How does außerbörslicher handel affect the price of cryptocurrencies?

4 answers

• Jan 14, 2022 · 3 years ago
  OTC trading, also known as außerbörslicher handel, refers to the direct trading of cryptocurrencies between two parties without the involvement of an exchange. This type of trading can have a significant impact on the price of cryptocurrencies. Since OTC trades are not conducted on an exchange, they do not contribute to the price discovery process that occurs on exchanges. As a result, the prices of cryptocurrencies in OTC trades may differ from the prices on exchanges. OTC trading can be particularly useful for large institutional investors who want to trade large volumes of cryptocurrencies without causing significant price fluctuations on exchanges.
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• Jan 14, 2022 · 3 years ago
  When it comes to regular exchange trading, the prices of cryptocurrencies are determined by the supply and demand dynamics on the exchange. The more buyers there are at a certain price level, the higher the price will be. Conversely, the more sellers there are at a certain price level, the lower the price will be. In contrast, OTC trading allows for more flexibility in price negotiation between the buyer and the seller. This means that the prices of cryptocurrencies in OTC trades can be influenced by factors other than supply and demand, such as the negotiating skills of the parties involved.
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• Jan 14, 2022 · 3 years ago
  From BYDFi's perspective, außerbörslicher handel plays a crucial role in the cryptocurrency market. It provides an alternative trading option for investors who prefer to trade large volumes of cryptocurrencies without impacting the market price. OTC trading can also help improve market liquidity by allowing for the efficient execution of large trades. However, it's important to note that OTC trading is not without risks. Since OTC trades are not conducted on exchanges, there is a higher counterparty risk involved. Therefore, investors should exercise caution and conduct thorough due diligence when engaging in OTC trading.
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• Jan 14, 2022 · 3 years ago
  In summary, außerbörslicher handel, or OTC trading, can affect the price of cryptocurrencies by providing an alternative trading option that may result in different prices compared to regular exchange trading. OTC trading can be beneficial for large institutional investors who want to trade large volumes of cryptocurrencies without causing significant price fluctuations on exchanges. However, it's important to be aware of the risks associated with OTC trading, such as counterparty risk. Overall, OTC trading contributes to the overall liquidity and efficiency of the cryptocurrency market.
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