2024 saw a significant surge of 106% in institutional crypto over-the-counter (OTC) trading volumes, primarily driven by the victory of Republican candidate Donald Trump in the U.S. election and increased demand for US spot crypto exchange-traded funds, as reported by Finery Markets.
As a crypto investor, I witnessed an extraordinary surge in the final quarter of the year. Specifically, Bitcoin (BTC), Ether (ETH), and stablecoin over-the-counter (OTC) trading volumes skyrocketed by 80%, 187%, and 191% respectively compared to the same period last year. This remarkable increase coincided with Donald Trump’s election victory and the incoming administration’s pro-crypto stance, according to a 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.”
In the second quarter, there was a 110% increase compared to the same period last year. Finery believes this significant growth is due to the successful debuts of US-based Bitcoin exchange-traded funds. Notably, both Q1 and Q3 experienced substantial increases in over-the-counter (OTC) trading volume, up by 80% and 78% respectively.
During every month from 2023, there was no drop in the volume of Over-the-Counter (OTC) crypto trading. This suggests that market participants are increasingly preferring the less public trading approach over traditional public exchanges.
The significant increase in institutional crypto Over-The-Counter (OTC) trading volumes can largely be attributed to traditional finance (TradFi) figures moving from a stance of skepticism towards neutrality or acceptance as the industry evolved, according to Finery’s observations. Finery based its findings on an analysis of 4 million spot trades carried out in 2024 on its platform by market makers, payment providers, brokers, OTC desks, hedge funds, and custodians.
Despite the OTC (Over-the-Counter) market for cryptocurrencies being significant, it’s often overlooked because of its complex, less transparent structure, and collecting data from a decentralized system can be challenging, according to Finery.
The trading volume of crypto OTC (over-the-counter) for altcoins has seen a significant surge, causing their market share to jump from 13% in the year 2023 to a substantial 29% during the previous year.
In the over-the-counter (OTC) market, Litecoin (LTC) continues to be the preferred altcoin among institutional investors. Notably, the value of Litecoin surged by 149% in the year 2024. Additionally, trading volumes for Solana (SOL) and Ripple‘s XRP (XRP) also experienced an increase in this market during the same period.
In Q4, there was a significant surge of 440% and 311% respectively in the volume of over-the-counter (OTC) trades involving cryptocurrencies and stablecoins versus other cryptocurrencies. However, demand from institutions has remained relatively modest, as highlighted by Finery.
Outlook for 2025
In 2025, Tier 2 and Tier 3 crypto exchange platforms within the European Union might encounter growing liquidity problems due to the Markets in Crypto-Assets Regulation. This could lead them to consider new broker-dealer business structures or innovative liquidity strategies to stay competitive in the market.
As a crypto investor, I’m excited about the potential impact of a more crypto-friendly administration. This could pave the way for increased institutional adoption, propelling us further into the digital currency era. Moreover, if the U.S. decides to establish a strategic Bitcoin reserve, it might set off a worldwide trend. As more countries and corporations opt out of the “zero exposure” strategy, we could witness a significant global shift towards embracing cryptocurrencies.
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2025-01-14 03:24