OTC Crypto Trading Platforms
OTC Crypto Trading
The OTC markets are the place to buy and sell cryptocurrencies. Many of these markets are regulated by the U.S. Securities and Exchange Commission (SEC). OTC brokers don’t offer custody solutions. Therefore, customers must provide their own bank account, digital wallet, or escrow account to receive funds. Because they do not provide the custody solution, their clients are responsible for the settlement risk. The most common form of OTC trade is RFQ or Request For Quote. It occurs when a client requests a price quote. The request will expire in a specified time period, depending on the service provider. The other popular type of OTC trading is FOK or Fill or Kill.
The main issue with retail crypto exchanges is limited liquidity. According to CoinMarketCap, there are approximately seven billion dollars of daily cryptocurrency trade volume. Bitcoin, ethereum, and tether make up nearly 70% of the total. This limited liquidity affects the volume available per trade. Since tokenised assets are linked to physical properties, the volume is often very limited. This means that OTC trading platforms should be used sparingly and only in certain markets.
In addition to a dedicated trading desk, OTC trading platforms can facilitate the purchase and sale of cryptocurrencies. The trade is conducted between the desk and a counterparty. In 2018 alone, billions of dollars in crypto changed hands over the counter. Buying large amounts of cryptocurrency isn’t easy. That’s why many traders use OTC exchanges to purchase crypto. They’re an excellent alternative to traditional exchanges.
OTC Crypto Trading Platforms
A few companies are offering OTC services. For instance, Coinbase offers a hassle-free OTC experience with its dedicated institutional coverage team. Satstreet is a large digital currency brokerage based in Toronto. These exchanges are highly regulated by the SEC and FINTRAC. The platforms charge a flat fee and guarantee instant execution and post-trade settlement for their customers. This means that they’re secure enough for even institutional investors.
If you’re looking for a more sophisticated OTC platform, you can find one with a dedicated institutional coverage team. A good example of an OTC trading desk is Coinbase. The company’s OTC team is designed to support institutional investors. This platform provides customized liquidity to its clients. It’s also open around the clock, with only some exceptions. It’s important to note that the OTC marketplaces that offer a full-service solution have their own fees.
When it comes to security, Coinbase has several security measures. Aside from a 24/7 customer support team, the company offers a private chat group. Unlike most other online platforms, Coinbase also provides high security. Its multi-signature and regulated OTC services are the most secure. With these features, investors can benefit from a hassle-free experience when trading with coins. They can also take advantage of other crypto OTC services that help them access their cryptocurrency accounts.
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