Crypto Liquidation Chaos Underscores OTC Desks’ Importance as Market Stabilizers, Says Finery Markets

OTC Desks Provided Critical Shock Absorption During Binance Liquidation, Finery Markets Says

During last week’s crypto market turmoil, over-the-counter (OTC) desks played a vital role in stabilizing trading, helping contain volatility and preventing a wider systemic crisis, according to Finery Markets, a top-ranked crypto ECN and trading SaaS provider.

On Friday, Bitcoin (BTC) plunged from roughly $122,000 to $103,000, with most losses occurring late in the session. Altcoins and otherwise stable assets—including Ethena’s USDe, Wrapped Beacon Ether (wBETH), and Binance Staked SOL (BNSOL)—also saw sharp swings. USDe briefly fell to $0.65 on Binance due to platform-specific issues, though it remained stable on liquid venues like Curve, Fluid, and Bybit.

Finery Markets emphasized that the localized Binance crisis could have spread without the mitigating presence of OTC desks.

“The crisis highlighted the value of OTC private rooms, which act as a firewall against systemic contagion due to differences in order book structure,” the firm said.

Unlike centralized exchanges, which operate on visible order books that expose liquidity to all participants, OTC desks provide private trading environments with off-screen liquidity. This setup allows large traders and institutions to transact without triggering panic-driven price swings, limiting systemic risk.

“Private liquidity reduces the chance of bank-run-like dynamics caused by visible panic in public order books,” Finery Markets added.

During the October 10–12 liquidation event, institutional activity surged on Finery’s OTC rooms. Week-over-week, BTC/USDT and ETH/USDT volume rose 107%, outpacing the 48% growth on centralized exchanges. Narrower bid-ask spreads reflected deeper liquidity and smoother execution for large trades. For example, executing 0.01 BTC was far more efficient on Finery than on Coinbase, Bitstamp, Kraken, or Binance.

Finery Markets’ analysis underscores the importance of OTC infrastructure as a stabilizing force in turbulent markets, providing a buffer against sudden shocks while maintaining orderly trading conditions.

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