In light of legal turmoil surrounding influential crypto exchanges, one Bitcoin enthusiast, Samson Mow, offers a fresh perspective: Bitcoin’s market extends beyond just these trading platforms.
As concerns about lawsuits against significant cryptocurrency exchanges rise, Bitcoin advocate Samson Mow provides an intriguing perspective. Speaking at the BTC Prague 2023 conference, Mow, the CEO of Jan3, hinted that Bitcoin’s trading landscape is far more extensive than just Binance, Coinbase, or similar exchanges.
“Bitcoin’s reach goes beyond any specific exchange. It’s challenging to quantify the full extent of Bitcoin’s market due to the prevalence of block trades,” Mow shared at the conference on June 9.
By invoking the term ‘block trades,’ Mow is referring to private channels where investors can discreetly conduct substantial Bitcoin purchases or sales. These channels include peer-to-peer (P2P) and over-the-counter (OTC) transactions, creating a kind of veil around Bitcoin trading, obscuring the total market size. If Bitcoin is predominantly functioning in the P2P realm, quantifying Bitcoin’s traded volume becomes challenging.
Mow’s insights reveal a critical aspect that many often overlook: P2P and OTC trading channels are not reflected in Bitcoin’s total trading volumes on major crypto tracking websites, such as CoinGecko. This omission implies that Bitcoin’s actual daily trading volume is much larger than the recorded $9.6 billion at the time of reporting.
“Bobby Ong, CoinGecko’s co-founder and COO, said CoinGecko only registers trades conducted on exchanges. It doesn’t account for transactions happening on P2P platforms or brokerages,” Mow added. Ong also indicated that CoinGecko currently has no plans to include these platforms in their tracking process.
Additionally, CoinGecko doesn’t include institutional trades made on OTC, according to Ong, further suggesting that the perceived trading volume significantly underestimates the reality.
Mow’s comments could indicate that powerhouse crypto exchanges like Binance or Coinbase might not control as much of the Bitcoin market as generally believed.
Earlier this year, Norwegian crypto research firm K33 Research, previously known as Arcane Research, reported that Binance was responsible for 92% of Bitcoin’s spot market in 2022. However, considering the undisclosed volume in P2P and OTC trades, the real picture might be vastly different.
Additional Information:
The critical insight that comes from Mow’s remarks is that the overall market for Bitcoin might be much larger than what the numbers on major exchanges show. This broader perspective could have implications for both retail and institutional investors.
For retail investors, understanding that the market extends beyond just the major exchanges is important as it highlights the different channels that exist for trading Bitcoin. This can be empowering, as it offers a greater range of options for trading and potentially unlocks more liquidity.
For institutional investors, it’s also essential to note that the volumes reflected on the exchanges do not necessarily represent the total activity in the market. Large transactions often happen off-exchange to prevent slippage. Therefore, the actual liquidity and market size might be larger than what’s apparent from the exchange data.
Moreover, the market dynamics of P2P and OTC trading may differ from exchange trading, and this could impact the price movements and volatility of Bitcoin. Hence, understanding these dynamics could be crucial for formulating effective investment and trading strategies.