What is OTC
OTC (over-the-counter) trading means trading without third parties and traditional exchange tools. A seller and a buyer themselves come to an agreement about an asset rate, timing, purchase methods, and other details.
Crypto OTC trading means trading digital assets without traditional exchanges or any tools related to them.
There are OTC platforms operating on the market to help buyers and sellers find each other. They guarantee execution of specified transaction terms. If the parties have claims against each other, an OTC platform investigates the situation and issues a verdict.
How does crypto over-the-counter trading work
Buyers and sellers use OTC platforms to offer their conditions. You can agree with an already existing offer and settle a deal, or you can publish your own offer with self-settled conditions.
When the parties have agreed on a rate, terms, transfer method and everything else, they create an offer for the deal. If both the seller and the buyer transferred assets according to the agreed-upon timing and conditions, an OTC platform would rank the deal as a successfully closed one. If one of the participants has questions or claims related to the transaction, representatives of this OTC platform can assist.
Who needs OTC trading
Mostly OTC is used by big sellers/buyers or businesses, because it is suitable for large transactions.
For example, John 🧔 wants to buy 1,000 bitcoins (lucky him!). It is a rare case when you can find such a big amount of coins on exchanges, so he has to split it in order to buy in parts from several sellers. It usually takes a lot of time and may cost you because BTC's price varies from seller to seller. As a result, John spends much more time and money than he planned.
An alternative is over-the-counter trading. John can simply make a no-third-party deal with a seller who has 1,000 bitcoins. It will save both time and money, and he won’t need to pay an exchange's fee.
To make it clear: OTC deals examples
Example #1. Adam 🥸 wants to purchase 30,000 Ethereum for euros. He decides to do that on an OTC platform. He choses one, creates an account, and starts looking for a suitable offer. Unfortunately, there are no such options. To speed up the process, Adam creates an order to purchase 30,000 Ethereum, which sellers can find on the platform and respond to.
A few minutes later Adam gets an answer from a user who is ready to set the deal. They discuss coin's rate and other transaction terms and then make a request for the operation using the platform. When Adam receives cryptocurrency and the seller gets his euros, the system closes the deal.
Example #2. Lisa 🧑 wants to sell 150,000 Tether for dollars. She already has an account on an OTC platform where she always finds buyers. Lisa creates an offer and almost immediately receives two prospective proposals. The first one includes the best rate, while in the second one the buyer can pay in cash dollars, which is better for Lisa. She chats with both users and finds out that the first one can provide a payment in cash as well, so she picks him.
The next step is the deal signing. At the moment Lisa receives dollars in cash and the buyer receives 150,000 Tether, the transaction closes.
To make it absolutely clear: non-obvious questions and answers
Can you buy bitcoin on OTC?
Yes. Over-the-counter trading can provide you with a fast and convenient purchase of the most capitalized cryptocurrency bitcoin (BTC).
How does over-the-counter bitcoin trading work?
Bitcoin over-the-counter trading works just like it does with any other asset. Both a buyer and a seller meet on an OTC platform. When terms and conditions are set, they can make a deal. If you have any problems, OTC platform representatives can assist you, as they are responsible for security.
What is the minimum for bitcoin OTC?
Each OTC platform settles its own requirements for both buyers and sellers. For example, the minimum amount for crypto purchases through Binance's OTC platform is 200,000$. Itez's conditions are much more convenient. The minimum amount for an OTC trade on our platform is 10 000€.
What is the best OTC platform?
There are many cryptocurrency-focused OTC platforms on the market, even Binance and Huobi have ones. You need to choose carefully, because sometimes pitfalls can hit you even if transaction conditions look fine. For example, some platforms hide additional fees that may be charged after a deal is closed, or there just might be a lack of promised liquidity.
Anyway, there are decent OTC platforms with fully transparent transactions, such as itez. We have favorable conditions, high liquidity, Lithuanian regulator license and a user-friendly interface. You can submit your request via link.
How to make money on over-the-counter trading?
That's simple. Traders usually agree to pay extra for an opportunity to make a one-time purchase or sale of a large amount of crypto. An OTC asset rate may be higher than the market one. Price difference allows you to earn on over-the-counter trading.
Here is an example. Jack 🧑🦲 wants to sell 10,000 Ethereum using an OTC platform. The local rate is $1,800, so he receives $18,000,000 for his coins. ETH rate on crypto exchanges is about 3% lower ($1,746). When the coins are sold, Jack buys Ethereum on an exchange using earned dollars. Due to the rate difference, he now gets 10,309 ETH ($18,000,000/$1746) instead of 10,000. Thus, Jack has 309 Ethereum profit.
We not only sell cryptocurrencies, but also conduct over-the-counter transactions. You can submit a request via link. If you have any questions, please contact us by email or on Telegram.
This material is not an investment recommendation. The financial and other transactions mentioned in the article are not a guide to action. Itez is not responsible for possible risks. The user should independently conduct an analysis on the basis of which it will be possible to draw conclusions and make decisions about conducting any operations with cryptocurrency and / or tokens.