What is OTC trading?
When you trade cryptocurrencies, there are two main ways to do it - either via exchanges or over the counter (OTC).
Exchanges (like Binance) act as a marketplace that brings in liquidity from traders from around the world. On an exchange, you’re able to see an aggregated order book (a list) of bids (where people want to buy) and offers (where people want to sell). You can see exactly how much you can buy or sell at each price, and each trade is clearly published for everyone to see. The exchange takes care of wallet management, security, KYC/AML and provides a safe and user-friendly platform for users to trade on.
In general, trading on exchanges is great as it is simple and transparent. The problem with trading on exchanges is that sometimes this transparency makes it difficult to trade huge amounts in one go without significantly moving markets.
Unlike trading on an exchange, OTC trades are conducted directly between two counterparties. It’s the easiest way to trade a large block of coins in one go. Each trade is a bilateral agreement between a buyer and a seller - no one else sees the discussion, which allows you to discuss trading large sizes without fear of affecting the markets. The trade can be as simple or as customized as you like.
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