The cryptocurrency market is a sensitive one. A little change can have a huge impact on traders and investors across the globe. If an investor makes a big transaction in the market, the price will likely make a big (and likely unwanted) move as the order is being filled. Price moves that happen during fulfillment of an order and caused by these transactions are called “slippages.”
It is for this reason that investors cannot put all of their funds in the cryptocurrency market. Or else, they will risk making the market move against their favor. Because of this, they usually have to take small positions, which significantly limits their profit potential.
In Comparison to other Financial Markets:
Other financial markets have the same reaction as the cryptocurrency market. Large transactions make the price move. However, the cryptocurrency market is quite a reactive one. While other financial markets take a huge volume to make a significant market move, the cryptocurrency market does not take that much. This is probably the reason why traders and investors avoid cryptocurrency exchanges.
Introducing Crypto OTC Trading:
The crypto market’s volatility is probably making you feel a little uncomfortable about getting into cryptocurrency trading but there is a way around it. There is a way for investors to make big transactions without making prices move. It can be done with Over-the-counter (OTC) trading.
What is Over-the-Counter (OTC) Trading?
Over-the-counter trading is done outside cryptocurrency exchanges. Large-scale investors and high profile traders prefer this type of trading since it allows them to make transactions without causing slippages. If you are planning to invest large funds on cryptocurrencies then you should consider OTC trading.
Aside from allowing you to make big transactions without disturbing the market, OTC trading also lets you find better prices, have faster trading time and have a trusted broker.
How does crypto OTC trading work?
Over-the-counter trading works by first taking your order. Instead of forwarding your order to a cryptocurrency exchange, the broker will then publish your order within its network of traders and investors. This will let them get in touch with the trader who has what you need or several different traders who can fulfill your order. Once the broker has your order, it will complete the order in exchange for a markup.
How to Find OTC Trading Services:
Brokers are usually the ones offer OTC trading services. If you are looking for other options you can make OTC trades by simply getting in touch with traders who have what you need and make peer to peer transactions with them. You can find them in chat rooms such as #bitcoin-otc, which is hosted on IRC channels.
Another option you have is to use Bitcoin ATMs. These ATMs allow you to convert currencies into digital coins without placing an order in cryptocurrency exchange.
An Important Thing to Keep in Mind:
With the process that takes place when fulfilling OTC orders, OTC trading takes more time than regular trading. Because of this, you will need to be more patient and even be proactive in getting your OTC order fulfilled.
If you want to trade cryptocurrencies without worrying about slippages then OTC trading would serve you well. It can also help you get better prices and make secure transactions. Get started by finding a broker offering OTC trading services.