Wintermute’s new report, a market maker and liquidity provider said its OTC volume had increased 400% over the course of the year, as more volumes were traded off exchanges.

Wintermute reported that its OTC volume declined during the first half 2023 while the number individual trades remained constant. The number of trades increased six-fold in the second half of 2023, to 29 millions, while the weekly OTC volume reached $2 billion.

“The changes in the industry at the end 2022 have left a very challenging outlook for the entire industry.” The report stated that the markets slowed, liquidity dried up and volumes started to shift away from exchanges and towards OTC.

In cryptocurrency trading, liquidity refers to the ease with which large orders can executed without affecting market prices significantly. Large trades are more likely to affect prices if there is not enough liquidity.

Lack of liquidity was a constant challenge for exchanges in 2023. This led to many large institutional traders moving to OTC desks.

CoinDesk reports that despite the fact that bitcoin has risen by more than 150% in the past year, there is still a liquidity problem.


The 0.1% depth of the market on major exchanges was a measure of liquidity. (Kaiko) (Kaiko)

Binance, which is the largest crypto exchange in the world, has had some difficulties with liquidity. The available liquidity in its order books dropped by 25% in the month of November. This was compounded by the $4 billion settlement reached with U.S. officials and the resignation of the CEO Changpeng “CZ” Zhao.

Parikshit Miishra is the editor.