Major Crypto Exchanges
The OTC market is a growing alternative to traditional exchanges for trading cryptocurrencies. Its daily volumes exceed those of major exchanges, according to TABB Group and Digital Assets Research. In April 2018, it facilitated between $250 million and $30 billion in trades. By contrast, the largest US exchanges handled less than $15 billion in daily trades. However, the OTC market is a smaller venue with lower fees and greater volume than conventional exchanges.
Decentralized OTC crypto exchange
The main problem with cryptocurrency exchanges is the lack of liquidity. It is impossible to trade large amounts in these markets without experiencing price slippage. Large orders on centralized exchange order books are unlikely to be immediately filled and may even break up into smaller orders with varying prices. This is called price slippage. Because of the lack of liquidity on the exchanges, many large traders and investors have turned to OTC desks for their cryptocurrency trading needs. Coinbase, Bitmain, Circle, Fidelity, and Antpool all offer major desks for their clients.
While the OTC market is more expensive, it’s still the best option for many investors. The liquidity on the OTC market is readily available and transparent. Its price is more affordable and offers greater liquidity than conventional trading venues. And it’s much faster than traditional trading, which means that investors can lock in prices faster. But be aware that OTC markets can be very risky. You should always be cautious and be patient. Moreover, they require a high level of discipline.
OTC Markets – A Growing Alternative to the Major Crypto Exchanges
Retail cryptocurrency exchanges face limited liquidity. Currently, there are roughly seven billion dollars of total daily trade volume on CoinMarketCap. The majority of this volume is in the form of Bitcoin and ethereum. This limited volume is a challenge, as these currencies are not backed by physical properties. Because of the high risks involved, the retail market is a low-risk option for investing in cryptocurrencies. This means that only experienced investors should use OTC.
As the OTC market continues to grow, the number of participants is expected to grow exponentially. The amount of daily trade volume on the OTC market reaches an estimated US$15 billion each day, and that number is expected to rise further in the coming years. TABB Group and Kraken report that OTC trading is now three times as large as the open exchange market. While these figures vary, they reflect the rapid growth in cryptocurrency use over the past two years.
While traditional OTC markets dominate the world’s stock markets, they are also an important part of the crypto ecosystem. These exchanges compete for institutional money in the crypto space. As a result, they often feature higher liquidity than traditional exchanges. For example, the average daily trade volume on OTC platforms was $72 billion in April 2018. While these figures differ, it shows that institutional investors are becoming increasingly comfortable with digital currency.