Frequently Asked Questions on Bitcoin OTC
Now, as you have learned how our platform is operating regarding otc bitcoin trading, it is time to explain the basics of over the counter bitcoin trading and its special features. It is not a secret that financial markets have long been using over-the-counter facilities to buy or sell stocks not listed on the exchanges such as NYSE. Owing to the relative novelty of the cryptocurrency phenomenon, there could be some more open questions on how to trade these currencies and how would the otc bitcoin exchange function. So let us explain this to you in more detail.
What is OTC in Crypto?
OTC or over-the-counter is a well-known term in the sphere of traditional financial operations like buying or selling stocks. This term emerged since there were many companies that wanted to sell their stocks but could not be listed at the formal exchanges like the NYSE. At the same time, there were investors who would prefer more risky assets to invest in instead of going for a conventional exchange market.
In the broadest term, over-the-counter stands for the off-exchange type of BTC trading. It usually happens through the network of sellers and buyers as well as dealers. Thus, for over the counter bitcoin trading activities, it means that two people somewhere in the world are able to sell bitcoin over the counter or buy it without any interference of the regulator. The latter is a well-known feature of the formal exchange facility.
What is OTC BTC?
Otc bitcoin exchange stands for the trading of crypto assets directly between the two parties. Such trading can also involve other cryptocurrencies as well as fiat ones. For instance, you can easily swap Bitcoin with Ether there or run an otc bitcoin to USD deal. The most important condition here is the presence of a second party willing to be the counterpart in the deal.
There are also some essential players in the otc BTC trading process, namely otc bitcoin brokers. They are usually your first point of contact at the otc platform who process your requests and find appropriate deals. Thus, one may say that brokers play a vital role in the functioning of the whole over-the-counter cryptocurrency market.
How does an OTC Desk Work?
As already mentioned, the trade on such platforms is principally happening between two interested parties. However, there are still some institutional parties involved, namely bitcoin otc desks. Although this term sounds just as frustrating as the formal exchange one, in reality, it is much more flexible and pleasant to deal with.
Such desks evolved due to the fact that it was difficult to trade bitcoin otc in large amounts. If you wanted to do so, you would have to overcome numerous institutional and legal challenges. And by a large amount, we mean operations in value of 400 BTC, for instance. Thus, it was natural for a more straightforward and fast platform to develop, and its name today is exactly the bitcoin otc trading desk.
So, let us say that you are interested in buying 400 BTC. First, you would request a quote on a chosen platform. Second, you would be contacted by one of the desk’s traders, offering you a price based on current market rates and conditions. This is the time for you to decline, counter, or accept the offer. If you decide to go for it, then the desk is obliged to deliver you the agreed amount of currency at an agreed price per a legal agreement signed during the onboarding process.
Who is OTC broker?
Brokers on otc trading crypto platforms are the enablers of the processes and your passport to success. The role of this person would be to negotiate with buyers and sellers in order for a deal to take place.
The ultimate goal of this job is to find natural buyers and purchasers and bring them together. Provided the already existing network of traders in the btc world, brokers are capable of rendering their services with the highest rates of customer satisfaction. Nowadays, when going on such a platform, you can be sure that your deal will take place. It is only a matter of luck, how soon it is to happen.
What is the Bitcoin OTC Market?
OTC market stands for the over-the-counter market, or in other words, a sum of all peer-to-peer transactions taking place in a certain currency. For us, it is only the crypto otc stock that matters. Thus, one can state that the bitcoin otc marketplace is the main place for large investors to be actively engaged in.
Such markets operate with a number of players, including dealers, traders, brokers, and exchange OTC desks. These all represent different trading types and stand for a different kind of operations. However, they all belong to the bitcoin otc market size and thus create a huge playing field for investors across the globe. The two regions, especially involved in these activities, are Asia and North America, although it is difficult to state for sure due to the anonymity of operations.
According to the latest reviews, over-the-counter cryptocurrency trading is gaining momentum. It means that bitcoin otc markets are handling ever-increasing amounts of cryptocurrencies on a daily basis. To illustrate this, in April 2018, such a market would operate with deals valued up to $30 billion per day.
How to Get Bitcoin OTC Trading Info?
If you own large amounts of cryptocurrencies and would like to trade these, you will need to get some benchmark information on how to make it happen. Given a variety of platforms and exchanges, where this action can be performed, the ultimate goal would be to choose the most efficient one. Thus, one of the proven ways to get needed trading info is to contact a few platforms and get to know their terms and conditions. Once you are getting in contact with a broker, you will learn more about the price level offered by the otc, as well as the commission rate.
If you are on the lookout for more general information, then you should simply observe the market moves with all its drops and growths. Given that investors with large amounts of money could make a significant difference in currency prices, it is vital to keep an eye on their moves. This will help you make more informed and reasonable decisions regarding your personal assets.
Another way to get such a bigger picture is to keep track of the top wallets of the currency of your interest. Since blockchain allows us to see exactly how much individuals are holding, it is a proven indicator of whether someone is accumulating or selling off his/her assets.
Why Is the OTC Price for Bitcoin Higher than on Exchange?
OTCs are known to have better deal prices as they are not that highly regulated and offer a peer-to-peer type of handling. Trading Bitcoin assets on a formal exchange likely means drowning in the red tape and having very expensive deals. Exchanges are known to be extremely regulated and way too complicated for the simple operations people would like to perform there. Moreover, they are public record meaning that your name, as well as all the personal data inputs, is to be shared in the public record books.
However, there is also an alternative way to handle your cryptocurrencies legally being the over-the-counter market. There operations take place on a peer-to-peer basis with the lowest commission imaginable. Given that whale investors are more likely to trade on such platforms, thus creating constant supply and demand of a given currency, it becomes more cost-efficient to perform operations via such otc facilities.
Once you are getting in contact with a platform broker, you will get an estimated price of the BTC to be traded with. This estimated price usually represents a real market average and not the regulated exchange price. Therefore, it is often more beneficial to go on such platforms and trade; there is more time- and cost-efficient manner.
How Is OTC Trading Impacting the Bitcoin Price?
OTC trading can have an immediate impact on the market bitcoin price as it handles large deals of the whale investors. When such a large investor makes a certain moves by either selling or purchasing the currency, the rest of the market is trying to justify her/his actions and act in a similar way. Then it could create a higher supply or higher demand of the BTC on the market, thus directly impacting its price.
Taking into account that over-the-counter trading takes place outside the stock exchanges, theoretically, it should have zero effect on the price of bitcoins. However, if there is a large buyer in the OTC market, making inquiries, the word can come out, and this will affect the prices on the exchanges.
Imagine a company that has previously accepted bitcoins and now wants to cash out some of its assets – say, 8,000 BTC. This company would likely ask more than one over-the-counter broker for a suitable bid. At the same time, investors working in the over-the-counter market, and the exchange may end up selling BTCs in anticipation of lower prices caused by the seller’s major trading.
How to Cash out Large Amounts of Bitcoin?
When cashing out large amounts of btc, few things have to be taken into consideration: withdrawal restrictions, bank freezes, and taxes. In order to cash out these assets at the most beneficial rates and conditions, the majority of whale investors opt for a third party broker exchange. These brokers are most likely to offer the best deal for the large sums at the most beneficial conditions.
If you decide to opt out for the broker exchange, then it will usually take about 1-5 days for the money to reach your account. For EU customers, payments are conducted via SEPA with withdrawals being made in local currencies, so mainly euros. Whereas for the American clients, it is the SWIFT payment method, which is usually used by brokers, and therefore, the cashing out procedure takes place in dollars. There are also fees to be paid when using this method of cashing out.
How to Buy Bitcoin in Bulk?
Over-the-counter exchange is the best place to purchase bitcoins in bulk with the highest level of anonymity and security. It allows for a peer-to-peer operation, thus bringing a seller and buyer together immediately and at an agreed price. One can thus state that otc platforms are the perfect ones for bulk trading of cryptocurrencies.
If you are trying to deal with large amounts of cryptocurrency, you might have already encountered a few challenges. The first challenge is often low and volatile liquidity at the formal exchanges. This makes it almost impossible to perform a deal at a desired speed and price. The second challenge is that one’s order might be broken up into smaller ones creating a price discrepancy and inability to control all the operations at once. OTC provides solutions to all these challenges.
When it comes to the very process of buying or selling a currency through top crypto otc desks, this is how it happens: you should first fill out a form and indicate the details of your purchasing or selling request. Then you will be contacted by a broker with details regarding the price of the potential deal; lastly, it is for you to decide whether you accept it or not. Thus, after these three steps, you are likely to have concluded a deal on win-win conditions.
How to Buy Large Amounts of Bitcoin Anonymously
The over-the-counter exchange represents a peer-to-peer marketplace where trade is happening anonymously. While it is quite easy to purchase low amounts of the currency by keeping one’s privacy, the larger the sum gets, the more difficult it becomes on the formal exchanges.
As a prospective buyer of the currency, you have to simply contact an exchange broker and make a request for a certain amount of crypto-assets you are willing to buy. Then, the broker will try to find the most suitable deal for you with the fixed btc price and timely delivery.
What makes this way of purchasing large amounts of a cryptocurrency, especially appealing is complete anonymity. You are not required to provide any personal data or information since the transfer of cryptocurrency takes place through the blockchain system. In such a system, you only have to provide a security key to conduct a transaction, thus remaining in absolute invisibility.