As Bitcoin (BTC) nears its all-time high, savvy investors are finding ways to trade without impacting the market price. Currently priced at around $72,300, Bitcoin is just shy of its previous peak of $73,798 from March, having surged nearly 14% this month, marking its strongest monthly performance since March.
A notable trend in this recent Bitcoin rally is the significant increase in over-the-counter (OTC) trading. OTC desks, which facilitate private transactions between parties without revealing details to the broader market, now hold approximately 416,000 BTC, valued at around $30 billion. This is a substantial rise from the average of less than 200,000 BTC seen earlier this year.
These OTC desks are particularly favored by institutions and wealthy individuals who wish to execute large trades discreetly, thereby minimizing their impact on market prices. This trend has contributed to Bitcoin’s relatively stable price movement over the past seven months.
With a considerable amount of Bitcoin available on OTC desks, U.S. spot-listed exchange-traded funds (ETFs) can make purchases without significantly affecting the market price.
Even recent record purchases by Bitcoin ETFs represent only a small fraction—about 2%—of the total Bitcoin held in OTC desks. This is a decrease from earlier this year when the share was between 9% and 12%.
Despite the steady balance of Bitcoin on OTC desks since early September, with only a slight decrease of 3,000 BTC recently, the dynamics are shifting. Daily inflows into these desks have dropped to their lowest levels this year, averaging around 90,000 BTC in October, which is a 52% decline compared to the first three quarters. For Bitcoin to continue its upward trajectory, a reduction in daily inflows into OTC desks will be crucial.
