In September 2019, two associates and I launched ValeoX, a Canadian Bitcoin OTC desk based in Quebec city. As OG Bitcoin enthusiasts, we felt the need to do our part to help crypto go mainstream 😉.
ValeoX offers personalized and private services to high net worth individuals and institutions looking to buy and sell bitcoins. Its a non-custodial platform licensed by FINTRAC and the AMF. Since the beginning of our operations, we’ve seen tremendous demand mostly from institutions looking to buy Bitcoin.
Why OTC Desk Are Getting Popular?
OTC trading has always been the method of choice for early Bitcoin investors and mining firms looking to sell large amounts of coins. Nowadays a lot of investors are willing to buy bitcoin on these platforms instead of exchanges because of the many advantages they provide:
A) Trading price is protected form the market fluctuations;
B) Only you have access to your funds after the trade is settled (ValeoX services does not custody assets on behalf of customers);
C) Your funds are safe from online hacking threat, maintenance/problems;
D) Buyers and sellers are able to trade large amounts in a single trade without slippage;
E) Trades are done privately using end-to-end encrypted messaging;
F) Usually there is no limits of the amount traded.
2019, a record year for institutions demand!
Grayscale announced that during the last 3 months of 2019 up to 26 000 Bitcoins was bought by people through their Bitcoin investment trust listed on the OTCQX. GBTC, which can only be bought by accredited investors and people through their 401k, is particularly popular among investors because of tax benefits and since it’s currently the only financial instrumental representing the cryptocurrency ecosystem on the stockmarket. Last year, a record of $600 million worth of BTC was bought from this trust, confirming the strong demand from large investors and institutions which represented 71% of the year’s inflow. Bitcoin value gained 95% in 2019, outpacing the S&P 500, which rose 29%, and gold, which advanced about 18%.
The main reason why institutional investors don’t have a big exposure to crypto yet has to do with bitcoin’s nature as a bearer asset and the fact that none of the traditional capital market infrastructure can handle it. The good news is that many countries like Canada, France are Germany have recently changed theirs laws for that matter.
Institutions still view Bitcoin as a speculative asset instead of a store of value, which lead them to buy instruments like GBTC instead of owning actual bitcoins on the network. I am confident that in the coming years institutions will finally understand the benefits of owning bitcoins on the network and thus OTC desks like ValeoX will be their port of entry.
If you have any needs in regards to OTC trading, you can reach us at email@example.com.