Wintermute, a prominent crypto trading firm and market maker, has reported a remarkable 240% annual growth in activity from traditional finance firms on its over-the-counter (OTC) trading desk. This data was revealed in a recent report published on Jan. 17, which can be found here.
In 2024, traditional financial institutions played a significant role in reshaping the OTC trading landscape. Factors such as improved regulatory clarity and evolving policy frameworks have instilled confidence in these institutions.
The report highlighted key drivers behind this growth, including the approval of spot Bitcoin (BTC) exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC) in January 2024, as well as the election of a pro-crypto president in the US in November.
Preference for discreet trades
Wintermute’s data on counterparty volumes also revealed a substantial 549% growth rate among retail brokers, indicating a broader institutional interest in the market.
Institutional players are increasingly seeking off-exchange liquidity, driving a surge in trading volumes on Wintermute’s OTC desk. This demand stems from the preference for efficient and discreet trades that avoid the capital inefficiencies associated with on-exchange platforms.
The focus on discreet trades has propelled Wintermute’s OTC volumes to new heights, surpassing previous records with a single-day volume of $2.24 billion in November 2024.
Focus on memecoins and challenges
Traditional finance institutions have shifted their focus towards alternative assets such as “memecoins” and “currency networks.” While major cryptocurrencies experienced a slight decline in trading volume, memecoins saw a significant 210% growth, capturing a larger share of Wintermute’s total OTC volumes.
The report also highlighted the increasing pressure faced by crypto-native firms as traditional financial institutions solidify their presence in the OTC market. Well-capitalized players with access to scale and competitive pricing are squeezing out smaller competitors, leading to a decline in market shares for crypto-native firms.
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