OTC — a place for million dollar deals


For the article about OTC

When it was created in 2009, Bitcoin could only be purchased directly from each other on OTC markets. While the number of cryptocurrencies has steadily increased, and they became known far beyond geeky tech circles, centralized and then decentralized exchanges began to appear. But the OTC market still remains in demand. Small amounts are usually traded between users directly, but there are specialized platforms for big players allowing to make deals of tens and hundreds of thousands of coins. However, not everyone understands how these platforms work and their main differences from conventional exchanges.

Differences from an ordinary exchange

The main difference between OTC platforms and an ordinary exchange becomes especially noticeable when making transactions for large amounts. Exchanges often have limits affecting order size. But the main difference for an investor is the inability to have a fixed exchange rate for all coins. So when an investor’s buying on an exchange, the prices fluctuate continuously. Large volume creates demand which cannot be satisfied at once.

We can learn it from history. In 2013, just one deal in ₿25 000 led to a 50% price jump. And, although the total trading volumes have increased, a purchase order of several thousand coins can significantly push the rate, albeit not in percentage, but in absolute terms for sure.

It is the over-the-counter market that allows avoiding difficulties with execution. The over the counter market prices are not standardized, which allows participants to define their own terms. In general, the final price is determined on the basis of exchange prices plus a premium or discount. It depends on the amount and the chosen currency pair.

Despite the emergence of OTC before centralized exchanges, it’s only since early 2013, when its transaction volume and market capitalization became material. At first, the founders of the platforms were major miners and traders. Currently, deals worth hundreds of thousands and millions of dollars are being made on such platforms. Professional investors prefer to buy cryptocurrency at a time at a fixed rate.

Checking before making a deal

While small OTC platforms are used by users to trade among themselves independently, large OTC exchanges are responsible to their customers. A number of OTC services may require applicants to confirm their identity. However, this rule violates the very essence of cryptocurrency. Some people trust such exchanges more, but only experience and longevity have proved to be the best indicator of reliability.

The key disadvantages involved in trading over-the-counter stem from the need to provide documents and personal data. Even such giants of the IT market as Google are not always able to provide reliable storage of the collected information. Therefore, you should be very careful when transferring your documents to unverified partners.

Availability of currencies for OTC deals

Another advantage of OTC exchange for large amounts is the ability to choose any currency pair. Usually, exchanges offer only standard currencies, like bitcoin and ethereum from cryptocurrencies and dollar and euro from fiat money. But if you want to exchange exotic coins, OTC exchanges are what you need.

And don’t forget the possibility to discuss transfer mean in OTC. While some clients don’t care much about privacy, others prefer to keep their activities low-key. It is especially convenient in the latter case to take advantage of fixed cash pay-out in dollars or rubles.

Why use an OTC exchange

Buy or sell cryptocurrency for cash OTC may be needed for various reasons. For example, you may need to make some urgent payment in the interests of the business. You can trade here in both fiat and crypto markets. The latter is convenient to use for international payments. Despite the fact that decentralized money is banned them from being used as a means of payment in Russia, this only means that they cannot be accepted. It is still possible to pay with cryptocurrency with foreign partners.

НOften you will find the opposite situation. There may be a case when you live abroad and need to pay someone in Russia. In this case, you can conclude an OTC deal when an OTC exchange acts as an intermediary and the recipient of the cryptocurrency, and pays off the supplier of goods or services for you.

Key features of OTC deals

There is no easy way to profitably exchange cryptocurrency. Each individual case requires a separate solution. But OTC deals have a number of key features:

  • the main feature is reliability, no one wants to lose their money;

  • profitability - everyone would like to make a profit;

  • convenience - this means both the place and the transfer rate of a OTC deal, as well as many other parameters that make the exchange comfortable for a client.

In addition to all of the above, exchanges don’t have numerous commissions and fees. While almost all replenishment methods are made without fees, using exchanges is always associated with a certain spread, which further increases the difference in the buy and sell prices. Also, centralized exchanges always charge fees for withdrawal, in addition to the payment system’s fees. The OTC agreement solves all these problems at the early stage. Therefore, the terms are always clear and transparent - no need for complex calculations.


Over-the-counter trading outside of centralised exchanges has many uses in many situations. Its benefit is especially noticeable when exchanging large amounts or using rare currencies. Also, OTC offers the purchase or sale of cryptocurrency for cash for both internal and international settlements, which will help preserve confidentiality.