Here at Token Metrics, we understand that our most valuable asset is you, our audience.
With your help, we have put together a guide to the Top 3 Crypto OTC Desks of 2020, as voted upon by you.
So sit back, relax, and enjoy the Moon Awards.
What is a Crypto OTC Desk?
An OTC desk in the crypto world operates much like an OTC broker in the stock market world as they are nearly identical. OTC stands for “over the counter,” and these brokers function as entities that allow users to buy and sell large amounts of crypto, typically any transaction over $25,000.
OTCs also offer a more private and personalized service to institutions and high net-worth individuals who need significant liquidity and privacy.
The primary advantage of using an OTC desk is its ability to handle large trading volumes without price slippage. Price slippage refers to the difference between the expected price of a trade and the price executed.
OTC traders can quote a strike price for the entire order block with immediate execution. In contrast, performing such a large trade on traditional cryptocurrency exchange will cause the token price to decrease due to a lack of buy orders.
An OTC desk can perform large trades in this way due to the desk’s high liquidity and network of buyers and sellers. The OTC broker is the one who brokers the transaction. The broker’s job is to locate and negotiate the price directly with prospective buyers and sellers. As a result, trades are not publicly listed so that the parties can maintain their privacy.
Top 3 Crypto OTC Desks of 2020
“Kraken OTC desk offers 24/7, one-on-one personalized services for over 35 cryptocurrencies. Designed for Institutions, their privacy features, and high liquidity volumes are second to none. Colombia is a big player in South America as most trades execute via Kraken, I would rate my personal experience a 10 out of 10.” – Diego Lara, Token Metrics Advisor
Coming in 1st place as the best crypto OTC desk with over 65% of the total vote is Kraken’s OTC service. This result comes as no surprise as Kraken provides one of the top crypto exchange experiences and is featured in our previous Moon Awards category as one of the Best Crypto Exchanges of 2020.
The Kraken exchange initially launched in 2013, but Kraken’s OTC services were not available until 2018. Kraken’s OTC desk provides an ideal and seamless experience for previous Kraken users as the office supports all cryptocurrencies available on their standard exchange.
The OTC desk supports over 35 cryptocurrencies, and you can find the full listing on Kraken’s website. The list contains various tokens while also covering the most popular ones, such as Bitcoin, Ethereum, Icon, and Monero.
With their OTC desk, Kraken also provides personal 1-on-1 service from the initial consultation through the trade execution. This level of personal service is also available worldwide, 24 hours a day, 7 days a week.
One of the most attractive features of the Kraken OTC desk is that it charges no fees for their OTC service.
There are requirements to us Kraken’s OTC desk, though, as users must have Pro level verification on the Kraken exchange, the highest level. Kraken’s OTC services also have a minimum trade size of $100,000.
2) Circle Trade
“Circle Trade was one of the original and the most respectable OTC service providers in the crypto space. It’s a shame to see them go, but I know their acquisition by Kraken will lead to even better OTC experience.” – Ian Balina, Founder and CEO of Token Metrics
Arriving in a distant 2nd place is Circle Trade, the former OTC desk of Circle. Started in 2013 by Jeremy Allaire and Sean Neville, Circle Trade was one of the oldest and largest OTC desks in all of crypto.
Circle Trade’s run lasted for just under seven years, and at its peak in 2018, Circle Trade alone handled over $24 billion in notional value. Then in early 2020, Circle sold Circle Trade to Kraken so that the company can spend more time focusing on their stablecoin USDC.
Circle Trade was fully absorbed into Kraken’s OTC services and has allowed Kraken’s OTC desk to bolster its offerings significantly.
With the acquisition, Kraken’s OTC desk now provides more global trading partners, deeper liquidity, tighter bid-ask spreads, and improved trader tools that streamline the OTC experience.
“FalconX is a sought-after crypto OTC desk for institutional investors. It has AI that plugs into many exchanges and dark pools to find the best prices to help users avoid slippages. Institutional investors traditionally do not like to invest in crypto because of all the wash trading. Hopefully, FalconX will give mainstream financial institutions the confidence they need to start investing in crypto. – Sam Monac, Head of Research, Token Metrics
Coming in 3rd place with 7% of the total vote is FalconX. Founded in May of 2018, FalconX is slightly different from the other OTC desks on this list as their OTC services cater exclusively to institutional investors.
While limiting itself from retail investors, FalconX has been immensely successful with institutional investors. FalconX clients include over 100 financial institutions, including hedge funds, proprietary trading firms, payment gateways, other OTC desks, crypto miners, and crypto exchanges.
In the past ten months, FalconX has generated $7 billion in trading volume at a quarterly growth rate of over 600%. FalconX attributes the success of its OTC services to its focus on providing the best price in seconds without price slippage. This ability is achieved mainly through their professional support team available 24 hours a day and 7 days a week.
FalconX has also raised $17 million in funding to date with the support of Coinbase Ventures, a crypto fund featured in our previous Moon Awards category.
It is important to note that FalconX’s focus on institutional customers puts their OTC desk out of reach for nearly all retail investors. FalconX’s OTC abilities are only available for those who have at least $10 million in AUM (assets under management).
Honorable Mention: Cumberland
“Cumberland has been around a long time in the OTC space and is another reputable OTC provider.” – Ian Balina, Founder and CEO of Token Metrics
After being just slightly edged out by FalconX, Cumberland is more than deserving of an honorable mention as top OTC desk. Founded in 2014 as a subsidiary company of the trading firm DRW, and has become one of the most well-known OTC desks in the crypto space.
Before the rebranding to Cumberland, the company was initially known as Cumberland Mining as the group had initially focused on crypto mining. Then in 2015, Cumberland began to experiment with trading cryptocurrencies.
Cumberland then began to grab headlines for their ability to win bitcoin auctions and reportedly bid successfully on 27,000 bitcoins in one of the final lots of bitcoins seized from Silk Road. Cumberland is estimated to have acquired roughly 70,000 bitcoins through similar auctions across the world.
As a result, Cumberland describes itself as “one of the largest liquidity providers in the cryptocurrency space.” Cumberland also offers over 30 cryptocurrencies and nearly 500 pairs for trading while being selectively involved in IEOs.
Cumberland offers OTC service to both institutional ran retail investors with a minimum trade order value of $100,000.
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