese website!