• Bitcoin’s OTC Desk balance declined sharply, which could constitute a key factor in this cycle.
• U.S. exchanges were holding nearly 1M BTC, contributing to a substantial sell-side liquidity inventory.

Over time, Bitcoin’s [BTC] price movement has been impacted by many factors, including market sentiment and institutional investment strategies.

A critical but often overlooked factor is the role of Over-The-Counter (OTC) desks.

How large players trade Bitcoin

OTC desks allow large-scale Bitcoin transactions to occur privately and with minimal market impact.

These desks are primarily used by institutional investors, enabling them to buy or sell large quantities of Bitcoin without causing substantial price slippage.

According to CryptoQuant, Bitcoin’s OTC desk balance was around 480k BTC in September 2021. Now, this balance has decreased to just 146k BTC, despite the king coin reaching $100k.

This steady decline reflects sustained institutional demand, which indicates the increasing use of OTC desks for large transactions.

The decline of OTC balances and its impact

Sequentially, the fall in Bitcoin held by OTC desks has substantial implications.

With only 146k BTC remaining, future large purchases will likely need to happen directly on public exchanges, which could influence prices more directly.

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Author: Clinton Otieno

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