In its recently published quarterly report Square revealed its channeling Bitcoi…


In its recently published quarterly report Square revealed its channeling Bitcoin trades from its Square Cash application to private brokers instead of public exchanges. Jack Dorseys Square Cash application enabled Bitcoin purchases and sales for most users early in 2018 adding to its consumer payments suite. Though overall Squares profits are substantial its not making a fortune on Bitcoin trades just yet. Square reported just $400000 profit on $37 million worth of revenue from Bitcoin for quarter two 2018. Square hasnt announced that it has moved to over-the-counter (OTC) trading services for its Bitcoin transactions. The published quarterly report instead quietly revealed that Square purchases bitcoin from private broker-dealers to facilitate Bitcoin trades for users of the application. Why Over-the-Counter? There could be a number of reasons behind Squares choice firstly it could protect Square from some of the Bitcoin price volatility seen on public exchanges. Sudden large sellouts from weighty Bitcoin owners and market whales move Bitcoins price far quicker than on OTC desks. Meltem Demirors chief strategy officer at CoinShares told CNBC: Working with a broker likely gets Square better pricing and better execution services than floating orders on the open market as well as more confidentiality. Secondly the company could be looking to avoid some of the security issues and hacks associated with public cryptocurrency exchanges. Private brokers and OTC services may also be providing Square with faster Bitcoin transactions while at the same time hiding Squares market activity from competitors. Potentially the move also gives Square more visible compliance from its use of institutional style trading facilities. Square has yet to comment on the matter. OTC Bitcoin Trading Increasing A recent study by TABB Group if accurate shows that OTC trading of Bitcoin may have overtaken daily Bitcoin trading volumes on public exchanges. Certainly larger trades of Bitcoin by millionaire investors and institutional investors moving over along with Bitcoin associated enterprises may be fuelling OTC service demand. TABB Group puts OTC trading of Bitcoin at $12 billion dollars worth per day but the study has been refuted by some. According to statistics from daily trading of Bitcoin via public exchanges is around $4.3 billion. What do you think an increase in OTC Bitcoin transactions means for cryptocurrency markets? Images courtesy of Shutterstock Bitcoinist archives The post Square Cash Quietly Reveals Its Avoiding Public Cryptocurrency Exchanges appeared first on Via

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