ItBit has launched its Global OTC Agency Trading Desk, a new, five-person over-the-counter (OTC) trading service that allows customers to complete trades outside its online order books.
The trading desk will facilitate transactions of 100 BTC (roughly $28,000 at press time) or more with no broker or trading fees. As part of a limited promotion, new users will also receive $50 in bitcoin for completing their first trade.
ItBit Institutional Client Group director Bobby Cho noted that the new product aims to appeal to large volume buyers who want to avoid exchange slippage, whereby their purchase moves the price of the market.
A former vice president at fellow bitcoin OTC trading services provider SecondMarket, now Genesis Trading, Cho suggested that the services could compliment one another given their variances in approach.
Cho told CoinDesk:
“They’re a broker dealer, we don’t take positions. They may buy or take a position. Our incentive is to drive more transactions and more trading volume, and the end goal here is to bring price discovery to the OTC market so as a trader you can see volumes, but there’s also this separate OTC market that there is no data around.”
Cho specified that OTC clients will need to go through know your customer (KYC) verification, though this process will be same as for online-only clients.
The new product further comes amid a time of increasing activity in New York’s bitcoin sector following the passage of the BitLicense and ahead of the expected launch of the Winklevoss Capital backed exchange Gemini.
Still, Cho sees the services being able to coexist given what he characterized as the expanding market for bitcoin.
“We haven’t felt the competition yet, we know the bitcoin market is still young and large enough for multiple players involved, you want competitors to validate your business model,” Cho said. “I think competition is good and healthy.”
Trading image via Shutterstock