OTC Crypto Trading, Crypto has undoubtedly revolutionized how financial transactions are made. Thanks to the keen interest and increasing investments from institutional investors, the need for bulk crypto purchases is at an all-time high.
Buying high-volume crypto comes with its own challenges. Traditional coin exchanges do not offer the efficiency and buy bulk crypto. Many crypto merchants often face difficulties while buying or selling crypto in bulk. If you wish to buy 1000 BTC in a single order, it wouldn’t be possible for a single exchange to avail such volume at once. On top of that, the volatile nature of crypto would make it difficult to accommodate all the crypto into a single order as the price keeps on fluctuating. That is when OTC or Over The Counter crypto trading exchanges come to the rescue.
Numerous HNIs, Self-Managed Super Funds(SMSF), and high-volume traders buy crypto in bulk. They understand that making a high volume crypto purchase can disrupt market prices, and hence they prefer trading crypto on OTC platforms. OTC platforms cut off the middleman, i.e. exchanges, allowing the buyer and seller to trade crypto without intermediaries. If you plan to buy crypto in bulk, here are four benefits of OTC crypto trading you must know.
- Higher liquidity
Higher liquidity is one of the major benefits of OTC trading. It is known that traditional crypto exchanges often face difficulties while processing high-volume crypto purchases. When HNIs and bulk crypto traders want to make a high volume crypto purchase, the exchange breaks down the order into smaller chunks of orders. Though it helps exchanges process the purchases easier, the buyers often have shed an enormous amount of money due to fluctuations in coin pricing. It wouldn’t have made much difference for small purchases, but a high volume crypto purchase involves thousands of crypto units. The buyer has to shed hundreds of thousands to purchase in chunks.
On the other hand, OTC exchanges offer higher liquidity than traditional exchanges. The buyer can purchase the entire volume in a single order and doesn’t have to pay a huge amount unnecessarily.
- Confidentiality
The whole concept of blockchain is based on the idea that no one should be able to have knowledge of the transaction or can control, limit or decline the transaction except the two parties involved. OTC platform embodies this principle in its core concept.
OTC platforms involve only two parties- the seller and the buyer. There are no intermediaries that govern the transaction or have access to any of the information regarding the transaction. That means the details of the buyer, seller, and the amount of the transaction stay confidential. Thanks to the confidential nature of the transaction, the seller and buyer can complete the transaction without jeopardizing their identity and the transaction itself. It is a much-needed aspect of high-volume purchases as millions of dollars are involved in the purchase.
- Higher transactional security and fewer scams
One of the major concerns high volume crypto buyers have is the security of their transactions. As every coin has two sides, the booming cryptocurrency industry has a dark side. Many novice investors often get scammed by fraudsters and fake exchanges. If you think about when a third party governs a transaction between two parties, they usually have a lot of sensitive information that should be kept confidential. Unfortunately, hundreds of scammers create fake crypto exchanges or counterfeit versions of legitimate exchanges and lure crypto traders and investors into making transactions on their fake platforms. According to NBC News, crypto scammers looted $14 billion worth of cryptocurrency in 2021. With such alarming numbers, it’s evident that crypto merchants must differentiate between the real and fake crypto platforms, especially as the transactions are worth several millions of dollars.
Read more: Things To Know About Trading Cryptocurrency
As OTC platforms do not charge anything from the transitions, they essentially don’t have anything to do with your transactions. Only the seller and buyer know about the transaction and can control it. That means when you transact on OTC platforms, you don’t have to worry about getting scammed by exchanges. It’s also possible for the buyers and sellers to track each other.
- Instant transaction
As mentioned earlier, centralized exchanges break down the high volume transaction into multiple smaller transactions. Due to that, the transaction often gets stretched over time. The increased time frame increases the chances of fraud and can delay further transactions. The buyer and seller have to wait until all the transactions are complete. On the other hand, the OTC platform allows you to perform every transaction in one order. That means you can complete the transaction instantly.
OTC platforms offer numerous benefits over traditional, centralized platforms. The OTC platform offers expert guidance and seamless support to help high volume buyers and sellers perform the transaction without any hassle.