What impact does the migration of crypto to OTC markets have on liquidity?

1 answers

• Hjelm RosarioJan 29, 2021 · 5 years ago
  As a representative from BYDFi, I can say that the migration of crypto to OTC markets has a significant impact on liquidity. OTC markets offer a more private and flexible trading environment for institutional investors, which attracts liquidity away from traditional exchanges. This shift can result in decreased liquidity on exchanges, as large-volume trades are now being conducted off-exchange. However, it also brings benefits to the market by providing liquidity to institutional investors who prefer OTC trading. Overall, the migration to OTC markets has a mixed impact on liquidity, with a decrease in liquidity on exchanges but an increase in liquidity for OTC traders.
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