Over-the-Counter (OTC)

Over-the-Counter (OTC) trading refers to the process of buying and selling assets directly between two parties, without the use of a centralized exchange. OTC trading is often used for large transactions, where making trades on a public exchange could significantly impact the market price due to low liquidity. In the cryptocurrency world, OTC desks are used by institutional investors and high-net-worth individuals to execute large trades discreetly and without causing slippage. OTC services can be provided by brokers or specialized trading desks. Example: A crypto whale might use an OTC desk to purchase 1,000 Bitcoin in a single transaction rather than breaking it into smaller trades on an exchange.