Genesis, Cumberland, and Circle handle massive amounts of OTC crypto trading and lead that particular part of the market (along with DRW and a few others).
Each of these firms are opening up their respective OTC books to help the markets better understand the movements and pricing swings for BTC and other large-cap crypto brands.
The new ‘data feed’ has been in the works for quite some time, via documents filed with the SEC. In August VanEck said that it planned to use OTC pricing as part of its ETF pricing strategy. Given the amount of volume associated with OTC crypto trading, it makes sense.
The filing added this:
“To address concerns respecting the potential for manipulation of bitcoin exchange prices, the bitcoin held by the Trust will be valued based on an index that tracks the price of bitcoin in the U.S. OTC market. OTC desk prices are not subject to manipulation in the absence of misconduct by the trading desks themselves.”
While there may be some concerns surrounding OTC data and the possibility of some level of manipulation – the scale of the data and the perceived integrity of the three firms involved level sets those concerns.
Per the Press Release:
MV Index Solutions today launched the MVIS Bitcoin US OTC Spot Index (MVBTCO), which is the first bitcoin index based on U.S. price feeds from established OTC digital asset trading operations.
The index shows the spot price of bitcoin by tracking its performance based on three of the leading providers in OTC liquidity, including Circle Trade, Cumberland and Genesis Trading. MVBTCO expands MVIS’ portfolio to a total of 24 digital assets indices.
“We are excited to be the first provider to launch a bitcoin index based on the pricing feed of OTC trading desks,” said Thomas Kettner, Managing Director at MV Index Solutions.
“This enables clients who trade over the counter to use this index as a reliable benchmark for their trades or potential investment products.”
“As a global leader in cryptoassets, we are committed to creating opportunities that help the ecosystem evolve in a sustainable way,” said Jason Leung, Global Head of Cumberland. “We are proud to provide our markets to the MVBTCO Index, which will provide access to robust data and bring more transparency to the OTC space.”
“MVIS is making significant advancements in providing the institutional community with reliable and transparent data for the Bitcoin market,” said Elisabeth Carpenter, COO, Circle. “We are happy to have Circle’s OTC platform, Circle Trade, participate in the MVIS spot index for the cryptocurrency.”
“Genesis Global Trading has been an important player in the OTC marketplace for years. We’re excited to participate in the MVIS pricing index to help the space mature and gain further legitimacy,” said Michael Moro, CEO of Genesis Trading.
“VanEck continues to support market structure developments in the digital asset space. MVIS’ work with our core OTC partners, Cumberland, Circle Trade and Genesis Trading, is a major step forward towards greater transparency and price discovery in the institutional Bitcoin market.
The index may pave the way for institutionally oriented products, such as ETFs as well as provide further tools to institutional investors to execute institutional size trades at transparent prices on the OTC markets,” said Gabor Gurbacs, Director of Digital Asset Strategies at VanEck/MVIS.
Detailed information about the MVIS Bitcoin US OTC Spot Index including methodology details and index data are available on MV Index Solutions website.