8 August 2022
Over-the-counter trading is a broad network of financial technology through which virtual markets operate beyond the traditional crypto exchanges. In short, OTC markets are private places where you can buy and sell cryptocurrencies under highly individualised conditions.
OTC transactions vary at different levels depending on the desk you’re working with, the current market forces, and the trade volume. What sets them apart from conventional markets is that OTC agents undertake to source crypto at exceptional prices. Moreover, they rely on the consistency and speculations of digital assets to detect the perfect timing for striking deals.
By harnessing decentralised blockchain technology, OTC crypto platforms resolve critical problems for new and seasoned cryptocurrency traders. Among others, ensuring top privacy to sell and buy crypto OTC is one of the most significant benefits.
This blog post reveals the essential features of cryptocurrency trade on OTC markets. It also lists the ups and downs of DEXs and your best investment options in 2022.
Crypto OTC trading occurs between two parties who want to sell/buy crypto OTC in a closed market. Unlike conventional exchanges that display several prices, OTC platforms list only one ask and one bid rate. The involved counterparts see the private price and negotiate the transfer based on the amount they are ready to spend or accept.
Private trading negotiations involve a seller who reveals the asking price and a buyer who sets the bid price. When both parties agree on the exchange, the transaction can go through. In this process, the agent undertakes to source the requested assets at the agreed price. More specifically, the OTC desk assumes the risk on behalf of the customer.
It’s up to the OTC platform to purchase the assets at a slightly lower price to make a profit. But since these professionals have extensive experience, they always know where to look and find the best rates. Renowned OTC desks also enable crypto-to-crypto and fiat-to-crypto swapping, depending on the client’s preferences.
Making a sizeable crypto investment is a bold move and requires expert help. At this point, you can do business with a traditional exchange or buy crypto OTC through a specialised platform. Both alternatives have ups and downs, so traders should focus on methods that save them time and money. Here’s a quick overview:
Markets like Binance and Coinbase offer a convenient way to procure digital assets. They are centralised and hence, governed by a single central authority, which acts as an intermediary. These exchanges trade at current market rates and list all ask and bid prices in a public order book.
Traditional exchanges may suit clients who prefer simplified procedures and multiple trading pairs. Yet, the lack of privacy and liquidity is a considerable downside. Moreover, the increased risk of data leaks, thefts, and slippages may discourage potential traders from centralised platforms.
Decentralised OTC exchanges are preferable due to several benefits they offer to traders. Above all, they charge lower fees to buy crypto OTC and skip spread mark-ups. In addition, over-the-counter desks grant users complete control over their assets and keys. They operate on a peer-to-peer basis and don’t store sensitive data on their servers. Hence, privacy remains paramount, and security from hacks and data misuse is always on a super-high level.
Top-notch OTC exchanges like Nexinter take pride in high volume trading, fast transactions, and many trading pairs. Unlike popular choices, such as UniSwap, IDEX, and DyDx, Nexinter ensures you get the best value for your money.
Regardless of the number of assets you wish to trade, registering with an OTC platform is straightforward. Potential clients can range from individuals and organisations to VC and hedge funds that want to buy crypto OTC. Even desks trade among themselves.
When dealing with high-net-worth traders, desks like Nexinter facilitate the entire transaction with minimum attention and fees. Miners can also use the OTC trading platform to convert earned assets into local fiat currencies.
Individual traders and smaller companies can also join OTC crypto platforms. This way, they avoid listing cryptocurrencies on traditional exchanges and thus reduce the cost and waiting times. Thanks to desks like NextHash, small-scale organisations with modest financial capabilities can enter the crypto world and diversify their assets.
As with other exchanges, procuring crypto over the counter has a few ins and outs. Here’s what you gain and risk from trading via OTC crypto desks:
If you want to buy crypto OTC, it’s worth considering the advantages first. Only then can you make an informed decision.
• Enhanced liquidity. Macro investors can buy crypto OTC in large volumes. Transactions are direct and run faster.
• No slippages. OTC brokers reduce the market impact by making crypto transactions unnoticeable. Hence, the assets’ value remains stable, and your order to buy or sell crypto triggers no financial loss.
• Privacy. Traders enjoy a high level of security and stay anonymous. As a result, their assets and data remain protected from leaks and thefts.
• Fixed rates. OTC exchanges offer fixed prices on orders. However, you may need to pay a brokerage fee.
Now let’s review the inherent risks from trading via OTC desks.
• Decentralisation. Authorities don’t supervise OTC exchanges, so they don’t follow strict rules. Also, traders don’t get listed as money transmitters.
• Lack of transparency. Traders remain anonymous and hence don’t have information about their counterparts. Trading decisions depend solely on the current market conditions.
• Market limitations. Many OTC platforms focus on sourcing Bitcoin and other established cryptocurrencies. Less popular digital assets may be challenging to find.
The Nexinter exchange is a seasoned specialist in the crypto world. By combining expert insight and advanced tech, we deal with any crypto volume like a pro. Moreover, we offer an affordable fee structure, whether you’re making a considerable investment, diversifying your portfolio, or selling minted assets.
The boosted security layers and multiple trading pairs are another reason to entrust your cryptocurrencies to us. Thanks to the intuitive interface, we strive to meet the specific needs of every client.