Coinbase has entered the new age of technology by doing over-the-counter trading for the very first time through its tool known as ‘Coinbase Custody.’ This custodial tool has performed the OTC trading from the cold storage directly. This is a huge step in the field of trading. A blog was posted on March 13 which stated that once the OTC desk and Coinbase Pro were integrated the trading was done. This integration has allowed users to confirm and fix a price for the trade using the OTC desk before shifting the funds. When they were not integrated, the crypto assets needs to be removed from the cold storage prior to trading.
Sam Mclngvale, the CEO of Coinbase’s custody business said that they had been getting requests from custody clients from the time they had launched their OTC desk. He also added, “I think this will be the de facto way to trade.” Instant liquidity is provided to the users by this tool on their offline funds, which means that for the Custody users it will be less time consuming to gain access to their funds and the waiting time is eliminated.
The OTC desk was launched very cautiously by Coinbase in 2018 which was accessible only to licensed U.S. investors, and after some time, it was expanded to Europe and Asia. An explanation was given by Coinbase as to why integration was done, it reveals that it was done on demand from the users. The clients wanted to make the services to speed up, however, some of the traders did not want to remove the assets from the cold storage. Hence, the ideal solution would be to integrate both the products.
There are some misapprehensions when it comes to cryptocurrency custody solution, and four common ones were indicated by Brian Armstrong, Coinbase’s CEO and co-founder in February 2019. The explanation given discussed the assumption that in order to offer fast and flexibility needed to perform the trade is essential to have hot storage.
There is a service for prime brokers known as ‘Coinbase Prime’ which agrees on the price to do trading with their users and behaves like a broker organization and the trade is overseen. Following which the majority of big traders will choose to execute huge trades in the OTC markets.
