What is OTC?

Modified on Thu, 20 Aug 2020 at 04:34 PM

OTC Trade stands for Over the Counter trading methodology through which unlisted crypto assets can be traded on an exchange platform. This means that if a crypto exchange platform supports OTC trade, then it will be able to deal with unlisted cryptocurrencies on its platform. Such type of trading process is usually favored by many large scale traders and hedge funds. OTC trade is usually handled by brokers that have a high trust factor and are experienced in handling high volume crypto trades. They tend to avoid slippage issues that usually rampant in standard crypto exchanges by directly accessing liquidity providers that hold large amounts of crypto assets with them.

Benefits of OTC trading

Although standard crypto exchanges and online crypto markets provide users and investors with a plethora of cryptocurrency choices to invest in while offering simple fiat to crypto transactions, there is a multitude of reasons to use OTC trading for crypto needs.

  • Since the traditional crypto exchanges are still taking their initial baby steps, it often leads to a situation where there is an insufficient amount of liquidity available on exchanges in order to process large trades. This could result in a phenomenon called slippage where high volume trading on crypto exchanges result in an unfavorable change in the crypto prices before the trade is complete. On the other hand, OTC trading allows traders to access a single price for every transaction that is done on the platform.

  • Standard crypto exchanges have been targeted and often fallen prey to hacking attempts done by third-party fraudulent elements. In order to avoid the risk of losing your risk to such elements, OTC trades through a broker that has a high trust factor in order to reduce or eliminate such risks.

  • OTC trades also provide faster trading as compared to standard crypto trade exchanges as they often face liquidity issues while processing large volume trades.

With BuyUCoin you can trade with 0% trading fees on the OTC counter, if you hold 1% worth of BUC tokens of your INR/- amount in your wallet

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