How does the OTC market work for cryptocurrencies?

3 answers

• Dec 17, 2021 · 3 years ago
  The OTC market for cryptocurrencies operates outside of traditional exchanges, allowing buyers and sellers to trade directly with each other. Unlike exchanges, OTC trading does not involve a centralized order book. Instead, it relies on brokers or dealers who facilitate transactions between parties. OTC trading offers several advantages, such as increased privacy, larger trade sizes, and reduced price volatility. It is particularly useful for institutional investors and high-net-worth individuals who require large liquidity and wish to avoid impacting the market with their trades.
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• Dec 17, 2021 · 3 years ago
  The OTC market works by matching buyers and sellers of cryptocurrencies through intermediaries known as brokers or dealers. These intermediaries help facilitate the transaction by finding counterparties and negotiating the terms of the trade. OTC trading is often used for large trades that may not be easily executed on traditional exchanges due to liquidity constraints. It offers more flexibility in terms of pricing and settlement options. However, OTC trading can also be riskier compared to trading on exchanges, as it lacks the same level of regulation and transparency.
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• Dec 17, 2021 · 3 years ago
  In the OTC market for cryptocurrencies, buyers and sellers can trade directly with each other without the need for a centralized exchange. This allows for greater flexibility in terms of trade size, pricing, and settlement options. OTC trading is often used by institutional investors and high-net-worth individuals who require large liquidity and prefer to keep their transactions private. However, it's important to note that OTC trading carries its own risks, such as counterparty risk and the potential for price manipulation. It's crucial for participants to conduct thorough due diligence and work with reputable brokers or dealers to mitigate these risks.
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