Introduction to TimeX’s OTC crypto trading service

Over-The-Counter trading is suitable for large crypto orders, where traders don’t want to move the market.

As a crypto trader, you’ll be familiar with exchanges and how the price of bitcoin and other cryptos is set by supply and demand on these open markets — including TimeX.

What you might not be aware of is how much trading activity goes on outside of exchanges.

While exchanges are vital for setting price, estimates suggest that as much as two-thirds of overall crypto trading volumes take place Over-The-Counter (OTC). These are privately-arranged trades between wealthy individuals or institutions, typically facilitated by a third party or OTC desk.

Reasons for trading OTC

There are several reasons why traders might want to avoid using exchanges. Firstly, they may be hesitant to send a large amount of funds to an unregulated organisation — or, in the case of institutional traders, regulation may actually prevent them from doing so.

Secondly, buying or selling large amounts of crypto risks moving the market. If the order books do not offer sufficient liquidity, a large order can push the price significantly up or down. This is known as ‘slippage’ and it means traders are not able to get the best price.

Thirdly, if a trader instead places a large limit order or ‘wall’ on an exchange, they telegraph their intentions to the entire market. This could mean the order is never filled. Because OTC trades take place outside of the public order books, they are far more private.

Contact us for OTC

OTC desks are growing in popularity as crypto goes mainstream and more and more large traders come into the market. Kraken, for example, saw its OTC volumes grow 2,000% in less than two years from the beginning of 2018.

TimeX offers an OTC service for trades of 25,000 AUD and upwards. If that’s something you would find useful, please contact our OTC desk by emailing otc@timex.io. We’ll be in touch to discuss your needs and will be happy to help execute your order — efficiently, securely, and privately.

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