What is OTC Cryptocurrency OTC Trading

All participants in the crypto ecosystem are aware of the importance of crypto exchanges.large sums of money,investors are turning to over-the-counter trading.

What is OTC cryptocurrency trading?

OTC, short for Over-the-Counter, is another way to trade stocks, bonds, derivatives, and currencies in both cryptocurrency and traditional markets.There are usually three parties involved in trading on currency exchanges: buyers, sellers, and the exchange itself (which operatesOTC trading excludes the intermediary (exchange) and bindsbuyers directly with sellers.

This term is not specific to the marketcryptocurrencies. OTC trading is also very popular in the traditional stock markets, and, according to experts, up to 30% of the total volume of stock trading occurs through OTC transactions. In the cryptocurrency space, this percentage is estimated to be even higher.

OTC trading methods

There are several ways to carry out over-the-counter cryptocurrency trading. 

1.P2P sites.In over-the-counter trading, the two people who make the trade usually knowThey simply negotiate the price of the transaction and then shipThese are platforms like LocalBitcoins or LocalEthereum, where small amounts are exchanged.

2.OTC trading platforms, which are also sometimes referred to as"Dark pools"... When using an OTC trading platformthe process is quite similar to an OTC P2P transaction with the difference that traders usually do not know each other and do not trust each other, and the exchange acts as an intermediary in the transaction. OTC marketplaces are compensated as a percentage of the commission on the completed trade.

3. Decentralized dark pool... This is still a very new idea, which for the first timeimplemented the Republic Protocol. Buyers and sellers do not have to trust each other or the trading desk, as transactions are executed automatically and anonymously using smart contracts. This not only offers the advantage of mitigating counterparty risk, but it can also make OTC trading more liquid and efficient by creating a shared pool of liquidity that anyone can connect to without paying significant fees to OTC vendors.

4.Buying coins as part of a private token sale.Projects often conduct a private sale of coins to large investors before launching their public sale.These transactions take place without intermediaries and are considered over-the-counter trading.

5. Transactions through specialtransaction aggregators, which provides the purchase and sale of cryptocurrency through the secure IRC protocol, directly between users. 

Benefits of OTC trading

 • Increased liquidity: Crypto exchanges usually have low liquidity.OTC platforms provide the opportunity to buy large amounts of cryptocurrency in short periods of time without slippage.

 • Price Protection: OTC orders do not change prices as millions of dollars move in the market.

 • Anonymity: The depth of the order is not displayed when used on OTC platforms.

 • Support for fiat currencies: All cryptocurrency OTC platforms support fiat, while many cryptocurrency exchanges do not.

 • Unlimited. Coinbase limits purchases to $25,000 per day.Kraken only allows you to withdraw $2500 per day and $20000 per month.Circle sets a withdrawal limit of $3000 per week.

 • Rare coins. Less common tokens can be purchased in larger quantities than on exchanges.

The largest OTC cryptocurrency trading markets:

 • Circle Trade 

 • Genesis Trading  

 • XBTO  

 • B2C2 

 • SFOX.

Each of these OTC markets offerscertain services and features that are slightly different from their competitors. Some of them may offer lower fees, 24/7 support, international trading, and even custom algorithms for selling large amounts on regular cryptocurrency exchanges.

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