Can you explain the difference between OTC and exchange trading in the cryptocurrency market?

1 answers

• Dec 27, 2021 · 3 years ago
  OTC trading and exchange trading are two different methods of trading cryptocurrencies. OTC trading refers to transactions that occur directly between two parties, without the involvement of an exchange. This method is often used for large trades or for cryptocurrencies that are not listed on exchanges. On the other hand, exchange trading takes place on a cryptocurrency exchange platform, where buyers and sellers place orders and the exchange matches them. The main difference between OTC trading and exchange trading lies in the execution and liquidity. OTC trading allows for more flexibility in terms of execution, as the terms of the trade can be negotiated privately between the parties involved. However, exchange trading offers more liquidity as there are usually more participants on the exchange. In terms of pricing, OTC trading often involves negotiated prices, while exchange trading relies on the supply and demand on the exchange to determine the price.
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