Australian digital currency exchange operator Independent Reserve has launched an over-the-counter (OTC) trading desk for institutional investors looking to make large digital currency trades.
The OTC desk will open for business on 19 March and the cryptocurrency exchange said it has already seen strong interest from financial institutions ahead of the launch.
The lack of block trading venues for cryptocurrencies such as Bitcoin has acted as a barrier for institutional investors seeking entry into the digital currency landscape, according to CEO of Independent Reserve, Adrian Przelozny.
“Digital currency markets are just like any other asset class, in that when the market sees a big trade coming through it will move the price against whoever is making that trade,” he said.
“In equity markets they solve that problem with dark pools and sales trading desks, but there is no digital currency equivalent in Australia as yet. By establishing an OTC desk with sales traders we’re able to connect institutions with one another, so they can trade without moving the market or getting price slippage.”
To support the launch, the cryptocurrency exchange has hired equity and fixed income derivatives trader Tobias Abbey to lead the launch and development of the OTC desk.
“Tobias is a highly experienced trader with over a decade of experience in global physical and derivative financial markets, as well as being a leading figure in the Australian and Asian digital currency markets,” Przelozny said.
He added the combination of order book and OTC has been a trend in the market, citing the recent $400 million merger between Goldman Sachs-backed crypto start up Circle and digital token exchange Poloniex.
The Australian cryptocurrency market has grown significantly following a surge in the price of Bitcoin and other digital currencies. However, institutional uptake of the asset has been slower in Australia compared to other countries.
Przelozny concluded he expects this will change as more efficient cryptocurrency services are brought to the market.