Jack Dorsey’s Square Cash application recently published its report for the quarter and revealed that the company is channeling Bitcoin Trades from its application to private brokers instead of public exchanges.
Square cash application did not make a huge profit for the 2nd quarter of 2018, the company reported a $400,000 profit out of $37 million in revenue.
However, the company has not officially announced that it would move to over-the-counter (OTC) trading for its transactions. In the quarterly report published the company which quietly revealed that it had purchased Bitcoin from private broker-dealers for its users.
Over the counter(OTC) trading could benefit the company from volatile Bitcoin price which is usually seen on public exchanges. A sudden sellout from whales Bitcoin can make the price move very quickly in a short span of time.
Meltem Demirors, the chief strategy officer at CoinShares told CNBC that buying Bitcoin from broker gives them a better pricing and the orders can be placed quickly with confidentiality.
The company can avoid hacks and security issues associated with public cryptocurrency exchanges while dealing over the counter (OTC). Square can hide its market activity from its competitors while dealing with a private broker and OTC services.
Over the counter (OTC) trading of Bitcoin may have overtaken the volumes created on public exchanges and a recent study by TABB Group show that over the counter trading of Bitcoin is at a volume of $12 billion per day, but some people have refuted the claim. According to Coinmarketcap, a leading cryptocurrency analyst, the daily trading volume by cryptocurrency public exchanges is around $4.3 billion which far less than the OTC market.