Bitcoin ETFs and US Elections Drove Institutional Crypto OTC Trading to $39 Billion Daily

A new
industry survey has revealed significant disparities in crypto over-the-counter
(OTC) trading volume estimates. Some liquidity providers suggest daily figures
exceeding $100 billion, while the average estimate stands at approximately $39
billion.

Crypto OTC Market Averaging
$39B Daily, Survey Finds

The
findings come from an in-depth survey conducted by Finery Markets, which
targeted key industry stakeholders, including liquidity providers, market
makers, and prime brokers, to assess the institutional crypto trading landscape
for 2025.

“The
crypto market is already characterized by extreme fragmentation, with over 700
trading venues globally, as reported by CoinMarketCap. This proliferation of
trading venues has several challenges, such as connectivity issues, where
buyers and sellers often transact on different platforms, hindering efficient
matching,” noted the report, explaining why estimates varied by more than
tenfold among respondents.

Despite the
measurement challenges, the sector appears poised for continued growth. 18% of
respondents project year-over-year growth exceeding 100% in 2025, while 45.6%
expect more moderate growth between 10% and 60%.

The 2024 results are certainly fueling positive forecasts, as OTC trading volume has increased by over 100% in recent months, while transactions involving stablecoins have surged by nearly 150%. The newest survey
also revealed that 50% of industry experts reported OTC cryptocurrency trading
volumes experienced year-over-year growth exceeding 100% in 2024.

“The institutional surge came as no surprise to us, as we designed our trading infrastructure from the start to meet the needs of institutional players, anticipating wider adoption,” Konstantin Shulga, Finery Markets CEO and Co-Founder, commented for Finance Magnates.

AI Integration
Accelerating Across Trading Operations

Over 70% of
firms surveyed have already adopted AI-powered technologies in their
operations, with 54.6% planning to increase their AI spending by 5-30% in 2025.

Notably,
70% of respondents identified back-office functions such as settlements,
reporting, and repetitive tasks as AI’s most promising use cases, while 30%
highlighted front-office applications, including market data analysis and
cross-asset trading.

“AI has
enabled more sophisticated cross asset trading strategies in the crypto space,”
Finery Markets explained. “Execution-focused AI-driven systems can execute
complex arbitrage strategies across multiple exchanges and asset classes with
minimal latency, including market-making strategies to provide liquidity across
various crypto assets and exchanges.”

Institutional Adoption
Gaining Momentum

The survey
indicates that institutional involvement in cryptocurrency has moved beyond
exploratory interest, with 42% of institutional players now incorporating
digital assets into their daily operations.

Respondents
identified the Trump administration’s expected pro-crypto stance and potential
regulatory clarity in the U.S. as the most significant factors likely to drive
further institutional adoption.

“Crypto
ETFs and US Elections have been identified as the two most influential factors
driving institutional crypto adoption, with 70% of participants selecting each.
Interestingly, topics such as SEC charges against market makers, tokenized
money market funds, and Bitcoin halving were not chosen as influential events,”
the report added.

Geographically,
Europe leads demand for institutional crypto spot OTC trading at 38.5%,
followed by North America, Asia, and the Middle East, each at 15.4%.

4/ 🌍 Regulation & Market Structure – Leading jurisdictions like Singapore, Switzerland, and the UAE are paving the way with crypto-friendly regulations. Institutions are adapting to navigate compliance and operational risks. Find out how.

— Finery Markets (@finerymarkets) February 25, 2025

In a sign
of the industry’s increasing embrace of regulation, 92% of institutions plan to
secure additional crypto licenses in 2025. Survey participants identified
Singapore, Switzerland, and the United Arab Emirates as the most
crypto-friendly jurisdictions for institutional trading operations.

Hedging Strategies and
Market Infrastructure

Options and
futures continue to dominate hedging strategies in the OTC crypto market, with
66.7% of respondents favoring option-based approaches. However, 36.8%
identified low liquidity as a significant barrier to broader institutional
adoption of crypto derivatives.

The survey
also revealed emerging interest in innovative derivative products, including
instruments that would allow miners and stakers to sell their rewards at
volume-weighted average prices (VWAP) with settlement occurring after the
actual rewards are received.

As the
market continues to evolve, respondents highlighted several key trends shaping
the future of OTC crypto trading, including the increasing importance of
Central Clearing Houses (CCHS) in mitigating counterparty risks and the
potential integration of decentralized solutions into OTC trading as regulatory
clarity improves.

Will
Bitcoin Go Up Due to Higher Institutional Adoption?

Institutional
adoption has undoubtedly driven Bitcoin’s price surge in 2024, with the
cryptocurrency gaining 120% over the year. But what lies ahead in 2025? As of
Wednesday, February 26, 2025, Bitcoin is experiencing its third consecutive day
of losses, testing the $85,400 level—the lowest in three months and coinciding
with the 200-day EMA, a key indicator that has separated the bull and bear
markets for the past six months.

According
to my technical analysis, the $85,000 zone, along with the mentioned moving
average, could serve as a critical rebound level for BTC, a view also shared by
Markus Thielen from 10x Research.

Bitcoin’s Next Big Buy Zone Revealed!Bitcoin, MicroStrategy, on-chain data, liquidations, technicals, and more…👇1-11) Yesterday, Bitcoin dropped sharply, breaking below the critical $95,000 support level. We had previously warned about this key threshold in our December… pic.twitter.com/i6VNEyIKW5

— 10x Research (@10x_Research) February 25, 2025

Currently,
BTC is forming a bullish pin bar, a potential buy signal. A breakout above the
$90,000–$92,000 resistance zone would confirm that bulls were waiting to
accumulate. However, if the $85,000 level and the 200 EMA fail to hold, it
could indicate that bears are aiming for further distribution, potentially
driving the price toward $70,000.

Will
Bitcoin go up? It all depends on how the price reacts at this key support
level.

This article was written by Damian Chmiel at www.financemagnates.com.