While the crypto market is relatively small in comparison to other financial markets, it is incredibly large in terms of volume. Unlike the stock market and forex market, where millions of dollars are traded each day, the crypto market is easily manipulated with very small amounts. Trading at an OTC desk reduces the amount of attention, market movement, and transparency associated with a transaction. As a result, you can complete any transaction, regardless of the size.
Before investing with an OTC crypto desk, it’s important to check their reputation. Look for complaints on the internet, or at least Facebook. Make sure you trust your broker and have a positive experience. OTC trades can be complicated, so be prepared to do some legwork. You’ll need to set up an account and provide proof of ID and address. Then, once you’re approved for trading, you’ll transfer fiat money to your bank account or a trusted payment processor. After that, you’ll be able to withdraw cryptocurrency.
Another popular OTC desk is FalconX, which specializes in institutional customers. FalconX limits its OTC desk to investors with at least $10 million AUM. Cumberland is a distant third. The company started as a subsidiary of DRW, originally focused on mining cryptocurrency, but only began trading in 2015 when it saw the potential for trading. A recent sell-off on Thanksgiving gave investors a great opportunity to average into a long position.
OTC Crypto – Who Are the Top 5 OTC Desks in Crypto?
In addition to offering the best experience to their traders, OTC desks are also beneficial for whales. These traders trade a large amount of crypto, and they can use an OTC desk to trade it without moving the market. A large-scale buying or selling can lead to slippage. However, the OTC market can help you avoid this issue by maintaining a high level of privacy and security.
The top five OTC desks offer a combination of services. For instance, Kraken is an exchange and a bank, but it has an OTC desk that supports all popular cryptocurrencies. You can trade over ninety different cryptocurrencies with Kraken. In addition to their comprehensive listing, Kraken’s OTC desk also offers personal one-on-one service. And they’re open 24 hours a day to help you with your trading needs.
OTC brokers are often used by big players that sell large amounts of cryptocurrencies. If you place a $30 million sell order on a single exchange, you’ll end up with a price slippage of five to ten percent. OTC brokers also provide better liquidity, and the ability to lock in a quotation with the option to settle later. You can lock in the quote and lock in a price while the transaction is pending.