What does OTC stand for in the currency circle?

Cryptocurrency OTC refers to over-the-counter trading, which refers to the market for cryptocurrency transactions outside of exchanges. Its characteristics include privacy, flexible transaction volume, customized services and high transaction costs. Its transaction process generally includes finding counterparties, negotiating terms, signing contracts, and transferring funds and assets. Its advantages are privacy, large-amount transactions, and customized services; its disadvantages are higher transaction costs, fraud risks, and low liquidity.

What does OTC stand for?

Definition:

Over-the-counter (OTC) refers to cryptocurrency trading that occurs outside of exchanges. In the currency circle, OTC is the abbreviation of over-the-counter market, which is another channel for buying and selling cryptocurrency.

Features of OTC:

• Privacy: Trading is usually conducted privately and is not disclosed on the exchange’s order book.
• Flexible trading volume: OTC can handle large transactions without restrictions from exchanges.
• Customized services: Traders can customize trading terms, such as price, settlement method, etc. according to customer needs.
• Higher Transaction Costs: Due to the advantages of privacy and flexibility, the cost of OTC trading is usually higher than that of exchange trading.

OTC trading process:

OTC trading usually follows the following steps:

1. Finding counterparties: Buyers and sellers find counterparties through private contact or introduction by brokers.
2. Negotiation terms: Both parties negotiate terms such as transaction price, quantity, settlement method and delivery time.
3. Sign a contract: Some OTC exchanges will sign a contract to ensure that the terms of the transaction are adhered to.
4. Funds and Asset Transfers: Buyers transfer funds to sellers, and sellers transfer cryptocurrencies to buyers.

Advantages of OTC:

• Privacy: Trading is not public on the exchange, avoiding market manipulation and price fluctuations.
• Large Transactions: OTC can handle large cryptocurrency transactions that are difficult for traditional exchanges to handle.
• Customized services: Traders can customize trading terms according to customer needs to meet special requirements.

Disadvantages of OTC:

• Higher Transaction Costs: The cost of OTC trading is usually higher than exchange trading.
• Fraud Risk: The private nature of OTC transactions increases the risk of fraud, and both buyers and sellers should exercise caution.
• LOWER LIQUIDITY: The OTC market is less liquid, which means it may take longer to execute trades.

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