Significant Growth in Cryptocurrency OTC Market

The cryptocurrency over-the-counter (OTC) market matured significantly in 2023, achieving an annual growth rate of 106%, according to Finery Markets’ 2024 Review. The report highlighted a dynamic year for institutional and large-scale digital asset transactions, driven by key macroeconomic and industry-specific developments.

These developments include the introduction of Bitcoin and Ethereum exchange-traded funds, the nomination of pro-crypto President-elect Donald Trump, and the continued institutionalization of digital assets.

Analysts noted, “Traditional financial leaders shifted their stance from skepticism to neutrality or acceptance as the industry matured, with institutions either entering crypto markets or planning acquisitions to establish market positions,” emphasizing the increasing pathways to regulated market access.

What is OTC Trading?

OTC trading refers to direct, off-exchange transactions between buyers and sellers, often facilitated by brokers or trading desks. This enables institutions and high-net-worth individuals to execute large trades with minimal market impact. Finery, the operator of the crypto electronic communication network, collected its data from various market makers, payment providers, brokers, OTC desks, hedge funds, and custodians.

2024 Quarterly Performance Highlights

The fourth quarter of 2024 proved to be the standout period for OTC trading, significantly outperforming all other quarters. Analysts reported that total OTC volumes increased 177% year-over-year in Q4, driven by favorable post-election sentiments for cryptocurrencies. Bitcoin crossed the milestone of $100,000 for the first time in early December.

“Long story short, OTC is going gangbusters right now,” said Tim Ogilvie, head of institutional at crypto exchange Kraken. “Prices are up, but volume is way up,” he noted, with rival firms also seeing increases.

In Q2 2024, OTC trading volumes witnessed triple-digit growth at 110%, boosted by successful spot Bitcoin ETF launches. In comparison, OTC trading in Q1 and Q3 had growth rates of 80% and 78%, respectively.

Finery reported a growing demand for stablecoins, which solidified their market dominance as a bridge between traditional and digital finance. In Q4, crypto-to-stablecoin trading activity surged 311% year-over-year, with transaction volumes exceeding those of Visa.

Expectations for Crypto OTC Trading in 2025

Analysts expect the growth in crypto OTC markets will continue into 2025. Brett Reeves, Head of European Sales at BitGo, stated that raised institutional demand is likely to last, particularly for Bitcoin and Ether. He mentioned the emergence of crypto ETFs further solidified this belief.

Finery Markets also pointed to a shifting landscape in U.S. politics as potentially favorable for the digital asset sector, stating that pro-crypto sentiment could pave the way for rapid mass adoption, particularly among U.S.-based institutions.

The report speculated on the effects of Trump’s proposed U.S. bitcoin strategic reserve, suggesting it could trigger global shifts in the perception of digital assets. “A potential U.S. bitcoin reserve implementation could lead to global shifts as countries and corporations abandon zero exposure to crypto strategies,” concluded the Finery Markets Review.