Why do some investors prefer OTC trading over traditional exchanges for buying cryptocurrencies?

3 answers

• Gotfredsen HawkinsNov 21, 2021 · 4 years ago
  One reason why some investors prefer OTC trading over traditional exchanges for buying cryptocurrencies is the ability to execute large trades without impacting the market. OTC trading allows investors to buy or sell large amounts of cryptocurrencies without causing significant price fluctuations. This is particularly important for institutional investors or high-net-worth individuals who want to maintain price stability and avoid slippage. Another reason is the increased privacy and anonymity offered by OTC trading. Traditional exchanges often require users to go through a KYC (know your customer) process, which involves providing personal information and verifying identity. OTC trading, on the other hand, can be conducted directly between parties without the need for such extensive verification. Additionally, OTC trading provides access to a wider range of cryptocurrencies. While traditional exchanges typically list popular cryptocurrencies, OTC desks often offer a broader selection of digital assets, including those with lower trading volumes or limited liquidity. Overall, OTC trading offers advantages in terms of trade size, privacy, and access to a diverse range of cryptocurrencies, making it an attractive option for certain investors.
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• InstruistoNov 30, 2020 · 5 years ago
  Some investors prefer OTC trading over traditional exchanges for buying cryptocurrencies because it allows for more personalized and flexible trading arrangements. OTC desks often provide customized services tailored to the specific needs of individual investors. This can include assistance with large block trades, negotiating favorable prices, or providing market insights and analysis. Furthermore, OTC trading can offer faster execution times compared to traditional exchanges. The direct communication between buyers and sellers in OTC transactions eliminates the need for order matching and can result in quicker trade settlements. It's worth noting that OTC trading is not limited to individual investors. Many institutional investors, such as hedge funds or asset managers, also prefer OTC trading due to the personalized service and flexibility it offers. In summary, the personalized trading experience and faster execution times provided by OTC trading make it a preferred choice for some investors over traditional exchanges.
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• Nikki KFeb 11, 2025 · 5 months ago
  BYDFi, a leading digital asset exchange, recognizes the benefits of OTC trading for certain investors. OTC trading allows investors to enjoy a more personalized and private trading experience. It provides the opportunity to trade large volumes of cryptocurrencies without impacting the market and offers access to a wider range of digital assets. In addition, OTC trading can be particularly advantageous for investors who value privacy and want to avoid the extensive KYC process required by traditional exchanges. BYDFi's OTC desk ensures that investors' personal information remains confidential while facilitating secure and efficient transactions. Overall, OTC trading offers unique advantages that cater to the specific needs of certain investors, and BYDFi is committed to providing a seamless and reliable OTC trading experience.
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