Square Replaces Public Exchange with Bitcoin OTC Desks
The company has chosen to transfer its BTC trading services to OTC desks as opposed to public digital currency exchanges and analysts believe that this new step taken will enhance its services and transform the platform into a more efficient one. As reported, Square has announced in its recent quarter-year report that BTC can now be traded through the company’s Cash application and with private dealers instead of public trading exchanges.
One step further
This move has been viewed as a positive step in the company’s main mission of achieving a more professional and expert BTC trading platform equipped with all trader and user needs. It comes as a result of the transferring to private dealing instead of public ones to provide a fast, efficient and price-friendly stable platform equipped for trading any scale of bitcoins. CSO of CoinShares, Meltem Demirors stated that collaborating with a broken will most likely enhance the company’s pricing and transaction services and offer more privacy.
Several experts have also stated that public exchanges are widely exposed to potential hacking and cyber-attacks following each incident in the past few years that have resulted in hundreds of millions of USD in losses. As public exchanges do not feature direct and instant transfers or trades, it leaves public orders revealed to any rivals to monitor and abuse them for personal gain.
Chief Executive Officer of Bitwise Asset Management, Hunter Horsley, said that the transition to over-the-counter desks does tackle a few of the issues presented to Square due to the accelerated speed and overcoming any requirement of depositing assets and guaranteeing that a transaction or request is completely private. Yet another benefit of introducing over-the-counter desks is linked to price slippage. This takes place whenever an individual sells off heavy sums of any digital currency and essentially pummels its price to drop further on a specific trading exchange. Slippage more than often results in huge sums invested by traders being sold at a lower price than originally planned.
As per CSO Demirors, the new shift in service is also meant as a means of displaying full compliance with official regulators. The company has been exposed to heavy criticism and a collaboration with over-the-counter traders may provide a better outlook on the company given their safer nature. Although no official announcements have been made in regards to which OTCs the company has shaken hands with, Genesis Trading publicized its new-found partnership with Square earlier this year.
The reveal came along right after Square was granted a crypto-license from the NYDFS which permitted the company to begin offering its services within New York. During Q1 of 2018, the company’s BTC trading earned it around $200K from around $34M in Bitcoin profit. During Q2, it jumped from $200K to $400K, doubling in value. Square’s Chief Financial Officer, Sarah Friar, has stated that the BTC trade system is not expected to be a motivational or fueling factor in Cash app and its expansion.