Over-the-counter trading, often called OTC trading, is when buyers and sellers trade directly rather than through a public exchange order book.
How It Works
OTC desks help large buyers and sellers agree on price, size, and settlement. This can reduce market impact because the trade does not immediately appear as a large order on an exchange.
OTC trades are common among institutions, high-net-worth investors, miners, and funds that need to move large amounts of crypto.
Why It Matters In Crypto
OTC trading matters because large orders can move prices if placed directly on public markets. OTC desks help participants access liquidity while reducing slippage and execution risk.
A practical example: a fund buying $20 million of Bitcoin may use an OTC desk instead of placing one large market order on an exchange.