OTC Crypto Exchange. Best Method For Large Orders
With large order of cryptocurrencies, say $10,000 for example or more, it’s advised you’d conduct the trade using over-the-counter (OTC) services, so you’ll be able to sell or buy (trade/exchange) your desired amount correctly, fully or partially, at a fixed or somewhat fixed price, without encountering any undesirable errors or outcomes that may come from normal crypto exchanges.
What is crypto OTC trading?
Crypto OTC trading is a way of exchanging cryptocurrencies, between buyers and sellers, usually with large orders that are handled most often by a third party. It can happen between one person and another only (P2P), but usually, this is done via specified platforms to oversee that everything is getting executed correctly.
Why would someone use an OTC trading desk instead of going to a normal centralized or decentralized exchange?
Because if people started buying or selling large volumes of a crypto asset on these exchanges, they’ll first suffer from the illiquidity that those exchanges would have at the specific price, result in paying or selling at a lower or higher price at different volumes, and sometimes the order wouldn’t complete. This large order would also affect the price of an asset on an exchange, which may ripple to other exchanges as well and cause a chain flash-crash.
What’s also beneficial to users if they conduct crypto trading using an OTC desk/platform, is that their large orders wouldn’t be recorded publicly (usually), so they’d avoid potential issues with potential regulatory bodies or institutions.
You also read: How To Sell Large Amounts Of Cryptocurrency
Where to OTC trade cryptocurrencies?
There is a handful of Bitcoin OTC trading with other crypto tokens, like Circle, Genesis Trading, itBit OTC, and even a few centralized exchanges that offer OTC services like ones found on Kraken, Bittrex, Bitfinex, and OKEX.
WhalesHeaven can be considered an OTC trading platform, one that is more secure than other methods, it uses a method that eliminates handing over custody to your cryptocurrency digital assets, and involved parties don’t have to worry about who’d send who first, so this leads to an exchange between the buyer and the seller that only executes when both parties have agreed to conduct the trade. The party who confirms that both the buyer and seller have agreed to each others’ offering of digital assets would be the platform itself, but signing off on both of their transactions to each other (using a threshold multi-signature mechanism), resulting in both parties receiving their crypto assets.
With that said, to conclude the main difference between normal exchange platforms and OTC crypto trading ones is that on a normal exchange, executing on a large buy or sell order may cause a lot of headaches for the one executing on the trade, and may cause a lot of shock to the crypto scene if they’re not careful, assuming they had a large order. So it’s best to have small to medium-sized orders on normal crypto exchanges, while large orders are executed through OTC systems.