In general, over-the-counter (OTC) trading is a deal that occur directly between two interested parties – that is, without the supervision of the exchange.
OTC deals involving a wide range of assets – from commodities to financial instruments such as shares and derivatives. Unlike traditional exchanges, the OTC market is decentralized and does not have a physical location, and trading is done through a network of dealers. Traders should not be directly involved in the process, since they can seek the help of intermediaries, such as brokers, or OTC table.
OTC securities trading desk most of which are not listed in the official due to various reasons. Often, smaller companies can not meet the formal exchange listing requirements or pay the costs of the major industry players. That’s where OTC trading comes into play.
This market not only brings risks faced by the counterparty during the deal directly, but also the freedom and opportunity, which is why the OTC trading has become increasingly popular among qualified investors, traders and even the commercial giant. For example, Nestle, Bayer, Danone SA and several other large companies are trading their shares on the OTCQX, the level of the top three markets for OTC stock trading.
With regard to industrial cryptocurrency, OTC table has been gaining popularity among those who are willing to sell a large quantity of coins, such as miners crypto genius guide account or early investors crypto. On the other hand, there are many investors – including the high profile – are willing to buy crypto without using the major exchanges.
The OTC market is considered very promising by investors crypto. Perhaps this is why big companies like Binance, Coinbase and Circles continue to open their own OTC table right in the middle of winter crypto, when a large degree of bitcoin and altcoins far from optimistic.
According to some estimates, the current crypto OTC trading has a daily volume greater than the major exchanges. For example, researchers from Digital Assets Research and Tabb Group found that the OTC market is facilitated $ 250 million to US $ 30 billion in trade per day in April 2018, while the exchange handled about $ 15 billion in daily trading during the same period.
Who are the main customers of OTC table crypto?
crypto miners who sell their profits represent a significant segment of the OTC market sellers, while hedge funds and institutional investors are one buyer.
In October 2018, Cumberland OTC desk, crypto unit of Chicago-based trading of DRW Holdings LLC, revealed that most of the deals that took place during Asian business hours. Experts later told Bloomberg might be a sign that the miners based in Asia, as this Bitmain Antpool and BTC.com, who liquidate their coin through OTC trading.
However, the OTC market is clearly far from being dependent on the miners. According to investigations conducted by Reuters, a kind of trade also involving investors rich, payment processors and, increasingly, hedge funds. As per 2018, the big players in this market are men in their mid-20s or early 30s. Most trading is done through online messaging services such as telegrams or Skype, through brokers or specialized OTC table.
Incidentally, some experts believe that the institutional investors, which is expected to drive the industry crypto for mass adoption, broadly interested in buying off-exchange crypto great. This statement has partly been corroborated by recent news about 100 companies crypto – like Huobi, Coinbase and Bithumb – launched their own OTC table exclusively for institutional clients.
In short, everyone who wants to buy or sell in bulk crypto without excessive regulation (and sometimes the better term) apply to trade OTC or middlemen working in the sphere.