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What is the difference between OTC trading and exchange trading for bitcoin?

CLRBLND_99Sep 24, 2023 · 2 years ago3 answers

Can you explain the key differences between over-the-counter (OTC) trading and exchange trading for bitcoin? How do these two methods of trading differ in terms of liquidity, pricing, security, and accessibility?

Bitcoin
Cryptocurrency
OTC Trading

3 answers

  • cmxDec 02, 2022 · 3 years ago
    OTC trading and exchange trading are two different ways to buy and sell bitcoin. OTC trading refers to transactions that occur directly between two parties, without the involvement of an exchange. This type of trading is often used for large transactions and offers more privacy. On the other hand, exchange trading takes place on a cryptocurrency exchange platform, where buyers and sellers trade bitcoin using the exchange's order book. This method provides more liquidity and transparency compared to OTC trading.
  • santi0kFeb 07, 2024 · a year ago
    When it comes to liquidity, exchange trading generally offers higher liquidity than OTC trading. This is because exchanges have a larger pool of buyers and sellers, allowing for faster and easier execution of trades. OTC trading, on the other hand, may have lower liquidity as it relies on finding a counterparty willing to trade at a specific price.
  • Karen CelebradoJun 02, 2022 · 3 years ago
    At BYDFi, we believe that both OTC trading and exchange trading have their own advantages. OTC trading provides more privacy and is suitable for large transactions, while exchange trading offers better liquidity and transparency. It's important to consider your specific needs and preferences when choosing between the two methods.

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