Over-the-counter (OTC)
Trades conducted directly between parties rather than through a public order-book exchange.
Over-the-counter trading involves direct negotiation and settlement between counterparties. It’s common for large trades that would move the market if executed on an exchange.
"A fund buys a large BCH position via OTC to avoid slippage on public exchanges."
OTC can reduce price impact but introduces counterparty, settlement, and custody risk. Reputable desks use escrow, KYC/AML, and post-trade reporting.
"An OTC desk escrows seller coins and buyer funds before releasing to both sides upon confirmation."
Related Terms
Cryptocurrency Exchange
→A platform that facilitates the buying, selling, and trading of cryptocurrencies. Exchanges can support crypto-to-crypto or crypto-to-fiat transactions and serve as crucial infrastructure in the digital asset ecosystem.
Liquidity
→The ease with which a crypto asset can be bought or sold without affecting the market price.
Market maker
→A market maker quotes buy and sell prices to provide liquidity, earning the spread and/or incentives.
All terms and definitions may update as the Cryptionary improves.
