• March 4, 2022

What is OTC Crypto Market?

OTC Crypto Market

The over-the-counter (OTC) crypto market is a place to trade cryptocurrencies that are not listed on a traditional exchange. Unlike the exchanges, the OTC market provides simple, transparent pricing and readily available liquidity. In contrast, the market for traditional equities and forex is fragmented and lacks the transparency and risk management tools that conventional trading platforms offer. Fortunately, the growing popularity of cryptocurrencies has spurred some institutional investors to start trading cryptocurrencies.

The OTC market takes up to 52% of the trade volume from centralised exchanges, and its influence is expanding on the digital asset market. Depending on the source, OTC trading can handle US$15 billion of daily crypto transactions, according to Bloomberg. Although the volume reported varies, it represents a massive increase in popularity over the past two years. If you’re looking for a reliable and low-risk way to trade cryptocurrencies, consider using an OTC desk.

Decentralized crypto OTC

The OTC crypto market has two distinct pools. The first is the lit pool, which displays various bids and offers to its dealer network. The second is the dark pool, which is a private exchange that allows institutional investors to buy and sell large quantities of financial products without making it public. However, these markets are still underdeveloped and have a higher liquidity requirement. This means that investors can only trade with institutional traders – and not the public.

What is OTC Crypto Market?

The second type of OTC crypto exchange is the OTC desk. The OTC market is dominated by institutions and professional market participants. These participants are using the digital dollar stablecoin (USDC) as their trading capital. Transactions on USDC are often made in minutes and costs only a few cents. In addition to these benefits, on-chain transactions are also more secure than off-chain transactions, which means the transaction can be traced in real-time.

The OTC crypto exchange desks can be used to trade cryptocurrency, but they are not an alternative to traditional exchanges. The OTC exchanges have order limits, which limit the volume they can trade. As a result, the OTC crypto market has no centralized exchanges. As a result, large OTC volumes are the most popular cryptocurrency exchanges. There are also some unregulated exchanges, which are often regulated.

The OTC crypto exchanges are generally categorized into lit and dark pools. The latter is the most popular and forms the bulk of the liquidity available to OTC desks. TYR Capital and Bittrex are the major institutional players in the OTC exchanges. These companies operate OTC desks for a fee. The liquidity of these OTC markets is not publicly disclosed. Moreover, a few companies are not open to the public.

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