Institutional Crypto OTC Trading Doubles in 2024 Amid Trump Win and ETF Growth

Highlights

• Institutional crypto OTC trading volumes surged 106% in 2024, driven by pro-crypto policies and ETF launches.
• Bitcoin, Ethereum, and stablecoin trading saw significant year-on-year growth in Q4 2024.
• Altcoin OTC trading volumes grew, capturing a larger share of the market in 2024.

Institutional over-the-counter (OTC) crypto trading volumes doubled in 2024, marking a pivotal shift in the market landscape. According to Finery Markets, the surge was fueled by a pro-crypto administration following Donald Trump’s U.S. election victory and a growing appetite for spot crypto exchange-traded funds (ETFs).

Fourth Quarter Drives Unprecedented Growth

The fourth quarter of 2024 witnessed the largest jump in institutional crypto OTC trading. Bitcoin, Ethereum, and stablecoin trading volumes rose by 80%, 187%, and 191% year-on-year, respectively. This surge followed Trump’s election victory and his administration's favorable stance on digital assets, positioning the U.S. as a major player in the global crypto market.

ETFs and Institutional Shifts

The successful launch of U.S. spot Bitcoin ETFs in the second quarter further boosted OTC trading volumes, which grew 110% compared to the same period in 2023. Throughout the year, trading volumes consistently climbed, reflecting the growing adoption of private OTC trading channels over public exchanges.

Finery Markets attributed this trend to traditional finance (TradFi) leaders transitioning from skepticism to acceptance as the crypto industry matured. The data, collected from over 4 million spot trades on the Finery platform, highlighted contributions from market makers, payment providers, brokers, hedge funds, and custodians.

The Rise of Altcoins

Altcoin OTC trading volumes also experienced significant growth, increasing their market share from 13% in 2023 to 29% in 2024. This rise underscores a diversification in institutional interest beyond Bitcoin and Ethereum, with more players exploring alternative cryptocurrencies.

Opacity in the OTC Market

Despite its rapid growth, the OTC crypto market remains understudied. Finery Markets noted that its opaque nature and decentralized data make it challenging to gather comprehensive insights. However, the data that is available suggests an accelerating shift toward OTC trading as a preferred method for large-scale transactions.

Institutional Preferences for Privacy

OTC trading offers greater privacy and reduced market impact compared to public exchanges, making it an attractive option for institutional participants. The consistent increase in volumes throughout 2024 indicates a growing preference for these private trading avenues as the market matures and regulatory clarity improves.

The doubling of OTC trading volumes highlights the evolving dynamics in the cryptocurrency market. With altcoins gaining traction and institutional players embracing private trading, the crypto ecosystem is witnessing a shift in how large-scale transactions are conducted. The pro-crypto environment under the Trump administration and the success of spot ETFs have further solidified the role of OTC trading in the institutional landscape.

Institutional crypto OTC trading in 2024 demonstrated the sector's maturation and increasing alignment with traditional finance practices. The rise in altcoin activity and the steady growth in trading volumes underscore the expanding scope of digital assets in the financial world.