{"id":86942,"date":"2018-10-03T10:00:31","date_gmt":"2018-10-03T17:00:31","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=86942"},"modified":"2020-03-24T06:49:38","modified_gmt":"2020-03-24T06:49:38","slug":"institutions-stocking-up-on-cryptocurrency-behind-closed-doors","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/institutions-stocking-up-on-cryptocurrency-behind-closed-doors\/","title":{"rendered":"Report: Institutions Stocking Up on Cryptocurrency Behind Closed Doors"},"content":{"rendered":"<p>Those waiting for institutional elephants to jump into the market\u2019s $200 billion paddle-pool may be in for a surprise; as market capitalization simmers barely above its October 2017 levels, it would appear that corporate \u2018smart money\u2019 has started accumulating vast quantities of cryptocurrency behind closed doors.<\/p>\n<p>According to Bobby Cho, head of global trading at over-the-counter (OTC) trading giant Cumberland, institutional clients have now succeeded high-net-worth individuals as the largest buyers of cryptocurrency, <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2018-10-01\/institutional-investors-are-using-back-door-for-crypto-purchases\">Bloomberg<\/a> reports.<\/p>\n<h2>Mom\u2019s the Word<\/h2>\n<p>Given the <a href=\"https:\/\/cryptoslate.com\/why-major-crypto-exchange-okex-controversially-used-user-funds-to-liquidate-contract\/\">bedlam<\/a> that unfolded around several botched multi-million-dollar exchange trades, the discrete nature of the OTC market has been known to strike a chord with a number of institutional players\u2014slinking well under the radar of the burgeoning, yet primarily retail-oriented exchange market, in order to execute reliably profitable orders.<\/p>\n<figure id=\"attachment_70018\" aria-describedby=\"caption-attachment-70018\" style=\"width: 300px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-70018\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/07\/crypto-herd-social-300x158.jpg\" alt=\"Mike Novogratz: A \u201cHerd of Institutional Investors Moving Into Crypto\u201d\" width=\"300\" height=\"158\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/07\/crypto-herd-social-300x158.jpg 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/07\/crypto-herd-social-768x403.jpg 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/07\/crypto-herd-social-1024x538.jpg 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/07\/crypto-herd-social.jpg 1200w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><figcaption id=\"caption-attachment-70018\" class=\"wp-caption-text\">Related:\u00a0<a title=\"Mike Novogratz: A \u201cHerd of Institutional Investors Moving Into Crypto\u201d\" href=\"https:\/\/cryptoslate.com\/mike-novogratz-a-herd-of-institutional-investors-moving-into-crypto\/\">Mike Novogratz: A \u201cHerd of Institutional Investors Moving Into Crypto\u201d<\/a><\/figcaption><\/figure>\n<p>In May, research and consulting outfit TABB Group produced a lengthy analytical report <a href=\"https:\/\/www.businesswire.com\/news\/home\/20180515006101\/en\/Factors-Limiting-Institutional-Cryptocurrency-Trading-Market-Trading\">estimating<\/a> the Bitcoin OTC market was at the time up to three times larger than that of exchanges.<\/p>\n<p>Should such a ratio still stand today, roughly $12 billion worth of the original cryptocurrency alone would pass hands each day via OTC, or just shy of the entire daily volume of the exchange market.<\/p>\n<p>At the time, the report\u2019s author Monica Summerville <a href=\"https:\/\/www.businesswire.com\/news\/home\/20180515006101\/en\/Factors-Limiting-Institutional-Cryptocurrency-Trading-Market-Trading\">suggested<\/a> a \u201csignificant\u201d quantity of institutional capital was being stockpiled for cryptocurrency, highlighting three check-marks to be ticked before the much-prophesied institutional crypto feeding frenzy could occur. In May, she noted:<\/p>\n<blockquote><p>&#8220;[Institutional participation is currently] held back by a lack of greater regulatory clarity, institutional grade data and enterprise-ready infrastructure, waiting for the right conditions to enter the market, expected to begin happening this year.&#8221;<\/p><\/blockquote>\n<p>For those with the deepest pockets, it would seem that time has come.<\/p>\n<h2>Land Ahoy<\/h2>\n<p>Inking deals worth more than $100,000 of crypto-assets at a time, corporate buyers such as hedge funds have been opting for fixed-price OTC trades in order to mitigate the known risks afforded by market volatility, according to Cho, who surmised:<\/p>\n<blockquote><p>&#8220;What that\u2019s showing you is the professionalization that\u2019s happening across the board in this space. The Wild West days of crypto are really turning the corner.&#8221;<\/p><\/blockquote>\n<p>Where retail traders might have harbored a deep-seated grudge against the market\u2019s recent lack of fireworks, it would seem institutions have been taking the mid-year lull as their cue to enter. Cho <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2018-10-01\/institutional-investors-are-using-back-door-for-crypto-purchases\">stated<\/a>:<\/p>\n<blockquote><p>&#8220;Over the last four to six months, the market has been trading in a very tight range, and that\u2019s seems to be corresponding with traditional financial institutions becoming more comfortable diving into the space.&#8221;<\/p><\/blockquote>\n<p>And if Summerville\u2019s checklist is anything to go by, the institutions should have been edging to the end of the springboard in leaps and bounds. With the dizzying number of institutional-grade products launched in recent months\u2014whether <a href=\"https:\/\/cryptoslate.com\/nasdaqs-new-institutional-product-for-digital-assets-is-crucial-to-the-crypto-market\/\">Nasdaq\u2019s pricing analytics<\/a>, Gemini\u2019s <a href=\"https:\/\/cryptoslate.com\/bibox-officially-debuts-gemini-gusd-to-the-market\/\">fully regulated stablecoin<\/a>, or the launch of the <a href=\"https:\/\/cryptoslate.com\/bitgo-to-launch-regulated-custody-service-in-south-dakota\/\">first US custodian<\/a>\u2014a head-first plunge seems to be the only thing for it at this point.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Those waiting for institutional elephants to jump into the market\u2019s $200 billion paddle-pool may be in for a surprise; as market capitalization simmers barely above its October 2017 levels, it would appear that corporate \u2018smart money\u2019 has started accumulating vast quantities of cryptocurrency behind closed doors. According to Bobby Cho, head of global trading at [&hellip;]<\/p>\n","protected":false},"author":175,"featured_media":86998,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35,60205],"tags":[],"prediction_market_topic":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Report: Institutions Stocking Up on Cryptocurrency Behind Closed Doors<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/institutions-stocking-up-on-cryptocurrency-behind-closed-doors\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Report: Institutions Stocking Up on Cryptocurrency Behind Closed Doors\" \/>\n<meta property=\"og:description\" content=\"Those waiting for institutional elephants to jump into the market\u2019s $200 billion paddle-pool may be in for a surprise; as market capitalization simmers barely above its October 2017 levels, it would appear that corporate \u2018smart money\u2019 has started accumulating vast quantities of cryptocurrency behind closed doors. According to Bobby Cho, head of global trading at [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptoslate.com\/institutions-stocking-up-on-cryptocurrency-behind-closed-doors\/\" \/>\n<meta property=\"og:site_name\" content=\"CryptoSlate\" \/>\n<meta property=\"article:published_time\" content=\"2018-10-03T17:00:31+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-03-24T06:49:38+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/10\/otc-crypto-social.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Jonnie Emsley\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Report: Institutions Stocking Up on Cryptocurrency Behind Closed Doors\" \/>\n<meta name=\"twitter:creator\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:site\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Jonnie Emsley\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"NewsArticle\",\"@id\":\"https:\/\/cryptoslate.com\/institutions-stocking-up-on-cryptocurrency-behind-closed-doors\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/cryptoslate.com\/institutions-stocking-up-on-cryptocurrency-behind-closed-doors\/\"},\"author\":{\"@type\":\"Person\",\"@id\":\"https:\/\/cryptoslate.com\/author\/jonnie-emsley\/#person\",\"name\":\"Jonnie Emsley\",\"url\":\"https:\/\/cryptoslate.com\/author\/jonnie-emsley\/\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/cryptoslate.com\/author\/jonnie-emsley\/\"},\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/cryptoslate.com\/author\/jonnie-emsley\/#authorimage\",\"url\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2019\/10\/author-jonnie-emsley.jpg\",\"contentUrl\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2019\/10\/author-jonnie-emsley.jpg\",\"caption\":\"Jonnie Emsley\"},\"jobTitle\":\"Contributor\",\"description\":\"Jonnie is a writer and blockchain enthusiast based in Ho Chi Minh City, Vietnam. 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