Bitcoin OTC Trading

Is there a Bitcoin limit

For regular traders, trading on crypto exchanges is ideal. However, they may not be the ideal solution if you happen to be a high net-worth person who wants to conduct large-scale investments. At the moment, with the Bitcoin price surging, the ideal time to conduct large volume trades is right now, instead of later.

So let's suppose you have decided you want to make an investment. You want to buy some bitcoin for a couple hundred thousand euros or a few million. So what can you do, if traditional exchanges aren't the best way to do this due to potential unwanted market changes that the trade may cause or insufficient liquidity?

Fortunately, the exchange market isn't the only that you can purchase and sell cryptocurrencies and bitcoin. The place where large volumes are changing hands on a daily basis is the OTC market. Enterprises, financial institutions, and high-net-worth people conduct deals worth millions of dollars on a daily basis. These occur with increased anonymity and far away from the regular exchanges.

Bitcoin is decentralized. It is no one's money and everyone's money at the exact same time. It is something for everyone. However, when you have millions of dollars to invest, then the club is all of a sudden a lot more exclusive than that previously.

What is an OTC desk?

Now before we start to really delve into why some investors decide to use the OTC market instead of the exchanges, so let's take a closer at what actually the OTC market is - and the way that the OTC market is different from more well-established stock OTC markets, for example.

When discussing trading desks and financial markets, usually there are two different paths that need to be differentiated from one another: the OTC market (over-the-counter) and the exchange market. The exchanges are pretty basic. You see what price the bitcoin is currently trading at, then you send in your order and then pay the given amount (that can be accessed here on Coinmixed), and in the end, you will get your coins for a bit of an extra commission fee.

The OTC trading market is a little different. The seller and buyer trade with each other directly - with no exchange intermediaries, just the OTC agents and them. In that case, whenever the seller and buyer are able to agree on a certain price that they are willing to conduct the transaction at, they can settle their deal by paying the other person directly. In that case, the transaction will not make it to the market. This is a private deal that has increased anonymity and the actual market price is not impacted as much. (Those attributes are both very important and will be explained a lot later on once we start discussing the potential advantages.)?

It isn't that different, to be fair. What is interesting is actually the bitcoin market started out mainly on the OTC trading market. Even now, there are still many smaller traders who like using it to their daily trading. Most crypto trading back in 2012 was still conducted on the OTC markets. It was just a few years later when this role was taken from them by the bigger exchanges.

However, these days, the OTC market may be more important. Since even though there are fewer participants, there is a staggering volume that is traded on the OTC market. It is estimated that each day private transactions have around the same volume that the exchanges do. That means that every day on the OTC trading market several billions of dollars are exchanged among just a few hundred or thousand individual participants all over the world.

However, that isn't the only reason why investors choose a trading desk instead of the exchanges.

OTC broker trades are conducted between individuals, and therefore are subject to a lot less regulation and much less transparent. Another important thing to point out that whenever there are very large amounts traded on the exchanges, it can potentially have an obvious impact on the market price - and normally not in the direction that is favorable for the trader that just completed the multi-million dollar deal. There is another issue that we previously mentioned and that is many exchanges do not have sufficient liquidity for processing these huge deals. That can lead to hold-ups and several problems throughout the transaction - and no one likes to see that.

Which is the best Bitcoin platform?

The difference between bitcoin brokers and cryptocurrency exchange methods. While private BTC brokers make high level purchasing a breeze and easy to mentally manage, you can also resort to OTC crypto exchange methods. Below are some of our favorite companies and we will continue to update as new information becomes available.