Over The Counter (OTC)

Over The Counter (OTC) trading refers to transactions conducted directly between two parties without using a centralized exchange. This method is common for large trades, especially in markets like Bitcoin, where executing substantial orders on public exchanges can cause price slippage and negatively impact market prices. OTC trading allows participants to negotiate terms privately, reducing the risk of influencing market dynamics.

Institutional investors and high-net-worth individuals often prefer OTC trading when buying or selling significant amounts of Bitcoin. By avoiding public exchanges, they maintain confidentiality and minimize the visibility of their transactions, which helps prevent sudden price fluctuations. OTC desks facilitate these trades by matching buyers and sellers, providing a more discreet and efficient way to transfer large volumes of cryptocurrency.

In addition to preserving privacy, OTC trading offers benefits such as faster settlement times and customized trade conditions. However, it typically requires trust between parties or the involvement of a trusted intermediary, as these trades lack the transparency and regulatory oversight of centralized exchanges. Overall, OTC trading plays a crucial role in enabling large-scale cryptocurrency transactions while maintaining market stability.