I don’t know what the min is right now but I remember back in 2017 you didn’t need millions of bitcoins to use OTC. Many exchanges have this feature and it’s just a way to transfer an above average amount of crypto without it showing up on the order books.
There are some benefits to this compared to selling regularly on the open crypto market. For example say you got $500M worth of bitcoin to sell, if you show this ask on the order books you will spook the market and many will front run your order, if you do it OTC nobody will know besides the exchange and perhaps the other side of the transaction.
Topic: How do OTC bitcoin transactions work? (Read 133 times)
Just wondering about the mechanics of OTC (over the counter) transactions and how, or when they have an impact the price of bitcoin.
Whales and institutional investors buy BTC over the counter so as to ensure that the tx does no create any reaction at all in the market, if some of those trades were carried out in exchanges, it could have triggered people into action, probably to sell their coins due to panic and this would make the price to fall.Are spot ETF providers like Fidelity and Blackrock buying bitcoin OTC?
Probably they are, i.e. Coinbase exchange is the custodian for BlackRock's BTC, so it is possible they buy their BTC's over the counter and then move it to Coinbase to store it. But i don't think anybody can be sure where they buy it from, it could even be straight from BTC miners as well, which is still OTC trade.I'm guessing when buying OTC you are buying the bitcoin directly from the exchange instead of the usual process of being matched with other seller(s) on the exchange?
It must not be from the exchange, it could be from miners or big time investors who want to sell a large amount in BTC, the exchange can act as the OTC trading platform that matches the buyers and the sellers, but the trade happens outside of the exchange.Is there some kind of delay effect on price when someone buys bitcoin OTC?
The trade is done in private and isn't public, and people don't have to sell off their coins in panic, so OTC trade minimizes its impact on the market.What about selling OTC? How does that work?
OTC trading platforms matches buyers and sellers.
Mining companies often sell OTC and this is done exactly for that reason so the large sales don't crash the price.
When you're a large mining company there are a few things you have to keep in mind.
When you're a large mining company there are a few things you have to keep in mind.
- You have so much BTC that you have to sell it at a slow and constant pace not to crash the market, but for that you need to employ traders. And what if you don't ant to sell because of low prices and your stash bloats, like what miners were holding grew to highs in 2023 because they refused to sell in a bear market.
- You don't want to hold a lot of fiat money. When you sell you want to pay your bills and buy new hardware or build a new mining location. You're going to lose money if you hold USD for long, so you want to sell in bulk.
- You don't want to crash the prices because bitcoin crashing will also crash your stock and will lower your monthly income.
That's not at all a concern becasue regular users don't need the OTC deals, such deals are offered by and to the entities have immense capital to invest, to resolve the liquidity problems exchanges and some of the firms who already accumulated enough Bitcoin in thousands offer the OTC deals, their channel remains unknown.
Grayscale and the latest ETF firms had many OTC deals ina couple of weeks, its good for those who want to enter or exit on a large capital without liquidity issues, because on the open market they might fac liquidity issue or the price voltility.
Grayscale and the latest ETF firms had many OTC deals ina couple of weeks, its good for those who want to enter or exit on a large capital without liquidity issues, because on the open market they might fac liquidity issue or the price voltility.
Basically there are two parties involved: the one buying the bitcoin and the one actually buying it for them. Usually called brokers, they are the ones that are offered by investors to buy a specific amount of bitcoin at a specific amount of price. They could reject or accept an offer.
Bitcoin OTC is basically done so that big investors don’t alert the market as we all know when we see some big movement from the market, we immediately panic. But sometimes it’s just whales buying or selling their shares.
Bitcoin OTC is basically done so that big investors don’t alert the market as we all know when we see some big movement from the market, we immediately panic. But sometimes it’s just whales buying or selling their shares.
Just wondering about the mechanics of OTC (over the counter) transactions and how, or when they have an impact the price of bitcoin.
Are spot ETF providers like Fidelity and Blackrock buying bitcoin OTC?
Obviously, the massive spot ETFs are having a big impact on bitcoin price since they came out earlier this year.
I'm guessing when buying OTC you are buying the bitcoin directly from the exchange instead of the usual process of being matched with other seller(s) on the exchange?
Is there some kind of delay effect on price when someone buys bitcoin OTC?
What about selling OTC? How does that work?
Are spot ETF providers like Fidelity and Blackrock buying bitcoin OTC?
Obviously, the massive spot ETFs are having a big impact on bitcoin price since they came out earlier this year.
I'm guessing when buying OTC you are buying the bitcoin directly from the exchange instead of the usual process of being matched with other seller(s) on the exchange?
Is there some kind of delay effect on price when someone buys bitcoin OTC?
What about selling OTC? How does that work?
Jump to: