Wintermute reported a 240% increase in OTC institutional cryptocurrency trading in 2024

Cryptocurrency trading company and market maker Winterkmt recorded 240% year-over-year growth in traditional finance companies’ activity on the over-the-counter (OTC) trading desk, according to a Jan. 17 report. a report.

Traditional financial institutions will play a pivotal role in reshaping OTC trading in 2024. The report cited improved regulatory clarity and evolving policy frameworks as drivers of trust for these institutions.

The report highlighted Important drivers, including US Securities and Exchange Commission (SEC) approval of spot bitcoin (Bitcoin) exchange-traded funds (ETFs) in January 2024 and a pro-crypto president elected in the US in November.

Preference for confidential trades

Counterparty volume data from Wintermute revealed that retail brokers also saw a growth rate of 549%, reflecting broader institutional interest.

The significant increase in trading volumes by institutional players can be attributed to the increasing demand for over-the-counter liquidity. Wintermute’s OTC desk saw volumes grow 4.13x compared to the previous year, driven by counterparties seeking to place large trades without significantly impacting the market.

The demand is consistent with institutions’ preference for efficient and confidential trades that avoid capital inefficiencies associated with holding assets on exchange platforms. led preference Wintermute’s OTC volumes will hit new milestones, surpassing the previous weekly record of $2 billion in 2023 with single-day volume of $2.24 billion in November 2024.

Focus on memecoins and challenges

Traditional financial institutions have also shifted their focus when it comes to preferred assets. While major cryptocurrencies saw a 3% decline in trading volume, alternative sectors such as “memecoins” and “coin networks” gained traction.

Memecoins recorded 210% growth, accounting for 16.2% of Wintermute’s total OTC volumes, up from 7.3% in 2023. This reflects the desire of institutional investors to explore higher-risk assets for additional returns.

Notably, the report noted that as traditional financial institutions strengthen their presence in the OTC market, native crypto companies face increasing pressure.

The entry of well-capitalized players with access to scale and competitive prices has put pressure on smaller competitors. The decline in the market shares of companies operating in the field of cryptocurrencies indicates intensifying competition, with institutions leveraging their resources to dominate this field.

mentioned in this article