OTC Trading
Over-the-counter crypto trading — directly between parties, without market impact.
OTC (Over-the-Counter) trading is the direct purchase/sale of cryptocurrency between two parties — without going through the standard order book on an exchange.
Why OTC:
•Large orders would "move the market" if passed through order book
•If you buy 500 BTC on Binance, price would jump during execution
•OTC: fixed price for entire order
Who uses OTC:
•Hedge funds and institutions
•High net worth individuals
•Mining companies selling BTC rewards
•Corporations buying BTC for treasury
OTC desks:
•Binance OTC — direct contact with sales team
•Genesis OTC (bankrupt 2023)
•Cumberland (DRW subsidiary) — leading
•GSR Markets
•Coinbase Prime — institutional grade
How it works:
•Client contacts OTC desk
•OTC desk gives quote (immediate price)
•Client accepts or negotiates
•Settlement: T+0, T+1, or T+2
OTC vs spot exchange:
•Exchange: transparent price, but market impact for large orders
•OTC: private, fixed price, no market impact
•OTC doesn't appear in public order book
Rules:
•Minimum amounts typically $50k-$250k+
•KYC/AML mandatory for all OTC desks