While everyone is distracted by price movements, numerous institutional products are being built.
The first product is a new price index from VanEck that creates more transparency around the over-the-counter (OTC) market. For those that don’t know, OTC trades are used by large institutions to buy or sell crypto without having to transact on an exchange. They traditionally avoid exchanges because a single exchange usually doesn’t have enough liquidity, can create slippage, and could potentially move the market depending on the size of the transaction.
The new index is called the MVIS Bitcoin US OTC Spot Index (MVBTCO) and leverages price inputs from OTC desks at Genesis Trading, Cumberland, and Circle Trade. MVBTCO gives institutions a reputable benchmark to reference, rather than having to individually ping each OTC desk to receive price information before deciding which counterparty to transact with.
Additionally, mainstream media will now have more reliable information to use in their reporting of the OTC market. It has been rumored that OTC transaction volume potentially matches the exchange transaction volume dollar for dollar, which means that the true 24 hour trading volume of crypto could be twice as large as publicly stated on websites like CoinMarketCap.
The second product coming to market right now is HODL, a basket of various crypto assets that will be available as an exchange traded product (ETP) on the SIX Swiss Exchange. This is an important milestone because there have previously been zero multi-crypto products available to the masses globally. The team behind this one is a partnership between VanEck and startup Amun AG and the hope is that anyone in the world can efficiently gain broad market exposure to crypto.
It is easy to get distracted during times of intense bear markets. Majority of the news and conversation is focused on price. Fortunately, there are quite a few valuable products being built in the shadows that will lay the groundwork for the market’s recovery and eventual bull run. These products center around two major themes: Access and Transparency.
If entrepreneurs can successfully build access and transparency, institutional investors will develop deep levels of trust and ultimately feel comfortable deploying large dollars into the industry. This process won’t happen quickly, but MVBTCO and HODL are two more steps forward towards the end goal.
Crypto has captured the hearts and minds of an entire generation. Now we have to do the hard work of building the products and services to make it all a reality.