The Quiet Transformation of Crypto's OTC Market

As digital asset trading becomes more sophisticated, OTC markets are evolving from a way to execute large transactions into a broader part of financial infrastructure.

Over-the-counter trading has long played an important role in cryptocurrency markets. Traditionally associated with large transactions executed away from public exchanges, OTC desks have provided an alternative for participants seeking to manage market impact, access liquidity, or negotiate specific trading terms.

But the role of OTC trading is changing.

As digital assets become more integrated into financial operations, the expectations placed on trading counterparties are expanding. Competitive pricing remains important, but it is no longer the only consideration. Execution flexibility, settlement arrangements, operational reliability, and access to different markets are becoming increasingly significant.

This evolution is gradually changing how OTC relationships are structured and what participants expect from them.

OTC trading is becoming a larger part of the market

The growth of OTC activity reflects changes in the composition of digital asset trading.

Research from Finery Markets found that institutional spot OTC trading volume on its network increased by 109% in 2025, compared with approximately 9% growth across the top 20 centralized exchanges. These figures represent different market datasets, but they point toward growing activity outside traditional exchange environments.

The first quarter of 2026 continued to show expansion. Finery Markets reported a 43% year-over-year increase in OTC spot volume, alongside a 160% increase in transaction count across its platform.

These developments suggest that OTC trading is becoming relevant to a wider range of transaction sizes and operational requirements.

Rather than serving exclusively as an alternative for unusually large trades, OTC arrangements increasingly support recurring trading activity, treasury operations, and more complex execution workflows.

For participants, the distinction between exchange trading and OTC trading is becoming less about transaction size alone and more about the type of execution experience required.

The relationship between price and execution is changing

Historically, one of the main reasons to use an OTC desk was the ability to negotiate pricing for a specific transaction.

That remains an important advantage, particularly when trading larger quantities or assets with less consistent liquidity.

However, evaluating an OTC transaction involves more than comparing a quoted price with the prevailing exchange rate.

Participants must also consider whether the quote can be executed for the required size, how quickly the transaction can be completed, and whether the agreed settlement conditions align with their operational needs.

A competitive quote may offer limited practical value if settlement introduces additional delays or the transaction cannot be completed within the intended timeframe.

The quality of an OTC trading relationship therefore depends on several connected factors: pricing consistency, execution certainty, communication, and the ability to accommodate different trading requirements.

This broader perspective is particularly relevant for firms that trade regularly rather than executing occasional large transactions.

Settlement is becoming part of the trading strategy

One of the most important changes in OTC markets is the growing attention paid to what happens after a trade is agreed.

Digital asset transfers can take place continuously, but the settlement process is not always equally straightforward.

Transactions involving fiat currencies may depend on banking hours, payment systems, and the availability of financial intermediaries. Cross-border arrangements can introduce additional timing and operational considerations.

Even transactions conducted entirely in digital assets require coordination around wallet infrastructure, confirmations, and counterparty procedures.

For firms managing treasury balances or trading across multiple markets, these details can influence when and how transactions are executed.

The growing use of stablecoins is also changing settlement practices.

In its first-quarter 2026 review, Finery Markets reported that stablecoins accounted for 82% of trades on its OTC network, illustrating their significance within that trading environment.

Stablecoins can provide an alternative to traditional fiat settlement routes in certain circumstances, although they introduce their own requirements related to custody, network selection, issuer exposure, and operational controls.

As a result, settlement is increasingly being considered alongside pricing and execution rather than treated purely as an administrative step after the transaction.

Technology is reshaping the OTC experience

Another notable development is the growing connection between OTC trading and electronic execution technology.

Traditional OTC trading often relied heavily on direct communication between clients and dealers. That personal relationship remains valuable, especially for complex or less standardized transactions.

Today, however, firms increasingly expect to interact with liquidity providers through digital trading interfaces, APIs, and automated request-for-quote workflows.

These technologies make it possible to integrate OTC pricing and execution into existing trading systems, reducing the need for manual intervention in routine transactions.

For firms looking to integrate OTC execution into their existing workflows, access to electronic trading infrastructure is becoming increasingly important. Trading platforms such as Trillion Digital provide connectivity and execution capabilities designed for these requirements. Firms interested in accessing these services can begin the onboarding process.

Technology also creates opportunities for more consistent reporting, transaction monitoring, and reconciliation.

Importantly, automation does not necessarily replace the relationship between a trading desk and its clients.

Instead, it changes where that relationship adds value.

Routine execution can become more efficient through technology, while more complex transactions may still benefit from direct communication, customized arrangements, and experienced trading support.

The result is a model that combines elements of traditional OTC dealing with the efficiency of modern electronic markets.

Counterparty relationships remain essential

Despite advances in trading technology, OTC markets continue to depend heavily on counterparty relationships.

Unlike anonymous exchange execution, an OTC transaction generally involves direct exposure to a trading counterparty, even when the process is conducted electronically.

This makes counterparty selection an important part of risk management.

Trading firms must evaluate not only pricing and available markets but also operational reliability, settlement practices, financial exposure, and compliance requirements.

For companies evaluating their digital asset trading arrangements, Trillion Digital's onboarding process provides a starting point for establishing a trading relationship.

As transaction volumes and trading frequency increase, these considerations become more significant.

A trading relationship that works effectively for occasional transactions may need additional processes and controls when activity becomes part of a firm's daily operations.

Consequently, the development of OTC markets is not simply about connecting more buyers and sellers.

It also involves building relationships and operational frameworks that can support repeated transactions under changing market conditions.

A market evolving beyond its original purpose

The continued development of crypto OTC trading illustrates a wider change in digital asset markets.

What began primarily as a way to conduct transactions outside public order books is becoming a more sophisticated trading environment, combining negotiated liquidity, electronic connectivity, and increasingly flexible settlement arrangements.

The evolution is unlikely to eliminate traditional OTC trading practices. Direct communication, tailored execution, and established counterparty relationships will remain relevant.

Instead, these capabilities are being incorporated into a broader operating model that reflects the requirements of professional financial markets.

For firms participating in digital asset trading, the value of OTC access will increasingly depend on how effectively execution, technology, and settlement work together.

As OTC markets develop, the firms best positioned to benefit may be those that treat trading not as an isolated transaction, but as part of a connected financial workflow.

As OTC markets continue to evolve, efficient execution, reliable connectivity, and flexible settlement arrangements are becoming increasingly important. To explore how these capabilities can support your trading operations, contact Trillion Digital to discuss your requirements.