Over-the-counter (OTC) trading refers to trading through companies or individuals who do your business for you, away from regular exchanges. To put it simply, if you want to avoid buying, trading or selling crypto through traditional and rigid exchanges, you can choose OTC trading, which offers privacy, the available trading limits surface and escape from market fluctuations. Crypto exchanges are popping up all over the world. Today, we have major trading platforms operating worldwide, such as Binance, KuCoin, and FTX. We also have national exchanges in India, such as UnoCoin, WazirX and CoinDCX.
Although these changes are attractive for regular investors, they are not good for the whales who work in big money. In this article, we learn about another popular and changing culture that high-end buyers often turn to, known as over-the-counter (OTC) trading.
What is OTC crypto trading? Over-the-counter (OTC) trading refers to trading through companies or individuals who do your business for you, away from regular exchanges. To put it simply, if you want to avoid buying, trading or selling crypto through traditional and well-regulated exchanges, you can choose to trade with no means, which is -provides privacy, high transaction volume. rise and fall from market volatility. How does OTC trading work?
There are no set procedures for OTC trading. The only constant is the lack of user identity, which is constantly changing. OTC transactions are usually done through trust, where the requirement is published, the price is given, the negotiation is completed and finally, after the agreement of the parties, the transaction is closed. Sometimes there is only one person acting as a third party, but when it comes to raising money, companies can take on the responsibility of bringing buyers and sellers together. OTC institutions that facilitate trading also have their own safeguards to ensure quick access to fiat and other cryptocurrencies. The registration process for OTC trading is simple and rigorous. It's easy because there are so many OTC companies all over the world, it's hard because it comes down to trust - you have to be able to trust someone with a lot of crypto to not cheat you. Fortunately, most major crypto exchanges offer OTC tables that will allow you to trade large amounts of crypto without breaking a sweat.
Benefits of OTC trading
Direct Trade: When you trade OTC, you buy crypto directly from a broker or sell it directly to a buyer. This eliminates other factors (such as volatility) that drive the value of the asset up. That's why you don't get crypto at the rate listed on Google, because exchanges add their money to the price. Trading - When was the last time you were able to trade stock from an exchange? It is not accepted. The best thing you can do is set a price level and buy or sell the option at the price you want. In OTC trading, you buy directly from the broker, so you can negotiate prices based on external factors to get a deal. Avoid exchanges: When someone buys 1,000 BTC on an exchange, the transaction can take hours. Meanwhile, the public is getting wind of the trade and has started buying BTC. This will cause the price of the token to expand, causing the whale to receive less BTC than expected. This is known as slippage. With OTC trading, you negotiate and decide the price and sell or buy each token at the same price. Since the market cannot know about the transaction, it will not affect the price of the token.
The downside of OTC trading
The downsides of OTC trading are few and far between, starting with trust. Popular exchanges are monitored by authorities, which eliminates the risk of extortion and fraud, but OTC transactions are unregulated. There is no chance for anyone to get their money back if the OTC operator decides to cheat and run away after you hand over your money or assets to them.
Conclusion
In all honesty, there are legitimate OTC companies that whales trust and have been working with for years. It is always better to be on the safe side and do your due diligence before trusting an OTC company.
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TAG : Crypto, OTC trading, pros and cons of cryptocurrency OTC trading
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