New strategies are coming up with the increase in technologies related to cryptocurrency. Most retail traders tend to use Centralised Exchanges, also referred to as CEX, stores such as Binance or Coinbase. On the other hand, institutional traders or high-net worth individuals use a more powerful and unknown strategy called crypto OTC trading. What does this means and what is attracting serious investors? Each of them will be discussed further in the text. Now, let’s understand the meaning of Over the Counter Cryptocurrency Trading, what branches lie under it, it’s merits and the methods of trading involved.
What is Crypto OTC Trading?
Crypto OTC trading also known as Over the Counter Trading, is a type of trading in which two individuals can privately conduct a business transaction free of public exchanges. This is commonly done by a crypto OTC desk which is an entity of services who do matching of buyers and sellers for volume trades of cryptocurrency. Unlike medium scale exchanges, where deals are made public on order books, OTC deals are made off-exchange. This means that the terms of the deals done in terms of price, volume and the counter parties remain confidential which guarantees privacy and flexibility.
Understanding How OTC Crypto Trading Functions
The procedure is quite simple, yet designed for transactions of a higher value.
- Initiation: A buyer or seller approaches an OTC desk with a distinct pre-defined trade.
- Quotation: The desk provides a quote with regard to current prices in the market.
- Execution: If the quote is accepted, the trade is completed away from the exchange.
- Settlement: Funds and crypto assets are transferred in accordance with previously agreed upon protocols.
OTC desks regularly utilize custody services such as TransFi Wallet, when dealing with international trades or multi-currency exchanges, to ensure secure transactions and settlement in a timely manner.
Also read: How to manage freelance income and taxes in Indonesia
Who Makes Use of Crypto OTC Trading?
- Institutional clients, for example, hedge funds, family offices along with other crypto funds.
- High-net-worth individuals (HNWIs) looking to buy or sell large sums without effecting the market price.
- Crypto mining companies offloading large quantities of coins.
- Treasury assets or fundraising managing early stage crypto projects.
Individuals looking to balance their portfolios value liquidity, anonymity, and the ability to customize trades. Such attributes are very hard to find in public exchanges and that’s why the OTC crypto market works best for those who need speed and personalization.
Benefits of OTC Trading in Crypto
- No Slippage: OTC trading offers clients the comfort of predetermined prices while providing them with fixed quotes, unlike exchanges where placing large orders tends to affect the price.
- Privacy: Trades are made without disclosing them to the public which is perfect for corporations, which prefer confidentiality.
- Enhanced Liquidity: The aggregation of multiple liquidity sources is common for OTC desks.
- Personal Attention: Account managers assist clients with the planning and execution of intricate trades.
- Variable Closure: OTC desks accept partial payments in various currencies, including cross-border payments.
TransFi Support for OTC Traders
TransFi Ramp and TransFi Wallet target high-volume traders, institutions, and advanced users.
TransFi Wallet allows easy multi-asset custody that is perfect for large trades. With low latency and high compliance, TransFi Ramp enables easy conversion of fiat to crypto, and vice-versa. Whether you are completing a one-off trade, investing in a crypto project, or managing a treasury, TransFi’s infrastructure facilitates smooth, fast, and safe OTC crypto trading.
Conclusion
Driven by the demands of large investors seeking privacy, liquidity, and efficiency, the world of crypto OTC trading is rapidly expanding. Retail users still account for the majority of trading on public exchanges, but institutions are increasingly shifting towards strategic trades on the OTC crypto market.
With an ever-increasing adoption of crypto, the right tools such as OTC desks, ready-for-compliance platforms, and secure wallets become crucial. If you are a financial institution or a large investor, OTC trading could provide smarter exposure to crypto assets.
FAQs
1. What is OTC trading in crypto?
It is the trading of cryptocurrencies directly between two parties, normally arranged or facilitated by a desk, without a public exchange involved.
2. Is OTC crypto trading safe?
Yes, it is safe as long as it is done through reputable desks and platforms like TransFi, which ensures compliance and security infrastructure.
3. What advantage does using a crypto OTC desk offer?
You obtain individual attention, fixed price, no slippage, and quiet settlement of large trades.
4. How do you execute cryptocurrency trades over-the-counter?
One needs to contact an OTC desk, negotiate pricing and agreements, and settle through secure means like TransFi Wallet or the equivalent.
5. What is the distinction between OTC and exchange trading?
OTC trading is private, ideal for larger quantities, whereas exchange trading is public and better for smaller volume trades made frequently.
Table of Contents
Suggested Article
Explore our products

Make global payments at the speed of a click

Accept payments, remove borders.

Unlock Seamless Digital Currency Transactions Anywhere