OTC Crypto Trading - What is it and How Can You Use It?

Stock markets are highly influenceable, so they can generate skepticism among many beginning users. However, it is possible to trade with cryptocurrencies and other assets without altering the market or leaving a public record of the operations that are managed.

Stock markets are highly influenceable, so they can generate skepticism among many beginning users. However, it is possible to trade with cryptocurrencies and other assets without altering the market or leaving a public record of the operations that are managed. OTC Crypto trading allows high volume trading without shaking the market and offers a possible entry for institutional money.

What is OTC Crypto Trading? how does it work?

OTC (Over The Counter) Crypto trading consists of transactions that are not quoted within a formal market and purchase and sale orders start from a public order book in which the open orders are reconciled with those that are published, while in OTC trading conditions are negotiated bilaterally.

In OTC markets, the agreement between the two parties is private and the exchange is carried out privately, resulting in an invisible operation for the market.

Although Bitcoin is recognized as the leading cryptocurrency, the liquidity of the crypto market and the capitalization of these tokens are still very low compared to fiat currencies, precious metals and the rest of traditional financial markets.

This is why, in the cryptocurrency sector, an OTC solution is so important.

Who uses OTC markets?

Trading on OTC platforms is vital for the crypto community since they work as a welcoming door for large investors, financial institutions, governments, investment funds, associations of small investors, miners, ICO/STO, blockchain projects, etc.. Any organization or individual that is looking to multiply its capital without aggressive market trends.

In traditional markets, buying 1 Bitcoin would influence its price increase, so if there are many long positions, it would be increasingly difficult to acquire a complete token. If you sell 1 BTC and there are many short positions, your other tokens would lose value due to the unleashed trend. This is what is avoided with OTC markets.

OTC crypto trading benefits

OTC Crypto Trading can offer several advantages if you are looking to do high calibre trading (as large companies would).

  • Private market: In the absence of variations in the eyes of the market, the intentions of buying and selling are kept hidden from other investors. Furthermore, with a trusted intermediary between the counterparties, they do not need to reveal their identities to each other, the intermediary being the only one who knows both parties.
  • You can save money: One of the most important advantages. In OTC operations, money is saved by agreeing on a price that is beneficial for both parties, which does not have to correspond to the market price. This generates a WIN-WIN scenario for both parties.
  • Extended Limits: An OTC exchange is not tied to participating in an exchange under fixed rules. This gives participants the ability to trade securities more widely and without the low limits of traditional platforms.

Entering OTC markets depends directly on the intention of the trader. Although this option is more suited to large entrepreneurs, miners and investors, it is also true that many traders base their strategy on taking advantage of market manipulation to their advantage. This consists of setting trends through high volume and making profits from them.

t1trian2altsignals triangle

We are a large scale cryptocurrency community

providing you with access to some of the most exclusive, game changing cryptocurrency signals, newsletters, magazines, trading indicators, tools and more.