Whales are trading OTC

Many people are unaware of just how much fiat is traded off excahnges OTC

Vinny Lingham has tweeted in the past that " The OTC market for bitcoin is bigger than the exchange market. Exchanges set the price but the large trades don't happen there"

For the most part, OTC trading has been reserved for people purchasing abnormally large amounts of bitcoin. The bitcoin community refers to these traders as “whales.” Over the past year, a number of OTC companies are offering over the counter trading. The top four are Bitcoin-OTC, Bitcoin Investment Trust, Genesis Global Trading and ItBit.

The top 1% Don’t Use Bitcoin Exchanges.

Kong Gao of Richfund.pe, said "We had a customer back in 2013 who bought 100,000,000 CNY ($15.1m) worth of bitcoins from us in 15 tranches over a one-month period. This trade raised the bitcoin price from 3,500 CNY to 5,000 CNY ($527-$753). He bought about 25,000 bitcoins in total and stored them in five different addresses. There are many trades between 500 BTC to 700 BTC. In addition to direct OTC service, we also help other OTC traders hedge their bitcoin position and these ranges from 5,000 to 2,000 bitcoins. And recently we had a trade of 140,000 euro".

This indicates that the bitcoin market is even stronger than it appears as OTC strengthens the future of Bitcoin.!

Lingham said:

"Predictions are largely guessing for bitcoin, albeit educated sometimes. I would rather say that the conditions for this to exist appears to be in the $3-$5k/BTC range from my best guess".

It’s definitely a price issue, he noted, and not an attempt to avoid regulation. Most well-known OTC dealers still have KYC/AML requirements.

This is largely a market and liquidity issue but high net worth US and UK individuals and family offices would also not setup accounts at large unregulated exchanges, regardless of liquidity. They would rather use a trusted broker or intermediary to execute the trades. MTGox is not yet a distant memory.