As the cryptocurrency market matures, exchanges are rapidly developing advanced services tailored to institutional investors. This week, Coinbase launched a dedicated over-the-counter (OTC) trading desk, Huobi opened a cryptocurrency derivatives market in beta, and Nasdaq announced plans to launch regulated bitcoin futures in partnership with VanEck. These three moves underscore the industry's ambition to attract deep-pocketed players.
Coinbase Launches Dedicated OTC Desk
Coinbase has launched an over-the-counter (OTC) trading desk exclusively for its Prime members, which include hedge funds and other agency-level clients. The service went live earlier this month and allows high-volume clients to trade cryptocurrency via direct communication methods such as Skype, email, and phone—standard practice in traditional OTC markets. “We launched our OTC business as a complement to our exchange business because we found a lot of institutions were using OTC as an on-ramp for crypto trading,” said Christine Sandler, head of sales at Coinbase, in an interview with Cheddar. “We felt this was a huge benefit to our clients to actually leverage both our exchange and our OTC business.” Unlike some other OTC desks, Coinbase does not act as a counterparty in the trades it facilitates. The company plans to eventually offer delayed settlement and may integrate this with its custodial service.
Huobi Opens Crypto Derivatives Market
On Wednesday, Nov. 28, Huobi announced the beta launch of its cryptocurrency derivatives market, initially available in selected countries. The platform offers weekly and quarterly futures contracts enabling traders to buy or sell at predetermined prices, with leverage up to 20x. Huobi DM also includes investor protections such as a 20,000 BTC insurance fund against catastrophic security failures. “Cryptocurrency is a rapidly expanding and maturing market,” said Joshua Goodbody, General Counsel of Huobi’s Global Institutional team. “As part of that maturation, we see more and more sophisticated investors and traders from more established financial markets looking to gain exposure, including institutional players. At the same time, we think many experienced, successful cryptocurrency traders are looking for a broader range of investment tools than has traditionally been available. Huobi DM is tailor-made to address these sorts of needs.” The platform is not available to users from the U.S., Singapore, Israel, Iraq, Hong Kong, Cuba, Iran, North Korea, Sudan, Malaysia, Syria, Eastern Samoa, Puerto Rico, Guam, Bangladesh, Ecuador, and Kyrgyzstan.
Nasdaq Teams Up With VanEck on Futures
Just as crypto exchanges are courting institutional traders, traditional market operators are also crossing over. Nasdaq plans to launch regulated bitcoin futures-type contracts in the first quarter of 2019, in partnership with MV Index Solutions, a VanEck company with approximately $14 billion invested in its products. MV Index Solutions recently launched an OTC Spot Index. The collaboration was revealed by Gabor Gurbacs, director of digital asset strategies at VanEck/MVIS. This move signals that even established financial exchanges see growing demand for regulated crypto derivatives.
Together, these developments highlight a pivotal moment in late 2018: Coinbase's OTC desk provides a low-slippage channel for large block trades; Huobi's derivatives platform meets hedging and speculative needs; and Nasdaq's entry into bitcoin futures could attract traditional capital seeking regulated exposure. Despite persistent regulatory uncertainties, the emergence of institutional-grade tools is pushing the cryptocurrency market toward greater maturity and mainstream acceptance.