What is OTC?

OTC (over-the-counter) means trading without the use of traditional exchanges or intermediaries, where sellers and buyers directly agree on transaction details such as price, payment method, and deadline. In the traditional financial market, OTC serves as an alternative for companies that do not meet the strict criteria of exchanges.

Assets such as stocks, debentures, and investment funds can be traded without the need to meet so many formal requirements. It is present in different markets, and crypto assets could not escape it. Thus, OTC trading with cryptocurrencies allows the buying and selling of digital assets outside the environment of public exchanges, offering a more private and personalized approach.

Alright, but how does it work in practice?

OTC trades create spaces where buyers and sellers meet, being able to indicate their offers and conditions. The transaction can occur via Trading Desks or through Platforms that facilitate the process. In general, the script is the same for both:

You can find an existing offer that meets your needs or create your own with specific terms. Once the parties agree on the rate, payment methods, and other details, the transaction is recorded and monitored to ensure compliance with the terms.

OTC Platforms function as facilitators, connecting buyers and sellers. They ensure that the agreed terms are fulfilled and, in case of disputes or issues, act as mediators to resolve the conflict. This gives users an extra level of security during their transactions.

Trading Desks operate in two ways: some assume the risk of the transaction using their own funds to buy or sell assets, while others act as intermediaries, charging a brokerage fee. They play a fundamental role in enabling large crypto transactions. They offer greater privacy and mitigate market volatility, allowing the buying and selling of large volumes without causing significant price fluctuations.

Whatever the model, cryptocurrency OTC transactions are ideal for investors and/or institutions that need discretion and flexibility.

Who is it for?

OTC is widely used by large investors or companies that need to carry out high-volume transactions. For example, if someone wants to buy 1,000 bitcoins, it is unlikely to find that quantity on a single exchange. Instead of splitting the purchase into several parts, OTC allows for direct and often faster and more economical trading. Let's see some examples:

• Situation 1: Alessandra 🧑 wants to sell 15,000 Tether for dollars. She creates an offer on an OTC platform and receives two proposals. After negotiating with potential buyers, she chooses the offer that best suits her needs. With the completion of the transaction, the OTC platform confirms that both sides have complied with the terms.

• Situation 2: Daniel 🥸 needs to buy a large amount of USDC for his company. He contacts an OTC trading desk for a quote, based on the amount of USDC he wants and the current market conditions. After receiving the offer, Daniel negotiates the terms, such as exchange rate and payment method. With a contract established, the OTC desk handles the process, coordinating the transfer of funds and ensuring the delivery of USDC as agreed upon. Providing Daniel with a secure and efficient way to buy USDC in large volume, avoiding the complications and volatilities of traditional exchanges.

To Clear Up Doubts: Questions and Answers That Help

• Can you buy any crypto on OTC?

  Yes, OTC trading allows the purchase of Bitcoin and many other cryptos as long as someone is selling.

• In a few words, how does the trading of crypto assets in the over-the-counter market work?

  The process is simple: buyers and sellers agree on the terms of the transaction, and the OTC platform helps ensure that everything goes as planned.

• What is the minimum to trade on OTC?

  Each OTC platform sets its own minimum limits. Some may require high-value transactions, while others have more accessible minimum values.

How to Trade OTC in Brazil?

If you are thinking of entering the OTC market in Brazil, it is important to work with reputable companies. Here at Coin Nodes, we offer security, good prices, and integrity for OTC trades. Our team ensures transparent transactions and a high level of security to protect your investments. Do not hesitate to contact us for a quote!

So, before venturing into the OTC market, whether in the traditional financial sector or in the cryptocurrency market, make sure to work with reputable companies. We at Coin Nodes are ready to help ensure that your transactions occur safely and efficiently. Remember, diversification and careful analysis of each investment are key to protecting your assets in this dynamic and less regulated environment.