Bitcoin exchange itBit recently launched a global over-the-counter (OTC) trading desk that can allow its customers to complete trades outside of its online order books. The five-person OTC service can facilitate transactions of 100 BTC or more with no additional broker or trading fees.
In addition, the bitcoin exchange will give the new users of this OTC feature $50 in bitcoin for completing their first trade. According to ItBit Institutional Client Group director Bobby Cho, the OTC service can appeal to large-volume traders who want to avoid trading slippage.
OTC Bitcoin Exchange Service
“Our incentive is to drive more transactions and more trading volume, and the end goal here is to bring price discovery to the OTC market so as a trader you can see volumes, but there’s also this separate OTC market that there is no data around,” said Cho.
He added that OTC customers will still need to go through know-your-customer (KYC) checks, which are also undergone by online clients. Cho is a former vice president at fellow bitcoin OTC trading services provider SecondMarket, which is now known as Genesis Trading and offers a different approach to bitcoin exchange trading.
Genesis Trading markets itself as the first regulated broker-dealer in the US to offer bitcoin trading. The firm offers clients various ways to invest in bitcoin and other digital currencies such as litecoin and ripple.
“We haven’t felt the competition yet, we know the bitcoin market is still young and large enough for multiple players involved, you want competitors to validate your business model,” Cho acknowledged. “I think competition is good and healthy.”
This new feature can allow customers to enjoy more options in trading bitcoin, especially since the cryptocurrency is gaining more attention ahead of the launch of the Winklevoss twins’ Gemini bitcoin exchange. However, the industry is still facing tight regulation after the implementation of New York’s BitLicense framework.