The difference between on-exchange trading and over-the-counter trading in currency circles

Cryptocurrency market trading is divided into on-exchange trading and over-the-counter trading. On-exchange transactions are conducted on centralized exchanges, where the exchange matches orders and provides liquidity, and transaction fees are low; OTC transactions are conducted on unregulated platforms or peer-to-peer, and both parties directly negotiate prices and terms, with transaction fees Higher, usually involving large sums of money.

The difference between on-exchange trading and over-the-counter trading in currency circles

In the cryptocurrency market, trading is mainly divided into two forms: on-exchange trading and over-the-counter trading.

Exchange Trading

• Trade on centralized cryptocurrency exchanges.
• Trades are matched by exchanges and provide liquidity.
• The transaction price is affected by market supply and demand.
• Provides an order book showing the bid and ask prices of buyers and sellers.
• Trading fees are usually lower than OTC trading.

Over-the-Counter (OTC)

• Trade on unregulated platforms or directly between buyers and sellers.
• The parties to the transaction directly negotiate the price and transaction terms.
• Transactions usually involve large amounts of money.
• Transaction fees are higher than on-exchange trading.

Key Differences

Features	On-exchange trading	OTC trading
Trading venues	Centralized exchanges	No regulated platform or peer-to-peer
Liquidity	Provided by exchanges	Lower
Price discovery	Affected by market supply and demand	Negotiated by buyers and sellers
Order book	Order book provided	No order book
Trading fees	Usually lower	Higher
Regulated	Regulated	Unregulated
Trading size	Usually smaller	Usually larger
Trading method	Order matching	Negotiate directly

The above is the detailed content of The difference between on-exchange trading and over-the-counter trading in currency circles. For more information, please follow other related articles on the PHP Chinese website!