A new era in crypto trading is about to begin. Coinbase Custody has just completed its first over the counter (OTC) trade directly from cold storage. If you understand a lot about trading, you will know that this is a huge deal.
The San Francisco-based company, which announced the feat on its blog recently, said that the trade occurred after the integration between the OTC desk and Coinbase Pro. Before that, the company had to take the assets from cold storage before trading them, which could make the client lose from 24 to 48 hours only for the withdrawal part.
With this new integrated system, Coinbase is about to make the process become even more seamless and quick now that the two departments are integrated and the OTC desk can be used without taking the funds from the cold storage.
Coinbase explained that the integration happened because there was a demand from the clients. They wanted the services to be fast but some of them were not willing to take the assets out of cold storage in order to trade them faster, so the perfect solution was to unite the best of both worlds and do this.
According to the CEO of Coinbase Custody Trust, Sam McIngvale, this was asked by clients several times and that they heard “loud and clear” the wish and went to made it come true. He affirmed that Coinbase has the largest regulated liquidity pool in the world for crypto assets at the moment and that having this level of speed was a very important move for the company.
Coinbase’s OTC desk was launched last year in a very discreet way. There was not a lot of marketing around its launch. It was originally offered for U. S. accredited investors only but the service was expanded to both Asia and Europe afterward.
Generally, Coinbase’s OTC desk was linked to Coinbase Prime, but this if the first time that a link to Coinbase Custody is made.
Cold Storage Trading To Be Common Soon
It is obvious that only Coinbase would follow this trend. In fact, many of its competitors are already keen on using the same idea. The goal of all these companies is to speed up OTC trading at the same time that their clients remain safe and their funds protected.
For instance, Genesis Trading got ahead of Coinbase and did it in January with a partnership with BitGo, a custody provider. This way, people did not need to remove their assets from BitGo in order to trade it at Genesis. OTCXN made a similar partnership with Kingdom Trust and Prime Trust this year, too.
The Block Crypto has recently interviewed the CEO of the crypto hedge fund Crescent, Ali Hassan, which talked about this movement. According to him, custody will not be effective if it is only used to store assets. You have to able to store them and to trade them quickly or the solution will simply not be too good.
Coinbase Custody + OTC = easy, instant, anonymous liquidity for offline funds
Coinbase Custody clients can now trade OTC directly into and out of their custody accounts.https://t.co/tp8DvEqB5r
— Coinbase Custody (@CoinbaseCustody) March 13, 2019
By allowing the clients to use the service just like Coinbase is doing, Ali Hassan believes that the company is finally stopping to use two different and unrelated services (OTC trading and custody) and starting to offer full brokerage services, something that has a lot more value to the customers.