OTC (over-the-counter) services in the context of crypto exchanges refer to a service that allows traders to buy or sell cryptocurrencies outside of the regular exchange order book. This means that OTC trades are executed privately between two parties, rather than being displayed publicly on the exchange.
OTC trading can be useful for traders who want to execute large orders without affecting the market price of the asset they are trading. This is because large orders on the regular order book can cause significant price movements, known as slippage, which can be unfavorable for the trader.
OTC services typically involve a broker or a team of brokers who act as intermediaries between the buyer and the seller, facilitating the transaction and ensuring that it is executed smoothly. The broker may also provide additional services, such as market analysis and price insights, to help traders make informed trading decisions.
Some crypto exchanges offer OTC services as an additional feature to their regular exchange platform, while others specialize exclusively in OTC trading.
OTC (over-the-counter) trading can be useful for several reasons, depending on the specific needs and goals of the trader. Here are some scenarios where OTC trading may be beneficial:
Overall, OTC trading can be a useful tool for traders who need to execute large trades, value privacy and confidentiality, or want to negotiate customized terms for their trades. However, OTC trading may not be suitable for all traders, and it's important to understand the risks and benefits of OTC trading before deciding to use it.
The article does not constitute financial advice.