What You Need to Know about Bitcoin OTC Broker
The cryptocurrency market is continuing to evolve as both small and big players look for better ways of trading. However, small crypto traders usually use digital currency exchanges to execute their trades. But not all crypto trades are carried out through such exchanges. There are many transactions performed away from the traditional exchanges through what is known as over-the-counter trading. Read more about
bitcoin over the counterOver-the-counter trading is not for everyone. Instead, it is designed for high-volume traders who want to sell or buy large amounts of bitcoin. It is often used by high-net-worth individuals and institutional investors. For high-volume trades, OTC bitcoin trading is considered the better alternative. First, placing large crypto trades on the traditional exchanges can move prices in an unfavorable direction which would increase the price for your transaction. That is usually known as slippage and occurs when a high-volume trade is placed on traditional exchanges.
To avoid the risk of slippage, bitcoin over the counter trading becomes a better alternative. Over-the-counter trading is, however, done through brokers or chat rooms. However, OTC brokers handle most of the OTC trades. A bitcoin broker will match a buyer to a seller. When trading over-the-counter, you might not know how the market looks like. This is different from trading on the exchanges where you can see the buy and sell orders.
Although OTC trading provides anonymity and price stability, going into OTC blindly can be even worse. The OTC brokers may take advantage of you and make a profit from you. However, there are certain tips that can make your experience better while trading over-the-counter.
When you place a large order on the traditional exchange, you will be showing your cards. Because of this, the market will react to take advantage of you. This is still possible with OTC trades. Although the trades are hidden, you can still expose yourself to brokers who would use the information to their advantage. There are certain common mistakes traders make when trading over-the-counter. Also see
bitcoin broker
One such mistake is shopping around. This usually happens because many people believe that shopping around is the best way to look for the best deal. Therefore, a high-volume trader will contact several OTC brokers to find out the rates. But the more brokers you contact, the more likely they will the information to their advantage. You can, however, avoid shopping around. You just need to call one or two bitcoin OTC brokers once you are ready to trade.