Japan, the cryptosphere and OTC trading
Japan is a critical trading hub in the cryptocurrency market. A few years ago, the world’s largest exchange was based there until it went down after being unable to recover from a security fiasco. It’s suspected that the 20.000 BTC order that changed the market two weeks ago came from Japan too.
And those are only two of the many reasons for which keeping an eye on the Asian cryptocurrency community in general, and in the Japanese one in particular, serves well those who do.
Coincheck is a digital asset exchange based in Japan which is trying to attract institutional investors through a trading system called over-the-counter or OTC. The system works like this: if you’re an investor with enough dough, you can trade in high volume at a pre-arranged price.
It’s a static price so you don’t need to worry about volatility or price variations as you would do if you were doing the ordinary spot trading that is the standard way of doing business in most platforms.
The new service started on April 1st, and it allowed for Bitcoin trading only. The OTC trading option starts at 20 BTC, but the recommended volume is of 225 BTC which is higher than USD 1 million.
Two coins to join the OTC game
And now, the platform is looking to expand its horizons by offering two more digital assets for trade in OTC mode: Ethereum and Ripple’s XRP. This move probably has to do with the fact that both cryptocurrencies are the second and third most extensive by market capitalization, so they’re quite crucial within the crypto verse.
Trading for both cryptocurrencies starts at about USD 80.00,00, which is 500 ETH or 250.000 XRP.
This novel trading method could be responsible for the bullish run we’ve seen over the last couple of weeks, according to Cumberland, a market maker. It claims it’s traced the price spike on April 2nd to OTC trading (at least partly).
Cumberland identified 13 OTC orders that were each worth more than a thousand BTC, and that were placed inside of an hour. Those conclusions fit with the pattern everybody saw that day (Bitcoin going up by USD 1.000,00 roughly in 60 minutes), so while you don’t need to believe them, they make sense. Other researchers have spoken of three orders placed basically at the same time through three different exchanges at the same time, more or less.
The hack and the new rules
This is not the first time Coincheck is on the news this year as it turned out it played a pivotal role in improving the Japanese legal environment for cryptocurrency trading.
On last January Coincheck suffered one of the crypto verse’s most massive hacks ever. The exchange managed to survive the fraud and the scandal, and it’s found a way to repay its customers for any lost assets. The total refund will be of USD 532 million in stolen
The hack prompted the country’s Financial Services Agency to reconsider in full its regulatory framework. The new rules force crypto exchanges to improve customer security by using cold storage only, which means that all of the platform’s digital treasure chest must be kept disengaged from the internet at all times.
Image courtesy of Pixabay.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.