Over the counter trading in crypto
Sometimes the market takes a dive after big news or during FUD. This is especially true with crypto, since there is no central bank to control the market. These dips can be used for buying opportunities, but it’s hard to know when or how long they will last. The benefit of OTC trading is that you have direct access to the person you are trading with.
What is OTC trading in crypto and why is it important?
OTC trading in crypto is when you trade with someone who isn’t on a public exchange via direct messaging. The person selling and buying OTC has no reason to change the price, since they can sell to anyone at any time. It’s also private, so you don’t have to worry about your transactions being tracked or hacked.
The point of OTC trading is to prevent the market from being affected. It can be used as a way to manipulate prices, but they are typically more stable because there isn’t as much pressure on the market maker
Why would someone buy OTC?
There are two main reasons you would want to trade OTC. The first is that you are looking to buy more crypto than you can on exchanges. You may also find yourself in a situation where the market has dipped, and it’s the perfect time to buy before it shoots up again.
The second is that there are certain things you can’t do on an exchange, such as invest in ICOs or other altcoins.
How do you buy OTC?
In order to buy from someone privately, you need a direct line of communication. You can do this by using an encrypted chat program such as Signal or WhatsApp to safely communicate with one another.
It’s not enough to just have a conversation, though. In order for it to be OTC trading, both parties must have their own wallet. You have to send the money directly from your account into theirs, and vice versa. This is one of the main reasons for OTC trading in crypto instead of other currencies.
It can be scary sending a stranger your money, but you should always contact them beforehand to make sure there are no problems.
What are the risks of OTC trading?
When you’re buying from a stranger, you have to worry about them not following through with the trade or disappearing after they have received payment. You can try to minimize this risk by getting a reference from someone who has bought from them before, but it doesn’t guarantee anything.
You should also check the person’s photos to make sure they aren’t photoshopped or ripped from an online picture.
The other thing to look out for is the number of confirmed transactions they have made. You can check this in their profile or by looking up a certain amount on an OTC site. If it’s really high, then it might be suspicious because you’ll probably never even hear about them selling OTC before.
In order to avoid problems, pay with a peer-to-peer encrypted chat program. This way, you can make sure they are who they say they are before handing over any money.
What are the benefits of using it?
OTC trading allows for more anonymity compared to exchange trading, but it also takes longer until the order is fulfilled because there are fewer traders available. For smaller amounts of money, this might even be cheaper than using an exchange. However, the only way to know for sure is to check their prices.
If you plan on using exchanges, then it’s still a good idea to have an OTC trading person you can contact so you can buy quickly in case of a dip or if your money takes a long time to deposit.
Who can take part in OTC trading?
For the most part, anyone with enough money to buy a large amount of crypto can take part in OTC trading. However, you need to be careful and only trade with someone who has a good reputation and solid references.
Final thoughts on OTC trading in crypto
OTC trading in crypto is a strange beast compared to other markets. It’s good for investors because it gives them a chance to buy a large amount of cryptocurrency when the market dips without being affected by exchange rates.
However, they have to be careful about who they choose to trade with because there are risks involved that you won’t find elsewhere.
