Crypto OTC trading volume surged over 100% in 2024, driven by Trump win and institutional demand: Finery Markets

The cryptocurrency over-the-counter (OTC) market matured significantly last year, achieving an annual growth rate of 106%, according to Finery Markets' 2024 Review. The report highlighted a dynamic year for institutional and large-scale digital asset transactions, driven by key macroeconomic and industry-specific developments.

These developments include the introduction of Bitcoin and Ethereum exchange-traded funds, the nomination of pro-crypto President-elect Donald Trump and the continued institutionalization of digital assets, among other events.

"Traditional financial leaders shifted their stance from skepticism to neutrality or acceptance as the industry matured, with institutions either entering crypto markets or planning acquisitions to establish market positions," the analysts wrote, highlighting the increasing pathways to "regulated market access" of crypto.

OTC trading refers to direct, off-exchange transactions between buyers and sellers, often facilitated by brokers or trading desks. This approach enables institutions and high-net-worth individuals to execute large trades with minimal market impact. Finery, the operator of the eponymous crypto "electronic communication network," collected its data from various market makers, payment providers, brokers, OTC desks, hedge funds and custodians, according to the report's methodology.

2024 quarterly performance highlights

The fourth quarter (Q4) of 2024 emerged as the standout period for OTC trading activity, with performance significantly outpacing all other quarters. "A post-election period, largely viewed as favorable for cryptocurrencies, is evidenced by strong performance in OTC trading," the analysts wrote. According to the report, total OTC volumes increased 177% year-over-year in Q4. 

"Q4’s growth was fueled by the election and subsequent rally in Bitcoin and Ethereum prices,” the Finery team noted. Bitcoin crossed the milestone $100,000 for the first time in early December. Top crypto trading firms noted at the time that OTC trading volumes had rapidly increased over the latter months of the year, often suggesting the U.S. election outcome was a key driving factor.

"Long story short, OTC is going gangbusters right now,” Tim Ogilvie, head of institutional at crypto exchange Kraken, told The Block in December. “Prices are up, but volume is way up," he said, noting the exchange's OTC trading volumes had risen 220% year-over-year with rival firms seeing a similar boost. 

Q2 2024 also saw strong market-wide performance in over-the-counter crypto trading volumes, achieving triple-digit growth at 110%, buoyed by the successful launch of spot Bitcoin ETFs. By comparison, OTC trading activity in Q1 and Q3 saw growth rates of 80% and 78%, respectively.

Finery also noted that 2024 was marked by increasing demand for stablecoins, which "solidified their market dominance as the primary bridge between traditional and digital finance." In Q4, for instance, crypto-to-stablecoin trading activity surged 311% year-over-year. The team said stablecoin transaction volumes "exceeded those of Visa." 

Expectations for crypto OTC trading in 2025

Several analysts think that the growth seen in crypto OTC markets will continue into the new year. For instance, Head of European Sales at BitGo, Brett Reeves, previously told The Block he anticipates the raised institutional demand will sustain, particularly for bitcoin and ether. "People believe the asset class is actually around to stay," he said, adding that the emergence of crypto ETFs "solidified" that position.

Finery Markets echoed this sentiment, highlighting a shifting landscape in U.S. politics that could pave the way for a resurgence of institutional crypto adoption. "Pro-crypto sentiment in U.S. policy and the economy opens the door to a more favorable environment for the digital asset sector," the report stated. "This could set the stage in 2025 for rapid mass adoption, driven by demand from U.S.-based institutions."

The report also speculated on the significance of Trump's proposed U.S. bitcoin strategic reserve, and how it could lead to a geopolitical shift in perceptions of digital assets. "A potential U.S. bitcoin reserve implementation could trigger global shifts as countries and corporations abandon zero exposure to crypto strategies," the Finery Markets' Review said.