More people have joined the cryptocurrency market in the last few years. Crypto trading is usually the exchange of cryptocurrencies. Crypto trading operates like forex where you can buy or sell crypto coins. You can exchange your Bitcoin for USD or Euro or buy Bitcoin or other cryptocurrencies with the traditional currencies. It is also possible to sell or buy cryptocurrencies on different platforms. For instance, you can trade on the digital crypto exchanges or over-the-counter.
In most cases, traders use the crypto exchanges although Bitcoin over the counter trading offers a better option for high-volume traders. Usually, Bitcoin OTC is trading option designed for high-volume traders. The smaller Bitcoin orders can be placed directly on the cryptocurrency exchanges. However, large-scale traders like the high-net-worth individuals, hedge funds, and private wealth managers opt for OTC Bitcoin trading.
Basically, OTC trading involves trading your cryptocurrencies outside the traditional crypto exchanges. High-volume traders choose to complete their trades outside the digital exchanges for various reasons. There is a higher risk of slippage if large orders are placed on the digital crypto exchanges. This would result in a different price other than the expected one for the specific trade. Because the traditional exchanges may not have enough liquidity for your order, it would be a disadvantage. This will result in a single order being split into several small orders.
After your large order has been split into smaller orders, such small orders will be traded at different prices. Since the price would move towards an unfavorable direction, it would be a big disadvantage for the investor. The investor would be disadvantaged because the purchase will become expensive. Using the Bitcoin OTC broker for institutional traders and high-net-worth individuals is great for the following reasons.
1. Safe to use trusted brokers.
Traditional crypto exchanges have increasingly become a target by hack attackers. Crypto exchanges that have fallen victims have seen many investors lose their investments. When you have a trusted Bitcoin broker, it becomes safer for your investment since you will not be exposed to the risk of hack attacks.
2. Faster trading.
For large-scale trades, it can take longer to complete the process if placed on the traditional crypto exchange. Such long trading times occur because digital crypto exchanges may not have adequate liquidity to complete large orders. There is, however, faster processing time when you use an OTC broker.
3. Trade any amount.
Large orders would not be possible if a crypto exchange has set a trading limit. There would also be a withdrawal limit as well. There are, however, no such restrictions with Bitcoin OTC broker.