Bitcoin OTC Deals Can be Tracked…Sort Of

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  • Bitcoin OTC deals are intentionally conducted in private, making them hard to track
  • Crypto Quant CEO Ki Young Ju has highlighted three metrics that can help identify OTC buys
  • Ju outlined his three metrics in a recent Twitter post

Over-the-counter (OTC) Bitcoin deals are designed to be conducted almost in secret, ensuring that the deal doesn’t impact the market and the deals are done discreetly, out of the gaze of third parties and competitors. However, there may be a way to track Bitcoin OTC deals according to Crypto Quant CEO Ki Young Ju. Ju posted a Twitter thread that outlined three ways in which OTC deals can be tracked, using exchange outflows and transaction materics, among other statistics.

Coinbase Outflows

Ju first pointed to bitcoin outflows from exchange giant Coinbase as a sign that an OTC deal might have been done:

Ju points out that “massive Coinbase BTC outflow” usually goes to their “new” cold wallet which typically holds 6,000-8,000. Ju suggests that a significant Bitcoin move to different cold wallets could indicate that an OTC deal has been done on behalf of a third party and the coins moved to more secure holdings.

We know that Coinbase is one of the preferred conduits for institutional Bitcoin buying, so using their outflows is a very good indicator of large scale off-exchange buying.

Fund Flow Ratio

Secondly, Ju points to the ‘fund flow ratio’ of all exchanges, which is “a ratio of network transaction volume of exchanges among the entire tokens transferred on the network”:

What this means in practise is that a ratio increase suggests that most of the transactions on the network are exchange deposits/withdrawals, with other volumes coming from non-exchange wallets. With price being ultimately determined on exchanges, Ju says that huge non-exchange transaction volume, which includes OT deals, can be considered a bullish signal.

Tokens Transferred

Finally, Ju points to the Tokens Transferred metric, which is the number of bitcoin transferred on the network:

If the Tokens Transferred value goes up at the same time as the fund flow ratio for all exchanges goes down, Ju says we can assume that huge OTC deals are on-going.

Bitcoin OTC Metrics Can Indicate Market Health

Ju concludes by saying that the current Bitcoin bull run “never stops” while these OTC indicators continue to reflect institutional buying. With One River Asset CEO Eric Peters saying earlier this year that “the flows have only just begun” into Bitcoin, it’s safe to say that Ju’s Bitcoin OTC metrics may well stay healthy for some time to come.