Things You Should Know Concerning Bitcoin OTC Broker
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Today, crypto trading has become so popular. There are more traders and investors who have joined the crypto market. At the same time, there are now more crypto coins traded on the regular crypto exchanges. However, Bitcoin remains a popular crypto coin. Again, there are different ways how investors can buy or sell crypto coins. There are also small traders and large-scale traders. The small traders deal with small orders and they usually trade on the regular exchanges.
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On the other hand, large scale investors deal with high-volume orders worth millions or billions of dollars. Placing such a big order on the regular exchange would impact on the prices. Slippage usually happens when very large orders are placed on the main exchanges. This would move the prices towards an unfavorable direction.
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However, investors making large trades are still able to avoid price slippage. This is because they place such orders over-the-counter. This allows them to make private deals where investors buy and sell crypto coins without being displayed on the public order book. Therefore, there is increased privacy with bitcoin OTC. Because such OTC transactions are done privately, there is enhanced anonymity and minimal impact on the crypto market.
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Since large scale investors do not want to lose more due price slippage, OTC trading becomes the better alternative. However, OTC transactions can be completed in various ways. One such way is through bitcoin OTC brokers or the middlemen. OTC brokers have investors network, as well as cryptocurrency sellers. These investors keep them updated on the number of coins they want to buy or sell. Brokers will also know the investor who wants to sell or buy and when they want the deal done. As a result, they are able to match crypto sellers with buyers.
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Because bitcoin over the counter trading happens away from the regular exchanges, you need to find a trusted broker and establish a good relationship with the broker. However, there are certain advantages as to using a broker would be the better option. The first reason why a large-scale investor will prefer a bitcoin broker is because they want better prices. An OTC broker will ensure you get a single price unlike when a large order is placed on the regular exchange.
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On the other hand, trading over the counter is faster for large orders than when they are placed on the main exchanges. It might take several days to have the order completed since traditional exchanges may not have sufficient liquidity to complete the order at once. With a trusted OTC broker, however, processing time is faster.