April 17, 2021

What is OTC cryptocurrency trading?

What is OTC cryptocurrency trading?

You can trade cryptocurrency not only on exchanges. Traders can conduct transactions directly, bypassing large playgrounds.This is called OTC (Over-the-Counter) trading. This means that the seller and the buyer conclude a deal directly with each other, bypassing the exchange. Cryptocurrency is no exception. OTC markets are also used to buy stocks, bonds, oil, gold and other assets, writes RBC Crypto.

Most of the offer on OTC cryptocurrency platforms is provided by miners, explained Nikita Zuborev, senior analyst at Bestchange.

When do you need to go outside the exchanges?

OTC trading is usually used when conducting large transactions, for them this is the best option, noted Maria Stankevich, Development Director of the EXMO cryptocurrency exchange.

This method avoids priceslippage: while the client buys limit orders in whole blocks, the price can change dramatically. OTC trading can also help avoid complexities with order execution on different exchanges in order to meet the demand for high volume, the expert explained.

Such transactions are not recorded in the ledgerorders of the site and are not displayed publicly, which allows achieving greater confidentiality, says Maria Stankevich. According to her, this method is ideal for those who need to exchange large amounts of fiat for cryptocurrency or vice versa.

Differences from transactions on exchanges

The main difference between OTC transactions and transactions onexchanges for a trader are unique conditions of transactions, noted Nikita Zuborev. He explained that on the exchange, the price is determined by the balance of supply and demand, and outside of it, participants can agree on any volumes and prices, sometimes with a significant discount or premium to the exchange price.

Also, according to the analyst, OTC trading in most cases is simpler and does not require identity verification, although it all depends on the specific site.

The trader must understand that when trading outside the exchanges heaccepts a high risk, since during such transactions the liability of the parties is not regulated in any way, explained Artem Deev, head of the analytical department at AMarkets.

How to start conducting OTC trades?

According to Artem Deev, the most popular waysOTC cryptocurrency trading is the conclusion of transactions through professional intermediary brokers, through specialized chats and purchases during the token sale. In order not to become a victim of scammers, you need to engage in over-the-counter trading through trusted resources, the analyst advises.

"For this, transactions must be insignificant at first, in order to work out the whole algorithm and understand how the participants of the other side comply with the rules of the game.", - noted Artem Deev.

Even when using proven sites, there are noguarantees that such trades will be successful on an ongoing basis, so OTC trading is not suitable for beginners. Therefore, for 99% of users, classic cryptocurrency exchanges are more suitable.

Where is it more profitable to buy cryptocurrency? TOP-5 exchanges

For a safe and convenient purchase of cryptocurrencies with a minimum commission, we have prepared a rating of the most reliable and popular cryptocurrency exchanges that support deposit and withdrawal of funds in rubles, hryvnias, dollars and euros.

Site reliability is primarily determined bytrading volume and number of users. By all key metrics, Binance is the largest cryptocurrency exchange in the world. Binance is also the most popular cryptocurrency exchange in Russia and the CIS, since it has the largest turnover of funds and supports transfers in rubles from bank cards Visa / MasterCard and payment systems QIWI, Advcash, Payeer.

Especially for beginners, we have prepared a detailed guide: How to buy bitcoin on a crypto exchange for rubles?

Rating of cryptocurrency exchanges:

# Exchange: Website: Rating:
1 Binance (Editor's Choice) https://binance.com 9.7
2 Bybit https://bybit.com 7.5
3 OKEx https://okex.com 7.1
4 Exmo https://exmo.me 6.9
5 Huobi https://huobi.com 6.5

The criteria by which the rating is set in our rating of crypto-exchanges:

  • Work reliability - stability of access to all platform functions, including uninterrupted trading, deposit and withdrawal of funds, as well as the period of work on the market and the daily trading volume.
  • Commissions - the size of the commission for trading operations within the site and the withdrawal of assets.
  • Feedback and support - we analyze user reviews and the quality of technical support.
  • Convenience of the interface - we evaluate the functionality and intuitiveness of the interface, possible errors and failures when working with the exchange.
  • Platform features - availability of additional features - futures, options, staking, etc.
  • final grade - the average number of points for all indicators, determines the place in the rating.

What is OTC cryptocurrency trading?


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