Editors Note: This article comes fromccn.com,author:Joseph Young
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A few days ago, Bithumb, South Koreas largest virtual currency exchange by trading volume, launched an OTC trading platform Ortus to provide OTC virtual currency trading services for institutional investors with strong capital.
Bithumb Global Limited, a subsidiary of Hong Kong-based Bithumb, said in an official statement that it will serve institutional investors under the Ortus brand.
Can Ortus really satisfy institutional investors demand for virtual currencies?
Since late 2017, various reports have claimed that the volume of over-the-counter trading of virtual currencies is far greater than that of trading on cryptocurrency exchanges.
According to research by the research and consulting firm TABB Group, in April last year, the daily OTC trading volume of BTC reached 12 billion US dollars, which was comparable to that of cryptocurrency exchanges. By August, the OTC trading volume was two to three times that of the on-site trading volume.
Referring to the TABB Group study, cryptocurrency researcher Eric Wall said:
“This report shows that the volume of OTC transactions is 2-3 times higher than that of on-exchange transactions. This means that 1 million to 1.5 million BTCs are traded off-exchange every day, and these transaction records cannot be seen on the chain, Only 100,000 BTC transaction records are recorded on the chain every day”
At the time, a TABB Group researcher emphasized that not all off-exchange transaction records can be seen on the blockchain, because in most cases, the buyer just got the cold wallet holding the bitcoin.
Over the past 12 months, major digital currency exchanges have launched OTC services in an attempt to penetrate the OTC market. Among the top ten exchanges by trading volume on CoinMarketCap, Huobi, OKEx, Bit-Z, and BitForex are considered veteran OTC trading platforms. On January 24 this year, Binance officially launched its OTC trading platform. On November 24, 2018, Coinbase announced the launch of Prime, an OTC crypto trading platform.
Digital currency service Circle said its over-the-counter trading business achieved triple-digit growth.
Exchanges earn transaction fees primarily by settling trade orders. Therefore, if the demand for OTC trading from institutional investors is not high, exchanges are unlikely to devote resources and efforts to develop this market.
The trend of more and more mainstream digital asset trading platforms exploring over-the-counter trading platforms shows that exchanges do see demand from institutional investors in certain regions.
The expansion of Bithumb in Hong Kong, as well as the launch of its own OTC trading platform, marks the first steps the company has taken so far outside of the South Korean cryptocurrency exchange market.
Last year, there were rumors that Bithumb might launch a fiat exchange in the UK by the fourth quarter of 2018.
However, Bithumb has yet to finalize its European expansion plans, and it remains uncertain whether the company will proceed with its plans in 2019.
Ortus is a company that pays Bithumb to use its brand name in the global market, a representative of Bithumbs parent company BTCKorea.com told CoinDeskKorea in an interview.
“Ortus has no direct relationship with Bithumb, and Bithumb does not intend to cooperate with it,” the representative added, “Ortus is using the Bithumb brand as a partner company, therefore, Bithumb has not opened an actual OTC trading platform.”
Bithumb wants to keep a distance from Ortus.
However, the official statement issued by Bithumb Global Limited clearly stated that Bithumb Global Limited is operating under the Ortus brand.
