Crypto Traders Flock to OTC Markets as Exchange Liquidity Dries Up Amid Regulatory Clampdown

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Crypto traders are flocking to OTC desks to trade crypto after a regulatory crackdown has decimated liquidity on exchanges. Reporting by oknightcrypto.

Crypto traders are turning to over-the-counter markets to source elusive liquidity following a regulatory crackdown that has resulted in a substantial decrease in market depth on centralized exchanges.

The catalyst for this demand has been the sharp drop in market depth across exchanges. Market depth is a metric that measures liquidity by assessing how much capital would be required to move an asset in either direction, typically measured at a spread of 2%. "We've been receiving a lot more [OTC] demand," Woorton's Touag told CoinDesk."Spreads are tight due to daily recurring flow we have on both sides from payment providers, brokers and algorithmic traders."

 

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