Topic: OTC Over The Counter BTC Trading? (Read 569 times)

Hi coming back to thread, are these big institutions buying bitcoins with USDT tether or straight up cash from their cash reserves?

From the bitcoin halving last year the max bitcoin we can mine per day 24hrs is around 900 bitcoins per day and that gets cut in half in 2024 to 450 per day.

Question is how these institutions are buying thousands of bitcoins in a day when the max is 900? Grayscale bought over 5000 bitcoins I believe today.

We are being told supply is running dry on exchanges and somehow they manage to get over 5000 bitcoins It looks like 1 miner is mining 900 x 7 days = 6300 btc's mined in a week then all sold to grayscale at the end of the working week. It doesn't make any sense.

When the narrative is supply is running out and people moving btc's off of exchanges for hodling then it sounds like these institutions must be buying directly from the miners off market?

China got half the hash rate meaning china selling 450 bitcoins daily to these mega institutions in the west

Isn't bitcoin about bringing banking to the poor in poor countries and isn't bitcoin suppose to be evenly distributed worldwide so there's a fair share of bitcoins for everyone who needs it instead of being gobbled up by the mega rich few? Bitcoin suppose to change the financial world right making if fair for everyone.


Somebody please try to make sense as it doesn't add up and if its done off market then who's running this pricing action where btc is consolidating?

Also what happen to those regular 'China Ban Bitcoins FUD' announcements I remember during the 2017 btc bull market to get btc down each time 30% cheaper corrections so they can buy it cheaper then continue the bull rally.

Wont we get any 'Ban Bitcoin Announcement FUD' in this 2021 btc bull rally so buyers can get btc cheaper? It always happens in a btc bull market 

Will Biden democrats ban Bitcoin this year so we can buy in at cheaper prices or are democrats cool with bitcoin?

What about the Counterparty Risk of buying BTC ETC paper contracts through for example GrayScale?

What if Grayscale don't have enough bitcoins to backup the btc paper contracts that they issued out to clients?

What if Grayscale becomes a btc bank and practices fractional reserve lending like most fiat banks do where they lend out bitcoin paper contracts that dont actually exist or some complex bitcoin derivative?

Who audits and verifies Grayscale Bitcoin Holdings?

I thought the true purpose of bitcoin is be your own bank so whats up with all these bitcoin institutions popping up now that can really damage bitcoin reputation and price if there was some scandal like the SEC case allegation against ripple xrp 

Coming back here with few more questions:

- During Silk Road operation on the Dark Web, how many bitcoins in total volume has been transacted on the dark web out of 21 million?

- All those big institutions that were buying huge amount of bitcoins, For example Microstrategy buying nearly 100,000 bitcoins. Out of that 100,000 btc how many originated from the dark web?

- Everyone saying that all transactions can be traced and tracked back to the root for Bitcoin on its blockchain meaning bitcoin is non-fungible. So can governments/exchanges/shops blacklist certain bitcoins that have been associated with a btc address found on the darkweb? Like for example websites blacklisting VPN servers so VPN doesn't work on those sites.

- OTC Bitcoin buying guarantees that the institutions are buying clean bitcoins hence institutions chose OTC?

Still don't understand how the big players getting huge amounts of bitcoins nowadays when there is suppose to be a btc supply liquidity crisis on exchanges now 

Okay there's brand new 900 bitcoins mined everyday so that's 6300 bitcoins available to buy per week if miners are not hodling.

Yet some rich dude named Elon Musk managed to buy around 39,500 bitcoins in a day. Whos supplying the volume? Big whales who hodl btc for 10+ years who bought tens of thousands of btc for pennies back in 2010?

In the fiat-crypto money flow representation, which has become widespread recently, we can see that the main share flow to Bitcoin and other cryptocurrencies belongs to US Dollar, Japanese Yen, and at the third place Tether.

Well its blatantly obvious now because were in a massive bull run now that everybody knows and is excited about.

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What about the Counterparty Risk of buying BTC ETC paper contracts through for example GrayScale?

What if Grayscale don't have enough bitcoins to backup the btc paper contracts that they issued out to clients?

What if Grayscale becomes a btc bank and practices fractional reserve lending like most fiat banks do where they lend out bitcoin paper contracts that dont actually exist or some complex bitcoin derivative?

Who audits and verifies Grayscale Bitcoin Holdings?

I thought the true purpose of bitcoin is be your own bank so whats up with all these bitcoin institutions popping up now that can really damage bitcoin reputation and price if there was some scandal like the SEC case allegation against ripple xrp 

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Also what happen to those regular 'China Ban Bitcoins FUD' announcements I remember during the 2017 btc bull market to get btc down each time 30% cheaper corrections so they can buy it cheaper then continue the bull rally.

Wont we get any 'Ban Bitcoin Announcement FUD' in this 2021 btc bull rally so buyers can get btc cheaper? It always happens in a btc bull market 

Will Biden democrats ban Bitcoin this year so we can buy in at cheaper prices or are democrats cool with bitcoin?

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From the bitcoin halving last year the max bitcoin we can mine per day 24hrs is around 900 bitcoins per day and that gets cut in half in 2024 to 450 per day.

Question is how these institutions are buying thousands of bitcoins in a day when the max is 900? Grayscale bought over 5000 bitcoins I believe today.

We are being told supply is running dry on exchanges and somehow they manage to get over 5000 bitcoins It looks like 1 miner is mining 900 x 7 days = 6300 btc's mined in a week then all sold to grayscale at the end of the working week. It doesn't make any sense.

When the narrative is supply is running out and people moving btc's off of exchanges for hodling then it sounds like these institutions must be buying directly from the miners off market?

China got half the hash rate meaning china selling 450 bitcoins daily to these mega institutions in the west

Isn't bitcoin about bringing banking to the poor in poor countries and isn't bitcoin suppose to be evenly distributed worldwide so there's a fair share of bitcoins for everyone who needs it instead of being gobbled up by the mega rich few? Bitcoin suppose to change the financial world right making if fair for everyone.


Somebody please try to make sense as it doesn't add up and if its done off market then who's running this pricing action where btc is consolidating?

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Hi coming back to thread, are these big institutions buying bitcoins with USDT tether or straight up cash from their cash reserves?

[moderator's note: consecutive posts merged]

OTC I once watch a video about it and if my understanding is correct,
OTC doesn't affect the price on the chart because the site took out the orders at the stated price of their costumer.
It still affect the supply I just think that they keep it low in the chart like how the government hides their kickback (LOL).
They would took out fresh order when and wouldn't show it on the chart or transactions.
I think they are doing it little by little so it wouldn't be obvious.

Investors are buying stock/shares of MicroStrategy because the company has a good fundamental that is its balance sheet now contain bitcoins that can save the company if investors and shareholders believe cash is inflationary and bitcoin is deflationary. That's why their share price is at all time high because of that belief of paper cash becoming worthless and bitcoins are worth its value because its a rare asset.

Tesla has a lot of cash on their balance sheet but no bitcoins however if cash becomes worthless then the company can die in a instant because you cant make tesla's with worthless cash paper money or pay employees with it. Of course robots will do the factory work for free but they require energy that isnt free and robots are not free to begin with.

The whole system is based on cash fiat because too much faith is backing it and its a self fulfilled prophecy cash is. If the $dollar index crashes to 0 then can people's faith in the dollar still bring it back to life even though its worth 0 like kids toy play money where we use our imagination and believe it has value?

Or maybe 'The Great Reset' is designed on purpose to destroy fiat cash resetting it to 0 then we move onto this new CBDC system that will not be based on Interest rates like the old system that the Knight Templars have created but instead like a real time system because everything is online nowadays where economic data is monitored live in real time and instruments can be adjusted in real time to influence the economy into either borrowing/spending currency economy or a saving currency economy or a social reward system where citizens get rewarded higher value CBDC's for emitting less Co2 or punished with less value CBDC's for producing more Co2. A CBDC that can have 2 different simultaneous values to it so no need for interest rates or inflation targets.

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Okay I looked into GBTC Grayscale Bitcoin Trust. Price per Share is around $32 now. How many Satoshis does $32 gets you nowadays and why is GBTC charging 25-30% premium over spot market price  ?

Why is Grayscale treating BTC like physical gold/silver where they require to charge a premium over spot to cover for storage vault fees, insurance and such? What the heck, bitcoin is digital that can be stored easily on a cold storage wallet where hackers cant access. Also private keys can be written down easily on paper so why such a huge premium for a asset like bitcoin that is so easy to hold yourself. Unlike gold where its hard to store and takes up space because its physical and hard to transport.

Also in the following link where do I go to see whether GBTC has increased or decreased their bitcoin holdings?:

https://www.otcmarkets.com/stock/GBTC/overview

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Stakeholders should be very careful and should closely follow the market as you can't expect that it will be the continuous gain all throughout. There will be stopping point or decrease of price in the market at some point, but we don't know when. Need to be careful these days.

there isn't some static permanently available amount of OTC bitcoins for sale. if a few investors buy up all the available coins on the OTC market (as grayscale, square, paypal, microstrategy, etc have been doing all quarter) then OTC demand will spill over onto exchanges and literally push prices up.

in fact, coinbase reported that microstrategy's orders were too large to handle OTC---they were also sourcing coins directly from exchanges. https://blog.coinbase.com/coinbase-is-helping-corporate-companies-diversify-with-crypto-444e8d91ebca

this is how institutions push price up. they use brokers who find liquidity at the best possible price, whether that comes from OTC desks, market makers, exchanges, or whatever.

There is no "faith that BTC" here.

People buy, people sell, people are doing business and monetizing. Not everyone is in crypto for HODL and other acronyms.
Many people see crypto as a modern way to achieve higher APY for their assets.

This is possible because share purchases don't mean an immediate bitcoin purchase.

It's not like there's a bot there trading every dollar they earn for bitcoin or exchanging invested money into bitcoin in real time.

That's even better though. If they're earning more money thanks to the bull market they become stronger as a company and more popular. A company that made a lot of money through bitcoin is going to raise interest among other companies.

Theres individual whales and theres institutions/hedge funds. Theres a huge difference between these two. One can afford the risk of btc crashing that is the big whale while the other entity that is institutions that have clients to look after that don't like to see their btc portfolios go down when btc crashes.

Institutions/hedge funds best interests is caring for their client portfolios or they will lose clients.

For example if MicroStrategy believe btc has reached an all time last new high before it crashes into a 3 year consolidating bear market then they will sell at that last high profiting their clients & shareholders otherwise risk losing their shareholders and clients.

MicroStrategy share price is at all time high because shareholders are buying their stock because of the bitcoin bullish market. MicroStrategy is making more money through their shareholders than bitcoin.

You agree?

If they sell/buy over the counter, there's no one or a few huge orders on the exchange that could trigger big price changes. If the price is unaffected by this stuff, why do you still say that we need to know early indicators of this happening because the price might crash? And it's actually often the rich wallets that keep hodling through the hard times because if they have tons of BTC, they probably believe in it, and they can afford to risk and to wait. Small hodlers who just bought some BTC and wanted to get rich, but are now losing money, engage in panic selling. I still don't believe the "whale manipulation" narrative tbh.

Thanks for the links.

Great can you show us in the Grayscale Bitcoin Holdings of btc positions that have been increased or decreased at what dates. What data are we suppose to look at in that GBTC link?

You can get trade data and charts for OTC market on the site: https://www.otcmarkets.com

If you want to get chart and trade data on Grayscale, please use this link: https://www.otcmarkets.com/stock/GBTC/overview
The site gives the table and you can export it to Excel.

You think that the big institutional investors, hedge funds, the big players with big money that supposedly driving this bull market price with OTC trades that doesn't register on the market price will sell at $30k?

I asked the same question over & over again but no one is giving a clear answer, that is whether OTC trades or trades done on prime versions of exchanges like Coinbase Pro Prime only for big pocket investors not retail investors like us register on the market price pushing the price up? If NO then who is driving the price of BTC up, is it us retail investors?


If NO to above question then how do we know these big pocket players are exiting or selling their btc's they recently bought if their buying in the 1st place doesn't register on the market place? If buying doesn't register on the market price then selling wont either

That's the 1000 BTC question isn't it ?

First I would think the price would have to move one way or the other. These people didn't enter to make small gains, and on the opposite they probably can tolerate the price going quite a long way down. So I wouldn't worry about them selling until the price is quite higher, at the very least 30000$. But that's just a feeling.

What indicators will we see if these big new players that entered the btc game have sold their bitcoins later on?

I'm just going from what DdmrDdmr said upthread about what MicroStrategy said they did, I have no insight on how these "prime" exchanges work. It would be interesting to know the answer, if indeed they're completely separate exchanges, then people on there know what's going on before the rest of us, and can probably act on mainstream exchanges to profit.

If we refer to the principle of annual finance, what happens is the movement of bitcoin with certainty of decline due to annual withdrawals, of course we cannot just let go of this because the bitcoin base itself is also financial so I think it is unlikely that this will happen from this concept.

The next possibility is a disaster that allows digital problems to occur, such as hacking that can happen at any time. Of course, it will have an impact if people or large exchanges are being hijacked so that the market influence will also fluctuate.

I know case when one company was buying a lot of bitcoins from miners and in this case, it was BitFury if I am not mistaken.

OTC transactions will affect bitcoin's price but wait, it's not direct impact that it has but the psychological one. When "Joe" reads on website that PayPal is interested in bitcoin and hears that omg, PayPal buys thousands of bitcoins, then Joe will think that oh, if PP buys bitcoins, it means that price will rise. At least, the major payment service provider is interested in it, this should have a huge positive impact on bitcoin's price. And then Joe starts to sell bitcoin in high price while PayPal will have their own agreement with providers and price and negotiation will be different from real one.

Okay you think these big institutions are not using OTC but instead are using prime Versions of Exchanges like Coinbase prime, Binance Prime to break a big order into 1000's of smaller orders that is spread over days to get the order filled by us retail sellers?

But are we retail sellers on the prime versions of exchanges to fill these institutional buy orders?

If they break a big order into 1000's of smaller buy orders then why cant they do it on a normal exchange that we retail investors use? Its confusing.

Is there a cross-platform compatibility for orders on either of these exchanges that is both prime & non-prime? For example a big institutional buy order on prime will get filled by 1000s of smaller retail sellers on the normal non-prime exchange?

Lastly will mega rich institutional buyers ever use decentralised exchanges if theres lots of liquidity on there?

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Okay coming back here how do we know when Hedge funds and the big institutions start selling their bitcoins holdings? If its sold over OTC then that wont register bearish on the bitcoin market price right?

What indicators are there to see whether we know these big players have self off their 1000s of bitcoins? I'm talking about early indicators not articles in the wall street journal where that is a late indicator and by then btc price is already crashed. Best to sell before the crash.

These big players wont HODL even when btc crashes otherwise their rich clients will get angry at them and they could lose business & their clients right?

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Pure OTC can't affect the price. Moreover such deals don't make the news so even indirectly there can be no effect. Of course the people involved (selling or buying) might also be trading directly on the markets, so they might do something on the markets that only makes sense because of that OTC trade they made.

For example a whale sells 1000BTC OTC at a price of 10000$, then the price drops quite a bit and he decides to buy back, noone is ready to sell him 1000 coins back OTC, so he will buy on exchanges and make the price go up again.

In the case of the mega-rich institution like was said upthread the deals were not made OTC in the end, because they were too big, so instead they used thousands of orders, as if there were hundreds of people trading. This would potentially move the price, but just like whales use strategies to pump and dump, it's possible to use the opposite strategy to "not pump".

Okay with that Coinbase Prime example explained above:

- These OTC buy orders or exclusive buy orders for the mega rich institutions that have a Prime account (Not Amazon Prime) does not affect the market price on the retail side? So a $0.5 Billion buy order for Btc on CoinbasePrime.com wont affect the market price for retail Investors on Coinbase.com?

- If these big institutional buy orders is not affecting the market price, so its the retail investors hearing the institutional buying who are FOMO from this and buying btc causing the market price to near $20k?

So to confirm its the retail investors pushing the market price up to near $20k now because retail investors are now hearing institutional buyers are buying now correct?

Big Institutional buyers are not affecting the market price?

the ideal is obviously direct order matching among OTC clients. this was a truly massive OTC order so that was impossible, of course. i'm sure any OTC desk would have done it the same way, with complex order algorithms across many exchanges/brokers to prevent slippage or moving the market too much.

i suspect the vast majority of OTC trades (on coinbase, kraken, bitfinex, etc) are closer to the low 6-figure - low 7-figure USD range. in those cases, direct order matching is more likely possible, so that spot prices are literally unaffected.

As far as I know OTC trading desks do specialize in providing liquidity from multiple sources when an order is entered in their records. It is a commission-based model as any other conventional broker. Not too versed in the OTC environment so this is more like a guess than a certain thing.

It might be an association of whales. A well known krypto guy I can't remember the name of was saying he controlled something like 240000 BTC, pooled from several people.

For them it might make sense to trade OTC, or maybe a combination : sell OTC in big chunks, buy individually/have fun trading when the price is lower to reconstitute their stash.

There could be an advantage regarding tax authorities : having your sales made by a well identified company, at a certain price, makes it more "legit".

without these whales, these institutions couldn't buy bitcoins OTC.
without these institutions, bitcoin won't get the positive sentiments on this Q4 2020.
without these positive sentiments, the bitcoin price won't go up.
with the bitcoin price go up, these whales will get the benefit because I believe they still have a lot of bitcoin in their wallet.
they increase the value of their portfolio while cashing their bitcoin at the same time

No I never said that. Firstly Bitcoin transactions are pseudo anonymous, so unless a company chooses to go public about their bitcoin holdings we probably wouldn't know about it. There is no guarantee that other public companies are not stacking up their portfolio.

I should have mentioned that  technical analysis and fundamental analysis are not mutually exclusive.

Also, I only tried to explain how such buys can influence the market sentiment without causing huge price swings during the purchase. It's impossible for buys like that of microstrategy which is about $4.7 million to not factor into a bull run long term (there are about a dozen of other cooperations publicly known to be purchasing as well).
Retail investors influence is still present, but big institutional money is also heavily present now and growling rapidly, this is surely not a repeat of 2017.

Thanks DdmrDDmr, good link, I knew I had read somewhere that Microstrategy had bought BTC a bit like you and me do, not OTC, as for an OTC trade you need people on the other side of the trade ready to sell to you, quite difficult for such amounts.

Microstrategy’s first 425M$ BTC purchase was made through Coinbase Prime, creating over 200.000 orders to fulfil the purchase in full, in what seems like a complex operation that routed the orders both over exchanges and other venues, controlling the flow of orders in time, to obtain the best available market prices, whilst trying not to infer in the price (which large buy chunks may have caused).

Not sure how OTCs manage large orders, but the above strategy I figure was well studied (while lacking disclousure of concrete details).


See:
https://news.bitcoin.com/coinbase-brokered-microstrategys-influential-425-million-bitcoin-buy/
(link to pdf with case study within the above reference)

Yeah maybe they aren't directly buying Bitcoin into an exchange platform but it is highly likely they are still buying from exchanges that have OTC option for institutional investors like Coinbase. Because I don't think we will see a lot of whales that have this kind of service where they will sell directly their Bitcoins to other people. Them going to an exchange I think will also be more simple for them legal wise buying onto a official crypto-related business rather than someone who just holds a lot of Bitcoin.

When you say custodians do you mean like a paper holding? Like buying Gold ETC's instead of holding the real physical gold? Are these custodians vaults audited to see how much asset they really have before they issuing those paper IOU's?

What scary about this is what if these bitcoin banks and institutions start providing loans in btc paper contracts where there is regulation like a fractional reserve where they can lend out 10 btc's to every 1 btc they hold like the current banking system that already screwing us with.

Theres only 21million btc's out there so how do we stop lending btc's in the lending market where they could 121million btc's (10x) in circulation out there loaned like the fiat system we have.

Once bitcoin is regulated and gets government approval they will be bitcoin banks and bitcoin institutions that will do these shady practices with btc that can ruin the coin.

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So basically your saying its the retail investors again that pushing the price of btc to near $20k now because they get all hyped up and FOMO from hearing the news that big institutions are buying BTC's now?

So were looking at Dec 2017 all again followed by another 3 year bear market because there is no big institutional buying in the technical analysis this time?

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Over the counter trades are not registered on exchanges and as such cannot influence price swings caused by buy and sell orders, hence it does not have an immediate impact on the price. It could however impact the market overtime if it becomes public knowledge and happens regularly, as is the case now.
There are two types of analysis that goes into trading:
• Technical analysis, and
• Fundamental analysis.

The first one focuses on changes in charts and market activity while the second highlights all other factors of the asset; halving activity, adoption rate, limit in supply, improvement proposals etc.
Big institutions buying into Bitcoin would be a factor in the fundamentals of Bitcoin, which raises public interest and demand along with it, even though the transaction did not happen directly through exchanges. This means more people would want to buy Bitcoin because companies like microstrategy and square are buying and also PayPal is integrating BTC into their protocol.

Exchanges have options for OTC trades. Some miners also sell Bitcoin rewards which they get.

I doubt this. I would expect there would even be a premium on newly mined coins.

Usually, there are funds that provide bitcoin holdings at the institutional level. For example, Grayscale and NYDIG are one of them. They are not OTC they just serve as custodians to those coins. OTC is for the personal use of individuals. OTC is like buying cryptocurrency from an intermediary person. They make available those cryptocurrencies for you.

What you guys mean whales could risk their bitcoins through backdoor trading? Are OTC's regulated and also why most penny stocks are offered via OTC's?

The main question is are these big institutions that buying bitcoins now in huge amounts via OTC, does OTC big bitcoin trades affect market price of btc?

If OTC doesn't affect market price then who is buying bitcoins to push up the market price to near $20k now if institutional buying doesn't affect market price as its off the books right?

Lastly who is selling btc to institutions like paypal, microstrategy on the OTC desk if you guys say anonymous whales wont sell this way?

Can institutions get a discount buying bitcoins in bulk that is cheaper than market price on the OTC desk?

PayPal wouldn't risk buying from OTC that doesn't have proposal legal backups because of fear of fraud, scam and theft. I believe coinbase has a large OTC model where PayPal can buy directly from. No individual whale would risk his/her BTC through back door trading.

Yes, coinbase offers OTC method when buying and selling bitcoin, same with gemini. So I'm pretty sure paypal buys bitcoin through to large exchanges such as mentioned above.

Coz there's no anonymous whales in their right mind will undergo on some selling process to this large business such as paypal, coz business will only deal to business with paper works, contracts and etc.

To get liquidity you need to trade. Sell and buy.

Maybe you want to cash out at a certain preset price or maybe you just want more cash... 19k is 19k if you have a few thousand btc. Dropping it now might be easier than trying to get someone to buy your coins at 200k or 1mil in a few years (assuming we go higher)...  A bird on the ground is worth 3 in the bush and 9 in the sky..

Just to confirm big institutions like MicroStrategy, Paypal etc. are buying 1000's of Bitcoins not off exchanges like Coinbase where the small retail investors go, but they buy over OTC?

How are they buying 1000s of BTC when there is a shortage in BTC everyone claiming?

Just to confirm OTC trading does not affect or move the market price no matter how big the transaction is?

Who are the whales that have 1000s of BTC dumping selling it on the OTC desk? Why these whales don't have faith that BTC will go higher than 20k?