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What CoinDCX’s OTC desk facility means for cryptocurrency traders in India

The last week has seen several announcements in the crypto ecosystem ranging from mutual fund-like products to Bitcoin ETFs.

Institutional investors in India can now use CoinDCX’s OTC (over the counter) desk facility to execute bulk orders for cryptocurrencies like Bitcoin, among others, as per a press release by the cryptocurrency exchange. The service will allow investors to purchase or sell their crypto assets at a particular price without getting bogged down by volatility triggered by market forces, the company added.

CoinDCX co-founder Sumit Gupta explained that the average ticket size for such services starts at investments above Rs 30 lakh. “This segment is more concerned about price certainty and wants to minimise slippages,” Gupta said in a statement.

Crypto adoption in India is witnessing a massive upsurge as the country now has the largest number of crypto owners in the world. The new investment facility by CoinDCX is only a sign of the growing appetite among wealthy Indian households and businesses to dabble in cryptocurrencies. It indicates that cryptocurrencies will soon be going mainstream in India. 

What is an OTC facility? 

An OTC desk aids trades which are not possible on exchanges, Economic Times explained. It is usually opted for in cases of assets not being listed on exchanges at all, the business daily added. 

The desk doubles up as a dealer for anybody looking to trade a given asset, ET said. “If the order is large, a trader may choose to trade “over the counter” to minimise market-related risks,” read the report. 

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The company said that the facility will supplement CoinDCX’s existing trading platforms — CoinDCX and CoinDCX Pro. The facility is set to expand the cryptocurrency exchange’s trading volume, it added.  

How will traditional financial instruments impact cryptocurrencies? 

The last week has seen several announcements in the crypto ecosystem ranging from mutual fund-like products to Bitcoin ETFs signalling a shift in the trajectory of mainstream acceptance for cryptocurrencies. These are financial instruments which are usually found in the matured stock markets and their introduction augurs well for investors.

Coin Sets: An investment vehicle by Mudrex, a US-based crypto asset management platform, provides retail investors a chance to invest in cryptocurrencies in the style of mutual funds. The newly-launched ‘Coin Sets’ will allow investors to invest in a basket of crypto tokens based on different themes. For example, the coin set named ‘DeFi 10’ will include top 10 DeFi tokens whereas the ‘NFT’ coin set will be a basket of the top NFT projects.

Bitcoin ETF: Bitcoin futures ETF (exchange traded fund) launched this week amid much fanfare after the US Securities and Exchange Commission (SEC) gave its tacit approval to an application by ProShares. The new fund, traded on the New York Stock Exchange under the ticker BITO, hauled in $570 million of assets on its first day and racked up $1 billion of trading volume, ranking it among the most successful launches of all time.

March of cryptocurrencies in India

India has ranked second, among 154 countries, in global cryptocurrency adoption according to the 2021 Global Crypto Adoption Index by Chainalysis, a blockchain data platform. According to the report, there has been an increase in the adoption of cryptocurrency globally by 881 percent in the last year and by 2300 percent since the third quarter of 2019. 

Another report by Chainalysis revealed that large institutional-sized transfers above $10 million worth of cryptocurrency represent 42% of transactions sent from India-based addresses vs 29% for Vietnam. The data provided in the report explains why CoinDCX would move to introduce an OTC desk in India. 

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