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The more and more people come to cryptocurrency and Blockchain, the more exchanges will rise. Those need a steady inflow of fiat money, and most accept only famous cryptocurrencies (BTC, ETH) or USDT (Tether). How can someone without BTC get his hands on some? A solution is an OTC crypto desk.
Oligarchs, companies, and funds face the same problem. Many have a stock of cryptocurrencies they would like to sell, but they can’t find enough buyers on exchanges – there is too much volatility and a lot of risk involved. An OTC crypto desk is an alternative option for such people. OTC Crypto Desks are great for people who also like to do Crypto OTC Trading.
In this article we will give you the OTC desk crypto meaning:
What are OTC crypto desks?
Put simply, OTC crypto desks are online services that let you trade cryptocurrency for fiat currency. As the name suggests, these services are operating on an over-the-counter (OTC) basis. This means that they will work with traders of all sizes and bankrolls.
OTC crypto desks are usually run by trading institutions. They buy or sell large amounts of cryptocurrency without the need to have done so on an exchange, thus avoiding slippage. These institutions will meet with their counterparties in places where they can do business “face to face” in order to avoid being monitored by third parties.
Sometimes, these counterparties will not be on the same continent. This forces the institutions to search for help with transferring large amounts of value. A service that can offer them just that is a cryptocurrency broker .
Is OTC crypto desk safe?
OTC crypto desks are considerably more secure than exchanges, which have had their fair share of problems. The only threat to the trader is the bank itself and possible setbacks in fiat currency value fluctuations.
There is no risk for your funds: you transfer them to a trusted broker and let him hold them until it’s time to withdraw. This also has an advantage for tax purposes, as gains made from cryptocurrency trading are not subject to VAT.
How do OTC crypto desks work?
Using an OTC crypto desk is actually very straightforward. First, you’re going to have to sign up for the service, then provide it with some personal information, upload proof of ID and wait to be approved. Then you place your order, which varies depending on what kind of crypto trading you’re interested in.
When conducting an OTC trade with a big investor, the procedures might be even more convoluted because of large amounts of paperwork and mandatory KYC/AML checks. Once the deal is done, your fiat money will be transferred to a bank account, or another trusted payment processor. You can choose how you want to receive your cryptocurrencies.
There are some OTC crypto desks that will let you simply buy cryptocurrency with fiat, no questions asked.
A growing number of brokers offering digital asset options for larger orders also exist. These exchanges offer an alternative to regular trading venues, which can be problematic when it comes to buying large amounts of cryptocurrency due to high volatility and liquidity issues.
An OTC crypto desk can fix that – you simply place your order, and you receive your desired amount of coins within minutes after the payment is accepted.
OTC crypto desks are becoming more popular every day. Nowadays, it’s nearly impossible to conduct a successful trade without one because of high volatility in most cryptocurrencies. A broker will let you enter the market with no fear of losing money.
Choosing the right OTC desk
All OTC crypto desks are not created equal. There are big and small trading institutions out there, and their rates vary – it’s up to you to choose the one that suits your needs best.
Another factor to consider is the verification procedure: while some services might be satisfied with an ID or proof of address, others will demand a comprehensive KYC process.
Some people decide to go for Crypto OTC trading in order to preserve their privacy or avoid exchange fees. This might be an option, but not the best one. Check with the OTC desk of your choice whether they charge for this service (and how much). Most of them will take a portion of the transaction.
Another thing to ask yourself is what kind of cryptocurrency you’re looking for – do you want regular coins, ERC20 tokens or something else? Some brokers offer more than one option.
It’s also crucial to check out the reputation of an OTC desk before trying it out for the first time – do they have a good track record of completed deals, and are there any complaints about them on the Internet? You can answer all these questions by simply looking at reviews or searching for their name on Facebook.
Conclusion
The bottom line is that if you want to invest in OTC crypto desks, you need to be ready for some legwork. Expect to sign up for an account, provide the necessary documentation and put a lot of effort into establishing trust with your broker. Still, once you find a reputable dealer, it’s highly unlikely that you’ll ever regret trying out OTC crypto desks.