What are the risks of OTC bitcoin trading?

1 answers

• Dec 24, 2021 · 3 years ago
  When it comes to OTC bitcoin trading, one of the risks that traders should be aware of is the potential for price slippage. OTC trades are often executed at a negotiated price, which means that the actual execution price may differ from the price agreed upon. This can result in traders paying more or receiving less than they anticipated. Another risk is the lack of regulatory oversight. OTC trading is not subject to the same level of regulation as trading on traditional exchanges, which means that traders may have less protection in the event of fraud or misconduct. Additionally, OTC trading can be more susceptible to market manipulation. Since OTC trades are conducted privately, it can be easier for large traders to manipulate the price of bitcoin by executing large trades. This can create an unfair trading environment for smaller traders. In summary, while OTC trading can offer certain advantages, it is important for traders to be aware of the potential risks and take appropriate measures to mitigate them.
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