OTC Crypto Market: A New Age of Investments
The acronym OTC means “Over the Counter” and refers to the over-the-counter financial market, both traditional (TradFi) and decentralized finance (DeFi).
Today, Monday, I would like to expand a little more on the investment possibilities via OTC, to shed some light on this investment possibility. As always, inexperienced investors, before investing, you should consult with your trusted financial advisor before making any type of investment.
How does OTC markets move?
The OTC market works through unregulated agreements between the parties, making it a good option for individuals who are entering the trading business and do not have a sufficient amount of capital to enter the stock market.
What is the difference between stock market and over-the-counter market?
In other words, the Stock Market is the set of operations carried out on the stock exchanges. b) OVER THE STOCK MARKET. All transactions carried out outside the framework of the Stock Market make up the Over-the-Counter Market. Over-the-counter operations are not carried out on the stock market.
Who regulates OTC markets?
It must be clarified that there is not a single OTC market but there are hundreds and they are generally managed by large global investment banks or liquidity pools.
When does the OTC market close?
In the OTC markets we can find markets open 24 hours a day, as is the case of the forex market, which does not close from Monday to Friday.
OTC in crypto market
The OTC cryptocurrency market is one that is often misunderstood by many in the industry. Some believe that OTC transactions dictate the price of cryptocurrencies, while others believe that institutions simply purchase their cryptocurrencies directly from an exchange.
OTC · The truth
The truth is somewhere in the middle, while several exchanges have specific over-the-counter trading desks, it is often easier for institutional investors to deal directly with sellers through a traditional escrow service or a brokerage firm. lawyers.
Companies such as Dentons, LMAX and GTES facilitate many of the OTC transactions, which can range from 5,000 Bitcoin per transaction up to 250,000 Bitcoin.
Institutional traders often employ a mandate or broker to go out and find the right match for their needs, as a result there are hundreds, if not thousands, of “over the counter” brokers who will earn commission when a deal is closed.
The reason these institutional investors choose the OTC market instead of an exchange is to avoid slippage and get a discount. If a buyer put $200 million into Bitfinex or Binance and clicked buy on the marketplace, the price would move up, meaning the average purchase price would be much higher than if they were to buy from an over-the-counter seller.
Another incentive to buy cryptocurrency without a prescription is to get a discount. Depending on market sentiment, buyers can often earn between – 2% and – 5% discounts.
Attention to risk. Every investment has risk and depends on the product; there are products that have more risk than others. Understanding risk is the most important thing before starting any investment.
Therefore, depending on the cases, possible additional profits can be generated.
So it will be necessary to balance and know the risk versus benefit relationship.
At BELOBABA we are also working to offer OTC services for crypto, among other investment possibilities, directly or in agreements with third parties.
What is a VASP license?
The acronym VASP stands for Virtual Asset Service Provider, and a VASP license is a permit granted by regulatory authorities to offer cryptocurrency exchange and trading services.
BELOBABA has obtained the VASP license so it is authorized to offer this type of services with other expanded ones, which will gradually reach our portfolio of products to offer.
The world is changing and these types of investment possibilities are becoming closer every day, first to qualified clients, but in the future, I understand that they will be more open to the general public, once said public understands how it works and what can be done to invest in it.
I repeat: Without investment knowledge about it, you should consult with your trusted financial advisor.
As always, best regards.