What are the potential risks and challenges of adopting OTG in the cryptocurrency industry?

3 answers

• Dec 16, 2021 · 3 years ago
  One potential risk of adopting OTG in the cryptocurrency industry is the lack of transparency. Since OTG trades are conducted off-exchange, it can be difficult to verify the legitimacy of the transactions. This lack of transparency may attract fraudulent activities and increase the risk of scams. Additionally, the lack of regulation in the OTG market can make it more susceptible to market manipulation and price manipulation. It is important for investors to exercise caution and conduct thorough due diligence before engaging in OTG trading.
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• Dec 16, 2021 · 3 years ago
  Another challenge of adopting OTG in the cryptocurrency industry is the potential for liquidity issues. OTG trades are typically conducted between two parties directly, which means that the liquidity of the market may be limited compared to traditional exchange trading. This can result in higher bid-ask spreads and increased price volatility. Traders and investors should carefully consider the liquidity of the OTG market before participating in such trades.
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• Dec 16, 2021 · 3 years ago
  At BYDFi, we believe that adopting OTG in the cryptocurrency industry can provide certain benefits, but it also comes with its own set of risks and challenges. One of the main risks is the potential for counterparty risk. Since OTG trades are conducted directly between two parties, there is a risk that one party may default on their obligations. It is important for participants in the OTG market to thoroughly vet their counterparties and establish proper risk management protocols to mitigate this risk. Additionally, the lack of centralized clearing and settlement mechanisms in the OTG market can make it more difficult to resolve disputes and enforce contracts.
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