HomePress ReleaseCrypto OTC Trading: Benefits over Traditional Crypto Trading

Crypto OTC Trading: Benefits over Traditional Crypto Trading

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Are you looking to make a long-term investment in crypto, or planning to carry out a large value investment in the asset class? You may want to consider crypto OTC trading rather than doing it the traditional way. Over the counter trading has many additional benefits, while giving heightened protection to your personal information and finances!

In this post, we discuss the whats and the whys of crypto OTC trading, and find out why it is a good option for you! As a bonus, we also give you the address to the best possible crypto OTC trading market in Europe you can onboard- Megixo!

What is crypto OTC trading?

Crypto OTC or over the counter trading is like the VIP section of the cryptocurrency market. Imagine you want to buy or sell a large amount of cryptocurrency, say Bitcoin, but you don’t want to disrupt the market by placing a massive order on a regular exchange. That’s where OTC trading comes in.

In OTC trading, you deal directly with a trusted broker or another party, often in a private and personalized manner. It’s like making a backroom deal, but legitimate and secure. This method is popular among institutional investors, big-time traders, and even miners who handle substantial volumes of crypto.

One major perk of crypto OTC trading is privacy. OTC trades aren’t usually visible on public order books, so your intentions aren’t broadcasted to the market. Negotiation is also on the table; you can haggle over the price and terms.

Plus, if you’re keen on converting your cryptocurrency into regular money (like euros), OTC desks often offer this service, making life simpler.

Just remember, while OTC trading has its perks, it’s not without risk. Always work with reputable OTC desks, conduct proper due diligence, and understand the process thoroughly before diving in.

How to participate in OTC crypto trading?

Megixo for crypto OTC trading in Europe

You can identify a platform like Megixo, an OTC trading market in Europe, and easily carry out crypto OTC trading in just a few simple steps:

  • Identify Your Needs: Determine what cryptocurrencies you want to trade and in what quantity. Crypto OTC trading is often used for large trades, so having a clear understanding of your requirements is essential.
  • Find a Reputable OTC Desk or Broker: Look for a trustworthy OTC desk or broker that specializes in the cryptocurrencies you want to trade. Do thorough research, check reviews, and ensure they have a good track record for security and reliability.
  • Contact the OTC Desk: Reach out to the chosen OTC desk or broker through their official channels, whether it’s a website, email, or phone number. You may need to provide information about your trading requirements and intentions.
  • Negotiate Terms: Crypto OTC trading often involves negotiation on price and terms. Discuss your trade’s specifics, including the cryptocurrency price, settlement method (fiat or crypto), and any other conditions that are relevant to your trade.
  • Due Diligence and Verification: OTC desks may perform due diligence and verification procedures to ensure the legitimacy of both parties. Be prepared to provide identification and other necessary documentation as part of Know Your Customer (KYC) procedures.
  • Agree to Terms: Once both parties agree on the terms, the OTC desk will create a trade agreement or contract outlining the details of the transaction. Review this document carefully, and when you’re satisfied, sign it.
  • Execute the Trade: Once all conditions are met, the OTC desk will execute the crypto OTC trading for you. The cryptocurrency will be then transferred to your wallet, and the payment will be made to the seller’s account.
  • Settlement: Ensure that all aspects of the trade are settled according to the agreed terms. Verify the receipt of your cryptocurrency and confirm the payment has been received by the seller.
  • Secure Your Assets: After completing the crypto OTC trading, transfer your purchased cryptocurrency to a secure wallet. This minimizes counterparty risk and enhances the security of your assets.

Differences between crypto OTC trading and regular crypto trading

Crypto OTC trading and regular crypto trading on exchanges are two distinct methods of buying and selling cryptocurrencies, each with its own set of characteristics and advantages. Here are the key differences between the two:

 

 

Regular crypto trading Crypto OTC trading
Trading Environment Regular crypto trading takes place on public cryptocurrency exchanges where buyers and sellers place orders on an open order book. These exchanges provide a platform for users to match their orders with others in real-time. Crypto OTC trading occurs off-exchange, often through brokers or peer-to-peer networks. It’s a private, negotiated process that doesn’t rely on order books. OTC trades are not typically visible to the public.
 

Order Types

On regular crypto exchanges, traders can use various order types such as market orders, limit orders, and stop orders to execute trades. These orders are matched automatically based on predefined criteria. OTC trades are customarily negotiated, allowing for more flexibility in pricing and terms. Buyers and sellers can discuss and agree upon the specific details of the trade, including the price.
Trade Size Regular exchanges are well-suited for small to medium-sized trades. Attempting to execute a large order on an exchange can result in slippage, impacting the market price. Crypto OTC trading is primarily used for larger trades, often involving significant amounts of cryptocurrency. It’s designed to minimize market impact, making it ideal for high-net-worth individuals and institutional investors.
Privacy and Transparency Regular crypto trading on exchanges is public and transparent. Trades are visible on the order book, and transaction history can be viewed by anyone. Crypto OTC trades prioritize privacy. They are typically not displayed on public order books, providing discretion for buyers and sellers. However, OTC desks often maintain transaction records for compliance purposes.
Fiat Currency Transactions Exchanges facilitate the trading of cryptocurrencies against other cryptocurrencies (crypto-to-crypto pairs) or against fiat currencies (crypto-to-fiat pairs).

 

OTC desks often offer fiat-to-crypto and crypto-to-fiat services, allowing users to convert cryptocurrencies directly into traditional currencies like USD or EUR.
Counterparty Risk Exchange users face counterparty risk, as they are trading directly with other users on the platform. Security and trustworthiness can vary among exchange users. Reputable OTC desks and brokers perform due diligence and verification, reducing counterparty risk. Parties involved in crypto OTC trading often have a higher level of trust in each other.

In summary, if you value flexibility, privacy, and large value transfers that allow you to turn your crypto into fiat and vice versa with ease, crypto OTC trading should be your pick!

Crypto OTC trading with Megixo

Megixo is the friendliest crypto OTC trading market in Europe; they offer their services in both Slovak and English for the greatest efficiency in trades. You can buy cryptocurrencies with euros directly on Megixo, avoiding the need for third-party exchanges. Their dedicated team in Slovakia helps newcomers learn and execute trades, making it accessible to all.

Megixo further stands out with its low fees in the crypto OTC market in Europe, ensuring cost-efficiency. Transparency and security are paramount; transactions are conducted with transparency, and quick KYC processes enhance safety. Plus, Megixo prioritizes the safety of your funds and personal information. They understand the crypto market’s volatility and ensure fast transaction execution to get your gains to you as swiftly as possible!

Sign up on Megixo today to start crypto OTC trading!

 

Image: Benefits of crypto OTC trading over traditional trading| source

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